S&P 500 Hits Record as Mixed Economic Data Lift Stocks
June 10 2021 - 5:08PM
Dow Jones News
By Joe Wallace and Amber Burton
U.S. stocks edged higher Thursday after data showed another leap
in consumer prices and a continuing recovery in the labor market as
the economy emerges from the Covid-19 pandemic.
The S&P 500 set a new closing record, climbing 19.63 points,
or 0.5%, to 4239.18. The Dow Jones Industrial Average jumped 19.10
points, or 0.1%, to 34466.24. The technology-focused Nasdaq
Composite rose 108.58 points, or 0.8%, to 14020.33. The Dow and
Nasdaq are both within 1% of the all-time highs they hit this
spring.
The major indexes have moved in a narrow range in recent weeks.
Investors are balancing optimism in the economic recovery against
concerns about inflation and supply shortages, among other
risks.
Consumer prices rose 5% in May from a year earlier, the Labor
Department said, marking the highest annual inflation rate in
nearly 13 years. Investors are seeking to determine whether the
acceleration will fade away or prove long-lasting, potentially
prompting the Federal Reserve to dial back efforts to stimulate the
economy.
"As long as we've got cheap money, we've got a savings glut, not
just in the West but in Asia. I think there is decent support for
stocks," said Jane Foley, head of foreign-exchange strategy at
Rabobank. "I don't imagine there is going to be a really serious
downturn."
Inflation expectations have eased in recent weeks, but the
issues remains at the top of mind for many money managers.
Thursday's data won't end the arguments over how inflation may play
out over the coming years, Ms. Foley said.
"What's quite stunning given the debate over inflation that has
been really dominating market attention this year is that bond
yields this week have slipped so far," she added.
On Thursday, the yield on 10-year Treasury notes edged down to
1.458%, its lowest level in more than three months, from 1.489% on
Wednesday. A combination of tepid economic data, the Federal
Reserve's message that it won't quickly withdraw stimulus to ward
off inflation, and strong demand for bonds from investors overseas
have been dragging yields down, analysts say.
Separate data showed jobless claims, seen as a proxy for
layoffs, fell to 376,000 last week, extending a recent decline for
unemployment benefits and adding to signs of a healing labor
market.
Some remain wary, though, of last week's falling jobless
claims.
"I don't put that much credence in the weekly jobless claims,
just because they are volatile and it can be so much that comes
into play with it," said Keith Buchanan, a senior portfolio manager
at Globalt Investments. "It's really tough to have week over week
takeaways from a number that's been notoriously volatile and not
really looked at from a week to week basis before the
pandemic."
Though the trend is clearly positive, Mr. Buchanan said he is
looking to see several more weeks of data confirming the
optimism.
Among meme stocks, GameStop shares fell $82.17, or 27%, to
$220.39. The videogame retailer said Wednesday it was planning a
stock offering after resetting its leadership team.
Oxford Industries, the owner of the Tommy Bahama, Lilly Pulitzer
and Southern Tide brands, climbed $8, or 8.2%, to $106.10, after
reporting a first-quarter profit on higher sales.
Overseas markets were mixed. Despite a decline in some travel,
leisure and retail stocks, the Stoxx Europe 600 ticked up less than
0.1%, setting another record. The European Central Bank kept its
key interest rates on hold and said it would keep buying bonds at a
faster pace than earlier in the year.
Asian markets closed broadly higher. The Shanghai Composite
Index ended the day up 0.5%, while Japan's Nikkei 225 edged up
0.3%.
Write to Joe Wallace at Joe.Wallace@wsj.com and Amber Burton at
Amber.Burton@wsj.com
(END) Dow Jones Newswires
June 10, 2021 16:57 ET (20:57 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.