U.S. Stocks Climb After Inflation Data
14 March 2018 - 2:44AM
Dow Jones News
By David Hodari and Allison Prang
-- U.S. inflation data in focus
-- Dow, S&P 500, Nasdaq climb
-- Trading calm in Europe, Asia-Pacific
U.S. stocks rose Tuesday as investors responded positively to
the latest inflation data that showed consumer prices rose modestly
in February.
The Dow Jones Industrial Average rose 91 points, or 0.4%, to
25269. The S&P 500 climbed 0.2% and the Nasdaq added less than
0.1%.
The consumer-price index, which measures what Americans pay for
everything from shampoo to hotel stays, rose 0.2% in February after
climbing a seasonally adjusted 0.5% in January, the Labor
Department said. Economists surveyed by The Wall Street Journal
expected a 0.2% increase.
Erik Davidson, chief investment officer for Wells Fargo Private
Bank, said the market doesn't have "to fear an extremely aggressive
Fed." He expects the Federal Reserve to stay on track for three
interest-rate increases this year.
"Because of this inflation data this morning...the Fed is not
necessarily going to need to act more quickly," he said.
Also Tuesday morning, President Donald Trump said he would
nominate CIA director Mike Pompeo as secretary of state to replace
Rex Tillerson. The inflation data was still the bigger news
Tuesday, observers said, as Wall Street has learned to deal with
turnover in the administration.
"This is now what is expected to be normal," said Matt Miskin,
market strategist at John Hancock Investments.
A lack of inflationary jitters during 2017 allowed U.S. stock
indexes to leap to multiple records early in 2018, while investors
kept long-term bond yields subdued.
Since the start of February, however, rising inflation in both
the U.S. and Europe has prompted investors to second-guess
central-bank guidance, fueling speculation about tighter monetary
policy.
The inflation data was released against a fraught trading
backdrop, with the Trump administration's announcement of tariffs
on steel and aluminum imports having provoked rebukes from China
and the European Union in recent days. How those trading partners
now respond may have broader implications for global economic
growth, analysts say.
"Trade and GDP growth are intimately linked. You've seen a big
pickup in trade in the past six months, but now, that growth rate
is slowing," said Edmund Shing, global head of equity derivative
strategy at BNP Paribas. "The chances of a global recession in the
next year or two are already rising and if you add to that a
slowdown in the rate of trade -- not just a slowdown in trade
growth -- it could have repercussions for global economies."
The yield on U.S. 10-year Treasurys edged down to 2.863%,
according to Tradeweb, from 2.870% on Monday.
In corporate news, shares of chip maker Qualcomm fell 3.9% after
President Trump on Monday blocked Broadcom's $117 billion hostile
takeover bid on national security grounds.
Elsewhere, the Stoxx Europe 600 slipped 0.4%, after Asia-Pacific
indexes shrugged off early pressure.
In Asia, Japanese stocks closed up 0.7%, erasing earlier losses.
The Shanghai Composite fell 0.5% on news that China plans to merge
its banking and insurance regulators.
Kenan Machado contributed to this article.
Write to David Hodari at David.Hodari@dowjones.com and Allison
Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
March 13, 2018 11:29 ET (15:29 GMT)
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