Stocks climb again as investors shake off inflation worries
NEW YORK (AP) — Investors saw some new hints that inflation is increasing on Wednesday, but they still sent banks, technology firms, and consumer-focused companies climbing. That was a big change after the market’s inflation-inspired plunge earlier this month.
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NEW YORK (AP) — Investors saw some new hints that inflation is increasing on Wednesday, but they still sent banks, technology firms, and consumer-focused companies climbing. That was a big change after the market’s inflation-inspired plunge earlier this month.
After a shaky start, stocks rose for the fourth straight day, and banks made some of the largest gains as bond yields reached new four-year highs. The move in yields came after the government said consumer prices climbed in January a slightly faster pace than economists had expected. A different government report showed retail sales were unchanged in December and slipped last month.
The Standard & Poor’s 500 index rose 35.69 points, or 1.3 percent, to 2,698.63. The Dow Jones industrial average added 253.04 points, or 1 percent, to 24,893.49. The Nasdaq composite climbed 130.10 points, or 1.9 percent, to 7,143.62. The Russell 2000 index of smaller-company stocks rose 27.15 points, or 1.8 percent, to 1,522.10.
The Labor Department said prices paid by consumers rose 0.3 percent in January, excluding volatile items like food and energy. That’s the most in a year, and it sent bond yields and gold prices higher.
The yield on the 10-year Treasury note rose to 2.91 percent, its highest mark in four years, from 2.84 percent a day earlier. That helped banks, as the higher interest rates make lending more profitable. But it hurt high-dividend companies like utility and phone companies. Those stocks are often compared to bonds because of their big dividend payments and relatively steady prices, but investors find them less appealing when bond yields are rising.
Americans cut back on purchases of cars, furniture and a variety of other products in January. The Commerce Department also lowered its estimate for spending in December. That came after a three-month stretch that included the strongest holiday sales in a decade.
Retailers traded higher despite the tepid numbers in the report. Amazon rose $36.54, or 2.6 percent, to a record high of $1,451.05 and Tiffany added $2.15, or 2.1 percent, to $103.11. Nike picked upNetflix climbed after the streaming video company said it signed another big-name TV writer and producer to a production deal. According to reports, “Glee” and “American Horror Story” producer Ryan Murphy received a $300 million deal that will span five years. In August Netflix announced a deal with “Scandal” and “Gray’s Anatomy” creator and producer Shonda Rhimes.
Gold jumped $27.60, or 2.1 percent, to $1,358 an ounce. Silver rose 35 cents, or 2.1 percent, to $16.88 an ounce. Copper picked up 7 cents, or 2.3 percent, to $3.24 a pound.
U.S. crude rose $1.41, or 2.4 percent, to $60.60 a barrel in New York. Brent crude, used to price international oils, gained $1.64, or 2.6 percent, to $64.36 a barrel in London.
Wholesale gasoline added 3 cents to $1.71 a gallon. Heating oil rose 5 cents to $1.88 a gallon. Natural gas lost 1 cent to $2.59 per 1,000 cubic feet.
The dollar fell to 107.09 yen from 107.69 yen. The euro dipped to $1.2435 from $1.2355.
The DAX in Germany rose 1.2 percent and the French CAC 40 added 1.1 percent. The FTSE 100 in Britain picked up 0.6 percent. Japan’s benchmark Nikkei 225 slipped 0.4 percent after its economy grew at a slower-than-expected pace in the fourth quarter. South Korea’s Kospi gained 1.1 percent and Hong Kong’s Hang Seng rose 2.3 percent.
