Nasdaq leads Wall St to higher close as CPI report lifts sentiment
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[July 13, 2023] By
Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks ended solidly higher on Wednesday, led
by a gain of more than 1% in the Nasdaq after a report showed inflation
subsided further with consumer prices registering their smallest annual
increase in more than two years.
The data underscored expectations the Federal Reserve may let interest
rates stand after one more 25 basis point hike expected at its July
policy meeting.
Shares of big tech-related companies, which tend to be sensitive to
higher interest rates, gave the S&P 500 its biggest boost. The
technology sector was up 1.3%
In the 12 months through June, the CPI advanced 3.0%. That was the
smallest year-on-year increase since March 2021 and followed a 4.0% rise
in May.
Indexes eased off their early highs by late afternoon, but "bulls remain
firmly in charge," said Michael James, managing director of equity
trading at Wedbush Securities in Los Angeles.
"Clearly the CPI data we got was what the bulls wanted to see, and those
that have been sitting on the sidelines hoping for a pullback continue
to get frustrated."
The Dow Jones Industrial Average rose 86.01 points, or 0.25%, to
34,347.43, the S&P 500 gained 32.9 points, or 0.74%, to 4,472.16 and the
Nasdaq Composite added 158.26 points, or 1.15%, to 13,918.96.
Investors have been weighing how much longer the Fed will need to raise
rates to curb inflation.
The Cboe Volatility Index, Wall Street's fear gauge, eased.
The Labor Department report also showed the smallest monthly gain in
underlying consumer prices since August 2021.
"The market is sensing the Fed is getting closer and closer to that
final one and done," said Quincy Krosby, chief global strategist at LPL
Financial in North Carolina.
The S&P 500 banks index was up 0.6%. Reports from JPMorgan Chase and
other major U.S. banks due Friday unofficially begin the second-quarter
earnings season.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., July 7, 2023.
REUTERS/Brendan McDermid
U.S. chipmaker Broadcom secured EU antitrust approval for its $61
billion proposed acquisition of cloud computing firm VMware after
offering remedies to help rival Marvell Technology. Shares of VMware
were up 2.8%, while Broadcom was up 0.9% and Marvel was up 1.2%.
Nvidia shares rose 3.5% after people familiar with the matter said
SoftBank Group Corp's chip designer Arm Ltd is in talks to bring in
Nvidia as an anchor investor as it presses ahead with plans for a
New York listing that could happen in September.
Also, Nvidia said it will invest $50 million to speed up training
of Recursion's artificial intelligence models for drug discovery.
Recursion shares were up 78%.
Investors also digested news that U.S. Treasury Secretary Janet
Yellen's trip to China has raised hopes in Beijing that tariffs on
Chinese imports may be eased.
Volume on U.S. exchanges was 11.20 billion shares, compared with
the 11.15 billion average for the full session over the last 20
trading days.
Advancing issues outnumbered declining ones on the NYSE by a
3.23-to-1 ratio; on Nasdaq, a 1.93-to-1 ratio favored advancers.
The S&P 500 posted 66 new 52-week highs and 2 new lows; the Nasdaq
Composite recorded 129 new highs and 42 new lows.
(Reporting by Caroline Valetkevitch; additional reporting by Johann
M Cherian and Bansari Mayur Kamdar in Bengaluru; Additional
Reporting by Shashwat Chauhan; Editing by Shinjini Ganguli, Nick
Zieminski and David Gregorio)
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