By Yasin Ebrahim
Investing.com – The Dow jumped to fresh record highs Wednesday, led by value stocks and ongoing optimism for a stronger recovery with another wave of fiscal stimulus, while tech stocks gave up gains even as U.S. rates fell on signs that inflation remains tame.
The {169|Dow Jones Industrial Average}} rose 1.53%, or 488 points, and had hit intraday record of 32,330.64, and the S&P 500 rose 0.71% and theNasdaq Composite was flat after trading about 1% higher.
The Labor Department said on Wednesday its Consumer Price index rose 0.4% last month, in-line with economists' estimates. The latest data eased investor fears that inflation is set to spiral out of control and push U.S. rates up at a disorderly pace, muddying demand for the long-duration growth stocks that have longer paybacks.
"Despite inventory shortages, commodity price pressures and supply bottlenecks, inflation continues to be very tame," Jefferies (NYSE:JEF) said in a note.
Tech stocks, however, struggled to hold onto intraday gains following a 4% rally a day earlier, as semiconductor stocks slipped on a report pointing to signs of softer Apple iPhone demand.
Apple (NASDAQ:AAPL) reportedly plans to cut iPhone production by 20% during the first half of the year, Niukkei Asian Review reported, citing sources. Most of the cut in production was targeted at the iPhone 12 Mini.
Teradyne (NASDAQ:TER), Micron Technology (NASDAQ:MU) and Lam Research (NASDAQ:LRCX), each down more than 4%, were among the biggest decliners in semis.
The cyclicals sector of the market, such as financials and energy, which tend to move in tandem with the economy, continue to attract investment dollars as investors bet on a stronger economic recovery amid a boost from another round of stimulus.
President Joe Biden's $1.9 trillion stimulus package was passed the final vote in the House on Wednesday, and will now be sent to the White House to be signed into law.
Energy stocks were also boosted by rising oil prices as investors shrugged off a jump in weekly U.S. crude stockpiles for the second-straight week.
Crude inventories rose 13.8 million barrels last week, compared with economists' forecasts for a build of 816,000 barrels. The large build was attributed to a fall in crude inputs needed to make fuel products like gasoline as refineries in Texas make a slow return to operations following weather-related disruptions.
In other news, Roblox (NYSE:RBLX) made its public market debut at a price $64.50 a share, well above its reference price of $45. The shares were last trading at $69, up 54%.
GameStop (NYSE:GME), meanwhile, was involved in yo-yo action, swinging to a more than 40% loss before recovering losses to trade above the flatline.