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U.S. stocks end higher in 'buy the dip' session

Published 05/13/2021, 07:08 AM
Updated 05/13/2021, 09:31 PM
© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

By Stephen Culp

NEW YORK (Reuters) - Wall Street ended sharply higher at the close of a broad rally on Thursday, bouncing back from three straight days of selling on upbeat labor market data.

All three major U.S. stock indexes notched solid gains, with the S&P 500 enjoying its biggest percentage gain in over a month. The Nasdaq, weighed by Tesla (NASDAQ:TSLA) Inc, picked up the rear.

Meanwhile, cyclical shares, which stand to benefit most from economic revival, enjoyed the biggest gains.

Recent economic data has prompted inflation fears as scarcity of both materials and workers threatens to send prices surging in the face of a demand boom.

"If this is a footrace, supply chains are still tying their shoes," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "But they will catch up with demand fairly quickly."

But on Thursday, investors appeared to be focusing on the glass-half-full side of the demand/supply equation.

This was evidenced by the outperformance of small caps, chips and transports, economically sensitive stocks that stand to gain as the United States emerges from the pandemic recession.

"Sectors and stocks that were hurt most significantly by yesterday's sell-off rebounded strongly today given that economic growth is expected to remain strong throughout the year and any inflation is likely to be temporary," Carter added.

New applications for unemployment insurance continue to fall, according to jobless claims data from the Labor Department that hit a 14-month low.

Labor Department data also showed producer prices surged last month, building on the inflation surge narrative of Wednesday's consumer prices report.

"The inflation boogeyman is back right on cue," Carter said. "And will continue to spook markets for the coming months."

But rising prices were widely anticipated, and the U.S. Federal Reserve has provided repeated assurances that it does not foresee those spikes morphing into sustained, long-term inflation.

The Dow Jones Industrial Average rose 433.79 points, or 1.29%, to 34,021.45, the S&P 500 gained 49.46 points, or 1.22%, to 4,112.5 and the Nasdaq Composite added 93.31 points, or 0.72%, to 13,124.99.

Of the 11 major sectors in the S&P 500, 10 ended green, with industrials enjoying the largest percentage gain.

Energy, weighed by a drop in crude prices, was the sole loser, shedding 1.4%. [O/R]

Walt Disney (NYSE:DIS) Co shares were down nearly 5% in after-hours trading after posting quarterly results.

Dating app owner Bumble Inc tumbled 14.3%, falling below its initial public offering price, as investors remained cautious about how quickly users will return to in-person meetings.

Boeing (NYSE:BA) Co rose 0.8% after gaining approval from U.S. regulators for a fix of an electrical grounding issue.

Tesla continued its slide, dropping 3.1%, the heaviest drag on the Nasdaq, after boss Elon Musk doubled down on his sudden rejection of cryptocurrency bitcoin.

Advancing issues outnumbered declining ones on the NYSE by a 1.91-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored advancers.

© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

The S&P 500 posted 13 new 52-week highs and no new lows; the Nasdaq Composite recorded 49 new highs and 201 new lows.

Volume on U.S. exchanges was 11.50 billion shares, compared with the 10.53 billion average over the last 20 trading days.

Latest comments

OK
Fed reassures no worries about inflation nor future dollar devaluation. Stimulus money will help pay for rising prices. Eventual collaspe of US monetarry system no matter what the Fed does will ot matter either. Keep buying until we all of us are starving and violence increses like it never has been before anywhere. Our future is bliss.
where's the April margin debt reporting? oh, I guess it doesn't matter if the market has a Trillion in borrowed money floating around. no risk there! lol
these headlines are the best comedy in the world
more lies from the MSM and corrupt politicians
up beat jobs data? I think were below the 08 jobs low. and, below the 1929 crash low. with a much longer projected timeline to full employment. it's an amazing fraud; how much factual data the media leaves out of every single story they pitch. there isn't enough money on earth, for me to lie like that to the world.like always, the media narrative will suddenly turn to the dark side of the facts, and a lot of better people than they, will be unprepared and hurt, because the media really only cares about itself. pretty soon, buying the dip will precede no more buyers. in this country, the way it is today, we could have a hyper crash.
more lies from the corrupt Media on the corrupt scam market.
have you even graduated high schools ? This is one of the worst jobless claims.
Hyperinflation and good jobs report, what possible negative consequence could this have in a market that is moved solely based on actions of the Fed with interest rates?
Last week: Wallstreet up on bad jobs report due to Fed rate fears. This week: Wallstreet up on good jobs report after highest inflation data in decades ignoring Fed rate fears.
*Last week: Wallstreet up on bad jobs report due to relief of Fed rate fears.
Is it alright that all my tech stocks are down during a "tech boost"? :D
yeah..mine too
don't drink the kool-aid. chip shortage will decimate every peripheral device
This is nonsensical. Just a week ago the market pumped due to a bad jobs report. How in the world is hyperinflation and fewer jobless claims good for the market if the market is pretty much just moving based on likelihood pf rate increase? This entire market bubble is reliant on the fiat bubble and interest rates staying at zero. They have to keep hyperinflating the currency to help wallstreet and eliminate the middle class for their socialist/communist agenda.
Lol these headlines. just stop, its the same as if you write "stocks rebounded because, why not?" you do not have q clue and just make bs to try to make sense of it.
My dog ran up a hill , the cat ran down, the rat are the cheese .... Good reasons to sneeze . Thats why
Suddenly the jobs were there all along.
Well , the jobs dont pay and wont because of inflation and no profit to be made . Fed made a mess
Can you guys stop making up wrong reasons trying to explain market moves?
And just like that Inflation is no longer an issue!..Thanks FED
whew .. inflation is no longer a problem. I was worried for a minute.
One day jobless claims will be 0 - when everyone is already jobless and on welfare. Bullish for stocks.
Powell don’t have to explain about CPI data because market goes up! 😆
Problem is 16 million + are already collecting
very informative and really helpful to take right market decision
If the stock market was a real person, he/she would be put on medication under the supervision of two psychiatrists and put under duress as he/she cannot think logically
what to say, how market changed in less than 24 hours
Ah yes, another predictable miracle, as another major loss is reversed the day after it occurs.  Welcome to the US Ponzi Scheme, greatest financial fraud in history, and biggest investment JOKE in the world, as it continues to financially defile America in broad daylight.
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