US stocks rally after benign inflation data
Traders work on the floor of the New York Stock Exchange. (Bryan R. Smith/AFP)
NEW YORK: Wall Street stocks finished solidly higher for a second straight session on Thursday (May 10) following benign US inflation data viewed as reducing the odds of aggressive Federal Reserve interest rate hikes.The Dow Jones Industrial Average gained 196.99 points (0.80 per cent) to 24,739.53.
The broad-based S&P 500 climbed 25.28 points (0.94 per cent) to close at 2,723.07, and the tech-rich Nasdaq Composite rose 65.07 points (0.89 per cent) to 7,404.97.The Consumer Price Index, which tracks costs for household goods and services, rose 0.2 per cent in April compared to March, seasonally adjusted, below the 0.3 per cent expected by analysts.Analysts said higher oil prices continue to be a concern as a possible catalyst for inflation to speed up, but that the pricing pressure for now was unlikely to prompt the Fed to accelerate its pace of interest rate increases."The CPI data is close to the Fed mandate on an annual basis, but the market remains happy as long as inflation is not accelerating out of control," said Adam Sarhan founder of 50 Park Investment.
Gains were fairly broad-based with companies including Apple, ExxonMobil, IBM, Johnson and Johnson and Disney among the stronger performers in the Dow with increases above one per cent.Travel company Booking Holdings slumped 4.7 per cent after projecting second-quarter earnings of between US$16.35 and US$17.00 per share, below some analyst expectations.Qualcomm jumped 3.4 per cent after announcing authorisation for US$10 billion in additional share repurchases.Ford rose 1.3 per cent following an announcement that it suspended production on its best-selling F-150 pickup trucks following a fire at a supplier. However, the automaker said it still had significant inventory of available vehicles at dealerships.
Source : http://www.channelnewsasia.com/news/business/us-stocks-rally-after-benign-inflation-data-10223290