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S&P 500, Nasdaq close up 4th straight week as optimism grows

Economy Aug 12, 2022 06:15PM ET
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2/2 © Reuters. FILE PHOTO: Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 8, 2022. REUTERS/Andrew Kelly/File Photo 2/2
 
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By Herbert Lash and Bansari Mayur Kamdar

NEW YORK (Reuters) - Wall Street closed higher on Friday as signs that inflation may have peaked in July increased investor confidence that a bull market could be under way and spurred the S&P 500 and the Nasdaq to post their fourth straight week of gains.

The S&P 500 is up 17.7% from a mid-June low, with the latest gains coming from data this week showing a slower-than-expected rise in the consumer price index and a surprise drop in producer prices last month.

The S&P 500 crossed a closely watched technical level of 4,231 points, indicating the benchmark index has recouped half its losses since tumbling from the all-time peak in January. A 50% retracement for some signals a bull market.

Graphic: U.S. Inflation: Past its peak?, https://graphics.reuters.com/USA-ECONOMY/INFLATION/zdvxozxmlpx/chart.png

"It's really just a number, but it certainly makes investors feel better - at least those who bought near the bottom," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

"I wouldn't declare victory over this bear market yet. There's likely some bad news still out there. But there's a very good chance we've seen the bottom."

The Dow Jones Industrial Average rose 424.38 points, or 1.27%, to 33,761.05, while the S&P 500 gained 72.88 points, or 1.73%, to 4,280.15 and the Nasdaq Composite added 267.27 points, or 2.09%, to 13,047.19.

For the week, the S&P 500 added 3.25%, the Dow rose 2.92% and the Nasdaq gained 3.8%.

Volume on U.S. exchanges was 9.99 billion shares, compared with the 11.04 billion average for the full session over the last 20 trading days.

As the S&P 500 and Nasdaq posted their longest weekly winning streaks since November, analysts noted the Federal Reserve still has its work cut out as it seeks to tame inflation by aggressively raising interest rates without sparking a recession.

"Markets certainly got great news this week on inflation," said Dec Mullarkey, managing director of investment strategy and asset allocation at SLC Management in Boston.

"A victory lap in some respects was in order, but it's not 'mission accomplished' by any means. It's still a very slow grind ahead."

Inflation by year-end might decelerate to 7% or a bit lower, but getting core inflation under 4%, which is double the Fed's target, will be tougher than markets anticipate, Mullarkey said.

Traders are pricing in a less hawkish Fed, with fed fund futures showing a 55.5% chance of Fed policymakers raising rates by 50 basis points when they meet in September, instead of 75 basis points. [FEDWATCH]

It was a sea of green on Wall Street for a second straight day, with all 11 major S&P 500 sectors rising, along with semiconductors, small caps and Dow transports. Growth stocks rose 2.1%, while value advanced 1.4%.

Investors bought $7.1 billion in equities in the week to Wednesday, according to a Bank of America (NYSE:BAC) note, with U.S. growth stocks recording their largest weekly inflow since December last year.

Also driving optimism was data showing U.S. consumer sentiment ticked further up in August from a record low this summer and American households' near-term outlook for inflation eased again on softening gasoline prices.

After a rough start to the year, better-than-expected second-quarter earnings from Corporate America have supported the upbeat sentiment for U.S. equities.

Analysts in aggregate believe the S&P 500 posted year-over-year earnings growth of 9.7% in the April to June period, much stronger than the 5.6% predicted at quarter-end, per Refinitiv.

Banks rose 1.4% to extend their rally for a sixth straight week.

GlobalFoundries Inc jumped 11.9% on being added to BofA Global Research's "U.S. 1 list."

Advancing issues outnumbered declining ones on the NYSE by a 4.43-to-1 ratio; on Nasdaq, a 2.76-to-1 ratio favored advancers.

The S&P 500 posted five new 52-week highs and 29 new lows; the Nasdaq Composite recorded 78 new highs and 39 new lows.

S&P 500, Nasdaq close up 4th straight week as optimism grows
 

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Comments (31)
elliot trach
elliot trach Aug 12, 2022 9:53PM ET
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you.people sure are pumping your 'mentors', I wonder if you get any financial benefits from doing so? on the one hand H Jason is making $5000 per week--but has only $9000 saved thru 10 days ago?? Don't go buy a house yet!!!?!
Samer Diab
Samer Diab Aug 12, 2022 9:53PM ET
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they r all scammers
Jins Ho
Jins Ho Aug 12, 2022 7:22PM ET
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so many shorties are whining. when will they ever learn?
Megat Anwar
Megat Anwar Aug 12, 2022 7:22PM ET
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so many longies are whining when market down over 5%. When you gonna learn?
Ac Tektrader
Ac Tektrader Aug 12, 2022 7:22PM ET
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two indicators that inflation is easing Is the commodity futures pricing and interest on the 10 year note. the 10 year note has risen in price showing a decline in return by one half of 1 percent. commodity prices in most markets have come down by 25%.even energy prices have retreated by as much as 35%. Energy pricing in the past has been the main driver of inflation, that the pricing on crude has dropped 35% is good news for the economy.this priceing reduction will start to have a visable effect in the market place in a few weeks.
Dave Jones
Dave Jones Aug 12, 2022 5:23PM ET
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Inflation is still going up.
First Last
First Last Aug 12, 2022 5:23PM ET
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Went from 9.5% to 8.5%.  That's down.
mustafa vickery
mustafa vickery Aug 12, 2022 5:23PM ET
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First Last  That is 8.5% UP year over year VS 9.5% last month. Nothing went down. Compared to last year. It is still high.
First Last
First Last Aug 12, 2022 5:23PM ET
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mustafa vickery  "The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July on a seasonally adjusted basis after rising 1.3 percent in June" -- www.bls.gov/news.release/cpi.nr0.htm
Ac Tektrader
Ac Tektrader Aug 12, 2022 5:23PM ET
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mustapha vickery,. two indicators that inflation is easing Is the commodity futures pricing and interest on the 10 year note. the 10 year note has risen in price showing a decline in return by one half of 1 percent. commodity prices in most markets have come down by 25%.even energy prices have retreated by as much as 35%. Energy pricing in the past has been the main driver of inflation, that the pricing on crude has dropped 35% is good news for the economy.this priceing reduction will start to have a visable effect in a market place in a few weeks.
Ac Tektrader
Ac Tektrader Aug 12, 2022 5:23PM ET
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two indicators that inflation is easing Is the commodity futures pricing and interest on the 10 year note. the 10 year note has risen in price showing a decline in return by one half of 1 percent. commodity prices in most markets have come down by 25%.even energy prices have retreated by as much as 35%. Energy pricing in the past has been the main driver of inflation, that the pricing on crude has dropped 35% is good news for the economy.this priceing reduction will start to have a visable effect in the market place in a few weeks.
Ac Tektrader
Ac Tektrader Aug 12, 2022 5:02PM ET
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the top is near... historically most major bear market rallies last 2 to3 wks. there is a outside chance that we could see a consolidation pattern that forms over the next four weeks before a resumption of the bear market decline.
First Last
First Last Aug 12, 2022 5:02PM ET
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Market has recovered more than 1/2 the loss from late 2021 to mid-June 2022.
Samer Diab
Samer Diab Aug 12, 2022 5:02PM ET
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the bottom was June 16 when I did most of my shopping while u r still whining about bear market rallies
Ac Tektrader
Ac Tektrader Aug 12, 2022 4:40PM ET
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john your nose is going to grow.credit card debt is 90 billion dollars lower than it was at the beginning of the pandemic. the rest of your far right rant is ridiculous...
Jack AAA
Jack_A Aug 12, 2022 4:35PM ET
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prepare for a bigger crash!!!
John Laurens
John Laurens Aug 12, 2022 4:23PM ET
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Credit card debt is craaaazy right now! What does that tell the experts. Blue chip investors are just excited that a militarized IRS is gonna raze the working class and lower middle class with the Biden wrecking ball. All good for ultra wealthy since they are the financiers of the dem deep state cabal.
Ac Tektrader
Ac Tektrader Aug 12, 2022 4:23PM ET
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john I see you're still pushing your far right rants and misinformation.....
Brad Albright
Brad Albright Aug 12, 2022 4:23PM ET
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Espionage!
Alpha Omega
Alpha Omega Aug 12, 2022 4:17PM ET
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Yes, slowing inflation when you believe what you hear and not what you see.Ask those who pay their dues on credit cards what is the rate of inflation.
First Last
First Last Aug 12, 2022 4:17PM ET
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What you can see 1st hand is tiny compared to all that's happening.
Megat Anwar
Megat Anwar Aug 12, 2022 4:03PM ET
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lol few weeks ago this guys talking about recession fears. growth fears stuff like that 🤡
 
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