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Wall Street shakes off inflation rise and closes higher

EconomyMay 28, 2021 06:40PM ET
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© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks climbed on Friday as investors brushed off a stronger-than-expected inflation reading, as both the Dow and S&P 500 indexes clinched their first weekly gain in the past three weeks.

Consumer prices, as measured by the personal consumption expenditures (PCE) price index excluding the volatile food and energy components, rose 0.7% in April, topping analysts' 0.6% estimate and after a 0.4% increase in March. PCE is the Federal Reserve's preferred measure of inflation.

In the 12 months through April, the core PCE price index surged 3.1%, smashing through the Fed's 2% target, as the reopening economy unleashed pent-up demand.

Investors have been closely watching economic data and comments from Fed officials for signs of runaway inflation and the possibility the central bank may begin to pull back on its massive stimulus measures.

"The data is going to remain volatile as well, the inflation data that we saw this morning with core PCE was a high print, but really not that far ahead of consensus," said Keith Buchanan, senior portfolio manager at Globalt in Atlanta.

"Base effects definitely play a role, distorting the takeaways from some very large year-over-year type of numbers," he added.

The Dow Jones Industrial Average rose 64.81 points, or 0.19%, to 34,529.45, the S&P 500 gained 3.23 points, or 0.08%, at 4,204.11 and the Nasdaq Composite added 12.46 points, or 0.09%, at 13,748.74.

Graphic: U.S. inflation heats up, https://graphics.reuters.com/USA-ECONOMY/INFLATION/xlbvgkrdxvq/chart_eikon.jpg

For the week, the S&P rose 1.17%, the Dow gained 0.94% and the Nasdaq advanced 2.06%. For the month, the S&P climbed 0.55%, the Dow added 1.94% and the Nasdaq lost 1.53%.

Fed officials have repeatedly maintained in recent days that the central bank is not ready to adjust its monetary support, although some have suggested they are open to begin discussing scaling back its bond-buying plan. On Thursday, Federal Reserve Bank of Dallas President Robert Kaplan said the labor market was tighter than many realize.

Despite the data showing a rise in inflation, U.S. Treasury yields fell and helped lift high-growth technology stocks. Salesforce.com Inc (NYSE:CRM) climbed 5.43% after raising its full-year revenue and profit forecasts, helped by increased demand for its cloud-based software during the pandemic.

Inflation concerns have persisted for several weeks and weighed on growth names, many of which reside in the tech-heavy Nasdaq, and the index posted its first monthly decline since October.

Volatility has risen even as the S&P 500 has rebounded to less than 1% below its May 7 record high, and the index saw its smallest monthly gain in the past four in May.

The U.S. stock market will be closed on Monday for the Memorial Day holiday. Analysts cautioned against drawing strong conclusions from Friday's lightly traded market.

Volume on U.S. exchanges was 10.32 billion shares, compared with the 10.52 billion average for the full session over the last 20 trading days.

Boeing (NYSE:BA) Co fell 1.47% after the Federal Aviation Administration confirmed the planemaker halted deliveries of its 787 Dreamliners, adding fresh delays for customers following a recent five-month delivery suspension due to production problems.

Advancing issues outnumbered decliners on the NYSE by a 1.63-to-1 ratio; on Nasdaq, a 1.12-to-1 ratio favored advancers.

The S&P 500 posted 31 new 52-week highs and one new low; the Nasdaq Composite recorded 108 new highs and 23 new lows.

Wall Street shakes off inflation rise and closes higher
 

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Comments (10)
Investing Man
Investing Man May 28, 2021 12:54PM ET
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Whats more sad today are the republicans who sabotaged investigation into why their people attacked the capital
TR Ko
TR Ko May 28, 2021 12:54PM ET
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What is really sad are Democrats that have pushed many false stories like insurrection, russia, etc etc etc all while ignoring covid and starting wars and aiding our enemies.
Jouni Matero
Jouni Matero May 28, 2021 12:54PM ET
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I think it was Mr T who said Covid won't come to US and when it did, he said Covid is just another flu and nobody should be worried and it'll be over in week or so. So who's ignoring Covid and who's not, dunno.
Terry Dude
Terry Dude May 28, 2021 12:54PM ET
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scamdemic "Quantitative scientist John Ioannidis, professor of medicine at the Stanford Prevention Research Center, calculated the IFR for COVID-19 in a review of 61 seroprevalence studies, which was a median of 0.23%, and 0.05% in people younger than 70.6"
Henry Anderson
Henry Anderson May 28, 2021 12:47PM ET
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Bitcoin uses Secure Hashing Algorithm (SHA) -256, a variant of the SHA-2 (Secure Hash Algorithm 2), developed by the National Security Agency (NSA). "It seemed doubtful that Nakamoto was even Japanese. His English had the flawless, idiomatic ring of a native speaker," "It was suggested, Nakamoto wasn't one man but a mysterious group with an inscrutable purpose.(Wired.com)" It's certainly no coincidence that Bitcoin was created on January 2009, following 2008 economic crisis. It's very plausible that NSA or (at least a group from NSA) created Bitcoin to maintain the reserve currency status of the US Dollar and prevent any future debt crisis.
Henry Anderson
Henry Anderson May 28, 2021 12:47PM ET
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Also, the United States and Tesla (Elon Musk) are indirectly promoting Bitcoin. Elon gets away with obvious pump-and-dump schemes involving TV Shows and Twitter while the SEC forced Michael Burry to delete his Twitter account. Joe Biden talks all day about green energy, but the American government doesn't even try to regulate or ban cryptocurrencies despite their environmental concerns. In other words, Elon Musk and the American Government seem to be cooperating to promote Bitcoin to prevent the Fall of the US dollar. They are advocating Bitcoin because rising Gold, Euro, and Pound will threaten the reserve currency status of the US Dollar. (Most of Bitcoin is traded in USD, whereas Dollar recently lost to Euro as Payment Currency-SWIFT) Strangely, Elon is the Richest Man in the world, although all of his companies are not profitable. He could not have done it without the help of the American government.
Harpoonn Singh
Harpoonn Singh May 28, 2021 12:14PM ET
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Inflation is priced into the market!
Jouni Matero
Jouni Matero May 28, 2021 12:14PM ET
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Looks like analysts want to pump more it into prices.
Beavis Bombay
Beavis Bombay May 28, 2021 11:59AM ET
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today expect a negative close
sal galeano
sal galeano May 28, 2021 11:58AM ET
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inflation doesn't exist.
Frederick Chotsky
Chotsky May 28, 2021 11:18AM ET
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From now on every headline should be, "Wall Street advances (substitute declines) because 'reasons'"
Jouni Matero
Jouni Matero May 28, 2021 11:18AM ET
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Indeed, all bad news are ignored and twisted to good news and good news are twisted to excellent news.
noob investor
noob investor May 28, 2021 11:07AM ET
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f u
Junk Man
Junk_Man May 28, 2021 10:12AM ET
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It's either because of or it's due to being unshaken.... It can always be spun into a reason why.
Ominous Owl
Ominous Owl May 28, 2021 10:10AM ET
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Wow, like we even need some reason to go up anyway?
Mark Brovchuk
Mark Brovchuk May 28, 2021 9:51AM ET
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why do you even write this?
Rik Raq
Rik Raq May 28, 2021 9:51AM ET
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why do you even read it?
 
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