Wall St. gains as inflation, jobless claims data ease rate concerns

  • U.S. weekly jobless claims rise
  • Producer prices unexpectedly fall in March
  • Harley-Davidson slips when CFO steps down
  • Indexes Up: Dow 0.05%, S&P 0.34%, Nasdaq 0.89%

April 13 (Reuters) – U.S. stock indexes rose on Thursday as producer price inflation moderated and a rise in weekly jobless claims relieved investors worried about how far the Federal Reserve will raise interest rates.

A Labor Department report showed producer prices unexpectedly fell in March as gasoline prices fell.

Data also showed that the number of Americans filing new claims for unemployment benefits rose more than expected last week, another sign that labor market conditions are easing.

“It’s a good sign that inflation is easing. The jobless claims were positive news for the Fed,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Inflation at the consumer and producer levels is heading south, in the right direction… Although elevated, it’s still good news and a big plus for the Fed to end its tightening cycle.”

The benchmark S&P 500 (.SPX) has traded in a tight range this month, recovering from a selloff fueled by the latest banking crisis in March as investors gauged the path to U.S. interest rates.

Wall Street closed lower on Wednesday after consumer prices showed they rose at a slower-than-expected pace in March, but core prices remained sticky and supported the case for another 25-basis-point rate hike by the Fed in May.

Investors were mostly stuck on expectations of a 25-bps hike after Thursday’s data.

U.S. Treasury yields fell, lifting rate-sensitive growth stocks. Apple Inc ( AAPL.O ), Amazon.com Inc ( AMZN.O ) and Alphabet Inc ( GOOGL.O ) rose nearly 2%.

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The economy-sensitive industrials ( .SPLRCI ), financials ( .SPSY ) and energy ( .SPNY ) sectors gave up some of their recent gains.

Minutes from the central bank’s latest policy meeting released on Wednesday showed banking sector pressure followed by concerns about a slowdown and many policymakers considering a pause in rate hikes last month.

Major U.S. banks JPMorgan Chase & Co ( JPM.N ), Citigroup Inc ( CN ) and Wells Fargo & Co ( WFC.N ) are scheduled to report quarterly results on Friday, and investors will be watching them closely for details on the overall health of the sector. .

Analysts expect S&P 500 companies to post a 5.2% profit decline in the first quarter, their worst showing since the third quarter of 2020, according to Refinitiv IBES data.

Financial firms that are part of the S&P 500 are expected to post 4.3% profit growth in the first quarter.

At 9:43 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 18.09 points, or 0.05%, at 33,664.59, while the S&P 500 (.SPX) was up 13.74 points, or 0.34%, at 4,105. Composite (.IXIC) was up 106.53 points, or 0.89%, at 12,035.87.

Harley-Davidson Inc ( HOG.N ) fell 3.1% after the motorcycle maker said Chief Financial Officer Gina Kotter was leaving the company at the end of April.

Advances outnumber decliners by a 2.00-to-1 ratio on the NYSE and 2.22-to-1 on the Nasdaq.

The S&P index posted three new 52-week highs and one new low, while the Nasdaq posted 29 new highs and 80 new lows.

Reporting by Shruti Shankar and Angika Biswas in Bangalore; Editing by Sriraj Kalluvila and Shaunak Dasgupta

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