Wall Street closes up, another weekly gain ahead of inflation data

The markets all started on a high, then took a dive immediately out the gate until about 11:30 when all three indexes started a recovery that went through close with the S&P and Nasdaq closing near flat, the Dow doing better with a respectable 3-digit gain. It might have been around that time that the Atlanta Fed prez made the statement acknowledging that the economy was slowing, though this was tempered by the Dallas Fed prez saying monetary policy might not yet be tight enough. 

The other news was consumer confidence data showing expected increasing inflation, which is why next week’s CPI and PPI reports will be so important, hoping they’ll come in at their coolest in three years. The bottom line: “Nobody really wants to take a big position prior to next week.” Q1 is in the final stretch with 459 companies reporting and 77% beating estimates. Volume came in at 9.47 billion, still well below the 10.87 4-week average. 

Wall Street closes up, another weekly gain ahead of inflation data

By Stephen Culp

Fri May 10, 2024 4:15 PM

DJ: 39,387.76  +331.37       NAS: 16,346.27  +43.51        S&P: 5,214.08  +26.41     5/9

DJ: 39,512.84  +125.08       NAS: 16,340.87  -5.40           S&P: 5,222.68  +8.60       5/10

NEW YORK, May 10 (Reuters) - U.S. stocks eked out modest gains on Friday and all three indexes posted another weekly advance as investors parsed comments from Federal Reserve officials and looked ahead to crucial inflation data next week.  The S&P 500 and the Dow were modestly higher and the Nasdaq ended essentially unchanged. All three indexes were up for the week with the blue-chip Dow nabbing its largest Friday-to-Friday percentage advance since mid-December.  Commentary from several Fed officials helped set expectations as market participants looked toward next week's inflation data.

"Nobody really wants to take a big position prior to next week," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "And we’re getting into a time of year where people seem to slip out early on Fridays."  "The biggest story is the decline in Consumer Sentiment, but outside of that there isn't much to hang your hat on," Carlson added.

Atlanta Fed President Raphael Bostic acknowledged recent clues the economy is slowing, but added the timing of rate cuts remains uncertain.  Striking a more hawkish tone, Dallas Fed President Lorie Logan said it was unclear whether monetary policy was tight enough to bring inflation down to the central bank's 2% target.  Hints of progress toward that target will come next week when the Labor Department releases its Consumer and Producer price indexes (CPI and PPI).  Analysts expect the crucial CPI report to show underlying "core" price of 3.6% year-on-year, which would be the coolest reading in over three years.  "The Fed is geared not to raise rates but cut them, so 'higher for longer' is about as dire as it's going to unless things really fall off the table," said Paul Nolte, senior wealth advisor & market strategist at Murphy & Sylvest in Elmhurst, Illinois.

On Friday, the University of Michigan's preliminary take on May Consumer Sentiment showed the mood of the American consumer has taken its biggest monthly plunge since August 2021, while near- and long-term inflation expectations heated up.

    UMich inflation expectations 

 

The Dow Jones Industrial Average (.DJI), opens new tab rose 125.08 points, or 0.32%, to 39,512.84, the S&P 500 (.SPX), opens new tab gained 8.6 points, or 0.16%, to 5,222.68 and the Nasdaq Composite (.IXIC), opens new tab dropped 5.40 points, or 0.03%, to 16,340.87.  Of the 11 major sectors in the S&P 500, consumer staples (.SPLRCS), opens new tab enjoyed the largest percentage gains, while consumer discretionary shares (.SPLRCD), opens new tab were the laggards.

First-quarter earnings season is approaching its finish line. Of the 459 of the companies in the S&P 500 that have reported, 77% delivered consensus-beating results, according to LSEG data.

Nvidia (NVDA.O), opens new tab gained 1.3% after Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab, the world's largest chipmaker and a major supplier to Nvidia, reported a near 60% jump in April sales.  Novavax shares (NVAX.O), opens new tab surged 98.7% in the wake of the vaccine maker's licensing deal worth up to $1.2 billion with Sanofi (SASY.PA), opens new tab.  SoundHound AI (SOUN.O), opens new tab jumped 7.2% after beating first-quarter revenue estimates.

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.59-to-1 ratio favored decliners.  The S&P 500 posted 58 new 52-week highs and one new low; the Nasdaq Composite recorded 95 new highs and 105 new lows.

Volume on U.S. exchanges was 9.47 billion shares, compared with the 10.87 billion average for the full session over the last 20 trading days.