Jobs, inflation data fail to move Wall Street
US stocks closed little changed on Thursday as news of hotter-than-expected inflation and signs of labour market strength dampened hopes for early interest rate cuts by the Federal Reserve this year, but a fall in Treasury yields kept declines in check. In a choppy session, equities opened higher and the benchmark S&P 500 briefly surpassed its record closing high of 4,797, hit in January 2022, before erasing initial gains. After ending 2023 with a strong rally, stocks have struggled to find upward momentum, with the S&P 500 up only 0.21 percent on the year, as mixed economic data and Fed officials' comments have led investors to scale back expectations for the timing and size of any rate cuts from the US central bank this year. The US Labour Department reported that consumer prices rose more than expected in December, with Americans paying more for shelter and healthcare. A separate report showed the number of people filing new claims for unemployment benefits unexpectedly fell last week to 202,000. "They're just understanding it for what it was. The thing that pushed it up was primarily shelter," said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina. "Nobody believes that is going to be a persistent go-forward problem apart from inflation, so the thing that drove the 'hot print' was something that everybody's kind of discounting." Comments from some Fed officials have pushed back on potential rate cuts. On Thursday, Cleveland Fed President Loretta Mester and Richmond Fed President Tom Barkin said consumer price data for December did little to assure them inflation is now on a steady track back to the central bank's 2 percent target, with more information needed before any decision to begin reducing rates. The Dow Jones Industrial Average rose 0.04 percent, to 37,711. The S&P 500 lost 0.07 percent, at 4,780 and the Nasdaq Composite gained just half point, at 14,970. A fall in Treasury yields helped keep losses for equities in check, after an auction of US$21 billion in 30-year bonds was well received. "People are still worried about supply in the Treasury market. ... Is there going to be sufficient demand to soak that all up? And especially at the long end, the real fear is at the long end and the auction today, it was just perfect," said Ladner. Microsoft briefly overtook Apple as the world's most valuable company, after the iPhone maker's shares dropped nearly 4 percent since the year began due to concerns over falling demand. Microsoft's shares rose 0.49 percent, while Apple shed 0.32 percent. (Reuters)