NEW YORK: US stocks closed slightly higher on Wednesday (Nov 15), as fresh inflation data reinforced investor hopes that the Federal Reserve (Fed) is done raising interest rates, while retail stocks were boosted by an upbeat forecast from Target.
The Dow Jones Industrial Average rose 163.51 points, or 0.47%, to 34,991.21, the S&P 500 gained 7.18 points, or 0.16%, at 4,502.88 and the Nasdaq Composite added 9.46 points, or 0.07%, at 14,103.84.
The benchmark S&P 500 and tech-heavy Nasdaq had posted their biggest daily percentage gains in more than six months on Tuesday, after the consumer prices data.
Shares in Target surged 17.8% in its biggest one-day percentage gain since August 2019 after the retailer forecast a fourth-quarter profit largely above expectations on easing supply-chain costs.
Target’s bright outlook lifted shares of other retailers including Macy’s, which rose 7.5%, and Kohl’s, which closed up almost 9%. The S&P 500 consumer staples index, which includes Target, was the top sector gainer, adding 0.7%.
Stocks had rallied on Tuesday after a softer-than-expected consumer price index (CPI) reading boosted optimism that the Fed might be able to avoid raising rates further.
Additional data on Wednesday showed the biggest decline in producer prices in 3½ years in October on the back of cheaper petrol, offering more evidence of easing price pressures.
Also on Wednesday, retail sales data showed a smaller-than-expected decline of 0.1% in October, against forecasts of a 0.3% fall, according to economists polled by Reuters.
“Those two data points reaffirmed the message from Tuesday that the Fed seems to be navigating the soft landing quite well,“ said Ronald Temple, chief market strategist at Lazard.
After the big move by Wall Street’s three major indices in the previous session, Temple said Wednesday’s data “doesn’t change the narrative”.
Among the S&P 500’s 11 major sectors energy was the biggest decliner, down 0.3%, followed closely by utilities . After consumer staples, communications services advanced the most, with a boost from Walt Disney. The entertainment company rose 3% after reports that activist investor ValueAct Capital had acquired a stake.
The Russell 2000 index again advanced, after closing 5.4% higher on Tuesday, as the prospect of stalling rate hikes provides particular relief to smaller companies, which are more dependent on floating rate loans. – Reuters
