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

Economy May 13, 2021 09:31PM ET
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© 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
 
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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.

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.

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

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Comments (33)
kaveh kls
kaveh kls May 14, 2021 6:34AM ET
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Ron Raymond
Ron Raymond May 14, 2021 4:42AM ET
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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.
Adam Paine
Adam Paine May 13, 2021 11:49PM ET
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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
rweqrwq rwqrwqrwq
rweqrwq rwqrwqrwq May 13, 2021 11:42PM ET
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these headlines are the best comedy in the world
scott clawson
scott clawson May 13, 2021 3:26PM ET
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more lies from the MSM and corrupt politicians
Todd Gray
Todd Gray May 13, 2021 3:26PM ET
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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.
scott clawson
scott clawson May 13, 2021 1:40PM ET
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more lies from the corrupt Media on the corrupt scam market.
Ra Su
Ra Su May 13, 2021 1:14PM ET
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have you even graduated high schools ? This is one of the worst jobless claims.
Brandon Bell
Brandon Bell May 13, 2021 1:04PM ET
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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?
Brandon Bell
Brandon Bell May 13, 2021 12:49PM ET
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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.
Brandon Bell
Brandon Bell May 13, 2021 12:49PM ET
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*Last week: Wallstreet up on bad jobs report due to relief of Fed rate fears.
 
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