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S&P 500 closes at all-time high as long-term inflation jitters fade

EconomyJun 10, 2021 09:11PM ET
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2/2 © Reuters. FILE PHOTO: Morning sunlight falls on the facade of the New York Stock Exchange (NYSE) building after the start of Thursday's trading session in Manhattan in New York City, New York, U.S., January 28, 2021. REUTERS/Mike Segar/File Photo 2/2

By Stephen Culp

(Reuters) - Wall Street stocks ended higher on Thursday, with the S&P 500 closing above its prior record high set on May 7, as economic data appeared to support the Federal Reserve's assertion that the current wave of heightened inflation will be temporary.

All three major U.S. stock indexes advanced, with market-leading megacap stocks putting the Nasdaq out front. But economically sensitive transports and smallcaps ended the session in negative territory.

The Labor Department's consumer price index (CPI) data came in above consensus and added fodder to the debate over whether current price spikes could transform into long-term inflation, despite the Fed's assurances to the contrary.

But a closer look showed that much of the price surge came from items such as commodities and airfares, and is therefore likely to be temporary.

"Earlier this week we had extremely boring market days as we all had our eyes on the bullseye of this CPI report," said Ryan Detrick, senior market strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina. "But once people looked under the surface, the majority of the higher inflation is due to the reopening, and stocks had a relief rally."

"The market is taking it in stride as it realizes the whole economy isn't overheating," Detrick added.

A U.S. House of Representatives committee passed a $547 billion infrastructure spending bill targeting surface transportation, adopting some of President Joe Biden's proposals as part of his broader $2.3 trillion infrastructure package.

Still, sectors that stand to benefit from infrastructure spending ended the session lower. Industrials and transports fell by 0.5% and 0.7%, respectively.

The Dow Jones Industrial Average rose 19.1 points, or 0.06%, to 34,466.24; the S&P 500 gained 19.63 points, or 0.47%, at 4,239.18; and the Nasdaq Composite added 108.58 points, or 0.78%, at 14,020.33.

Among the 11 major sectors of the S&P 500, healthcare enjoyed the largest percentage gains.

But interest rate-sensitive financials fell the most, dropping 1.1% as easing U.S. Treasury yields weighed on the sector.

GameStop Corp (NYSE:GME), the stock most closely associated with the social media-driven "meme stock" phenomenon, dropped 27.2% after the videogame retailer said it may sell new shares.

Other stocks that have benefited from the retail short-squeeze rally, including Clover Health Investments Corp, AMC Entertainment (NYSE:AMC) Holdings, Bed Bath & Beyond Inc (NASDAQ:BBBY) and GEO Group, also slid, losing between 8% and 19%.

Pfizer Inc (NYSE:PFE) advanced 2.2% on news that the United States would pay the drugmaker about $3.5 billion for 500 million COVID-19 vaccine doses that it intends to donate to the 100 lowest income countries.

Advancing issues outnumbered decliners on the NYSE by a 1.25-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.

The S&P 500 posted 58 new 52-week highs and no new lows; the Nasdaq Composite recorded 102 new highs and 14 new lows.

Volume on U.S. exchanges was 10.64 billion shares, compared with the 10.67 billion average over the last 20 trading days.

S&P 500 closes at all-time high as long-term inflation jitters fade
 

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Comments (35)
perplexed76 .
perplexed76 . Jun 10, 2021 11:21PM ET
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i cant but admire market gamblers "creativity" to intepret any data in their way
Sean Livingstone
Sean Livingstone Jun 10, 2021 10:29PM ET
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Honestly, I bought the calls for that gap up and sold my calls near the top. I short the market down, and then close my puts. If you ask me why the market is going up... this market is just stealing money from the poor and give them to the rich. Retails were told that inflation is bad, and should sell their shares, the rich was standing aside stealing the shares. Once the rich tells retails that it's good to buy shares, then they will sell you their shares. That is life... oh, if they did badly, our government will bail them out. They won't even be bothered to investigate them. They will simply investigate you, yeah, you, that retail... for talking too much on Reddit.
peter neal
peter neal Jun 10, 2021 7:52PM ET
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Whopper with cheese and a Chocolate Shake $ 12.58. Person behind the Counter makes $ 16.00 to start. New Pickups $70k. S&P 500 record high. Where's the inflation. I bought three 2x4 $8.50 for one.
peter neal
peter neal Jun 10, 2021 7:52PM ET
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Steak sauce $5.58. I didn't buy it.
NUNO LOUREIRO
NUNO LOUREIRO Jun 10, 2021 4:56PM ET
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Today excuse "don't fight the FED".. Next week if the FED hints tapering, we will see another ATH, and the excuse will be, tapering is good because it means the economy is strong. What a wonderful magical world the stock market
zhantao li
zhantao li Jun 10, 2021 4:56PM ET
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definitely agree with that but seems not very likely
Dave Jones
Dave Jones Jun 10, 2021 3:52PM ET
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LMAO!
Jokers R Us
Jokers R Us Jun 10, 2021 3:10PM ET
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They were going to write this article no matter what the inflation numbers were
Jouni Matero
Jouni Matero Jun 10, 2021 3:09PM ET
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This is the most hilarious title of the year do far "Inflation seems to be temporary". Ummm... Let's see, it's just about to start so you guys are some kind of Nostradamus' and know it's only temporary. Sure it is, if you're talking about years of scale. Hilarious!
Stuart McQ
Stuart McQ Jun 10, 2021 2:54PM ET
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A commodity bull cycle can last decades. Everything in investing is temporary, if you are talking in terms of decades!
Yanna Lisitsina
Yanna Lisitsina Jun 10, 2021 2:41PM ET
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Oh you guys 🤦🏼‍♀️ the inflation is Temporary like duhhh... 🤷🏼‍♀️
Yanna Lisitsina
Yanna Lisitsina Jun 10, 2021 2:41PM ET
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what a joke
WILLIAM HAGERTY
WILLIAM HAGERTY Jun 10, 2021 2:35PM ET
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"seems"
John Klan
John Klan Jun 10, 2021 1:51PM ET
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They'll call it transient inflation up into the 2022 elections then when Dims lose the House and Senate They'll blame Republicans for the mess.
Paul Har
Paul Har Jun 10, 2021 1:43PM ET
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During lock down fewer goods were being produced, now the economy is reopening, there are many people with more money chasing fewer goods - thats inflationary. Manufacturing will eventually meet demand and inflation will stablize. Inflation is only a problem if it keeps on rising/falling
SHORT GOLD
SHORT GOLD Jun 10, 2021 1:43PM ET
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You forgot the $7 trillion the Fed printed.... Canada increased it's M0 money supply from $100B to $500B alone LOL
Steve Lora
Steve Lora Jun 10, 2021 1:40PM ET
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Tomorrow Reuters say , "Inflation Jitters " These activists/journalists have limited vocabulary
RAMAKRISHNA RAO VENGALA
RAMAKRISHNA RAO VENGALA Jun 10, 2021 12:41PM ET
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It's simply the Miracle of the Lord Vishnu. Dow and Nasdaq are up today.
Milan Sawicki
Milan Sawicki Jun 10, 2021 12:34PM ET
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Last month you wrote about inflation fears, today we've got reading with inflation 5% YoY and we top near ATH. That's ridiculous
Simon Manning
Simon Manning Jun 10, 2021 12:28PM ET
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Tomorrow's headline: Market sees worst drop of 2021 due to inflation fears.
Mark Stallone
Mark Stallone Jun 10, 2021 12:26PM ET
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Inflation is a conspiracy theory.. Just like the Chi-Vi coming from a lab. Oh wait.
Rajeev Sharma
Rajeev Sharma Jun 10, 2021 12:01PM ET
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What a mockery
Todd Gray
Todd Gray Jun 10, 2021 11:59AM ET
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Yellen has been yapping about raising rates. Rates must be normalized to achieve economic health. Now would be a good time to do it. We'll see.
Jokers R Us
Jokers R Us Jun 10, 2021 11:59AM ET
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They will never raise
Mox Mox
Mox Mox Jun 10, 2021 11:59AM ET
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yellen is just helping Powell by creating some fake "fight of thoughts" in reality they all want the rates to remain lo for ever
Mitchel Pioneer
Mitchel Pioneer Jun 10, 2021 11:54AM ET
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Another miraculous reversal of a loss the day after it occurs.  Days and days of "gains," and single session losses.  Only in the US Ponzi Scheme, greatest financial fraud in history, and biggest investment joke in the world.
Pratt Man
Pratt Man Jun 10, 2021 10:54AM ET
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We're almost to the end of a sideways correction. Rising consumer prices will help profits in the next two quarters.
Show previous replies (3)
Todd Gray
Todd Gray Jun 10, 2021 10:54AM ET
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minimum corporate tax will eat more than any inflationary profits & and I think people are going to be thrifty for a while. especially after the stimulus & supplemental unemployment dry up.
Nick Leeds
Nick Leeds Jun 10, 2021 10:54AM ET
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Where are people going to be thrifty and when since say 1994 have they been??Demand is booming, this inflation is due to demand not cost push like it was in the 1970s
Nick Leeds
Nick Leeds Jun 10, 2021 10:54AM ET
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Higher prices doesn't mean less consuming either. Cars and homes sell within hours of becoming available. Car rental rates are at least $132 PER DAY thru the end of the month
Nick Leeds
Nick Leeds Jun 10, 2021 10:54AM ET
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Taxes rates were cut in the 2017 tax cut act, wishful thinking that they will go back to even 25%
Todd Gray
Todd Gray Jun 10, 2021 10:54AM ET
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it's more likely most, or more than, any increase in retail prices will be more than offset by increased raw costs, increased shipping costs, and slightly higher wages. at least for the short & early mid term.
Leo Philip
Leo Philip Jun 10, 2021 10:36AM ET
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Markets upward momentum looks like heading towards "All fall down". Bullish Intraday transaction till then. No positional buy henceforth.
Kaveh Sun
Kaveh Sun Jun 10, 2021 10:23AM ET
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I Dont give a # if the market is up or down. I have positions on both sides. I’m more on the long side. My up is capped, but my down is capped too.
tim banks
tim banks Jun 10, 2021 10:17AM ET
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Before hitting the panic button, investors should recognise that used cars, auto insurance, and airfares drove nearly half of the core CPI increase.These increases are all easily explained by depressed prices a year ago and the semiconductor shortage that has turbocharged used car prices. 
tim banks
tim banks Jun 10, 2021 10:17AM ET
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CPI - including used vehicles (+7.3% m/m), car rentals (+12.1%), airfares (+7.0%) and, to a lesser extent, hotel room rates (+0.4%).But other costs rose too -- including the cost of dining out (up 0.6% month-on-month, and 4% higher than a year ago).
Larry DeAngelis
Larry DeAngelis Jun 10, 2021 10:17AM ET
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The only thing " transitory" is the reopening
John Whitfield
John Whitfield Jun 10, 2021 10:17AM ET
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dont forget the ransoms on the pipeline and meat these also played a part in the inflation....kinda funny makes you wonder who benefits the most from that in the market.....idk top donor to the current admin, holds largest shorts in the market...oh wait..it was russia again.
Manic Marco
Manic Marco Jun 10, 2021 10:17AM ET
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"turbocharged used car prices." good pun, hahahaha
 
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