Wall Street flat on mild rise in inflation
Wall Street's main indexes finished flat on Thursday, giving up most early gains on milder-than-feared inflation data as investors worried about the US economy's longer-term prospects and whether stocks had further room to run. Data showed headline and core consumer prices both climbed by 0.2 percent in July, with the headline number notching annual rise of 3.2 percent and the core up 4.7 percent. In the first hour of trading, the three benchmark indexes advanced more than 1 percent as traders bet the US Federal Reserve would stop further monetary tightening in 2023 and start cutting interest rates early next year. Stock prices started to sag from late-morning onwards, and bounced between positive and negative territory for much of the afternoon. "People looked at the headline number first and we had the big upswing, but as the day went on, the rally faded and that was probably the right reaction," said Gregg Abella, CEO of Investment Partners Asset Management. He noted that while inflation has slowed, a look beyond the headline number revealed that core inflation remained sticky, and as traders parsed the data, the initial positive sentiment became more subdued. San Francisco Fed President Mary Daly voiced that cautious tone, saying that while recent inflation data was moving in the right direction, more progress was needed before she would feel comfortable the central bank had done enough. Thursday's modest gains were only the second positive August day for the S&P 500 and Nasdaq Composite, as investors have used any gains as an opportunity to take profits after five months of advances on both indexes driven by strong growth in big technology stocks. "A lot of tech valuations are predicated on rates falling, but there is nothing in the numbers, in my mind, to say that we're cutting rates – in fact, we may even see another quarter-point increase before the end of the year," said Abella, noting some big tech valuations were already lofty. The Dow Jones Industrial Average rose 0.15 percent, to 35,176, the S&P 500 gained 0.03 percent, to 4,469 and the Nasdaq Composite added 0.12 percent, to 13,738. Capri surged 55.7 percent after larger rival Tapestry said it would buy the Michael Kors parent in an US$8.5 billion deal. Tapestry's shares fell 15.9 percent. US-listed shares of Alibaba climbed 4.6 percent after the e-commerce conglomerate reported upbeat quarterly sales on the back of improved consumer sentiment. (Reuters)_____________________________
Last updated: 2023-08-11 HKT 09:03 