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Slowing inflation growth lifts Dow, S&P to records

Reuters2021-08-12

  • U.S. CPI growth slows in July
  • Coinbase Global jumps on posting upbeat Q2 profit
  • Virgin Galactic slides as MS downgrades to "underweight"
  • Dow up 0.62%, S&P 500 up 0.25%, Nasdaq down 0.16%

NEW YORK, Aug 11 (Reuters) - The Dow Jones Industrial Average and S&P 500 closed at record levels on Wednesday, as data indicated U.S. inflation growth may have peaked, while sectors tied to economic growth advanced on the heels of the passage of a large infrastructure bill.

The Labor Department said the consumer price index increased 0.5% last month after climbing 0.9% in June, the largest drop in month-to-month inflation in 15 months, easing concerns about the potential for runaway inflation.

"Certainly, the numbers show you more deceleration," said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC in New York.

"This number is going to put the Fed in a little bit of a quandary because they've gone out with all this rhetoric about tapering, about tightening rates, about being defensive and the inflation numbers aren't quite where they should be, but they’re certainly not showing that this thing is out of control."

Investors have been closely attuned to inflation pressures in recent months, concerned that a continual rise in prices could push the Federal Reserve to begin to scale down its ultra-accommodative policy stance earlier than anticipated.

Kansas City Federal Reserve President Esther George said on Wednesday that with the U.S. economy growing at a robust pace, it signals the "time has come to dial back the settings." In addition, Dallas Federal Reserve President Robert Kaplan said the central bank should announce its timeline to reduce its massive bondholding next month, with tapering to begin in October.

The DJIA rose 220.3 points, or 0.62%, to 35,484.97, the S&P 500 gained 10.95 points, or 0.25%, to 4,447.7 and the NASDAQ dropped 22.95 points, or 0.16%, to 14,765.14.

After the U.S. Senate passed a $1 trillion bipartisan infrastructure package on Tuesday, an additional $3.5 trillion budget plan full of new domestic programs was also approved by the legislative body but disagreements within the Democratic party threatened the size and scope of the spending.

Shares of equipment maker Caterpillar advanced 3.55% and was the biggest boost to the Dow and peer John Deere gained 2.51%. Also moving higher were construction materials supplier Vulcan Materials, up 3.24% and steelmaker Nucor, up 3.91% building on gains in the prior session on expectations of benefiting from infrastructure projects.

The materials and industrials were the best performing of the 11 major S&P sectors.

Technology stocks moved off earlier lows in the wake of a strong 10-year note auction, which sent yields lower after a five day streak of gains session amid optimism about a stronger economic reopening.

NortonLifeLock Inc. jumped 8.70% after the cybersecurity company agreed to buy London-listed rival Avast for up to $8.6 billion.

Coinbase Global, Inc. climbed 3.24% after the cryptocurrency exchange beat market estimates for second-quarter profit, helped by a near 38% jump in trading volumes on a sequential basis.

Virgin Galactic plunged 12.67% after Morgan Stanley downgraded the stock to "underweight" from "equal-weight", pointing to a prolonged period of no flights.

Advancing issues outnumbered declining ones on the NYSE by a 2.08-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored advancers.

The S&P 500 posted 56 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 94 new highs and 112 new lows.

Volume on U.S. exchanges was 8.62 billion shares, compared with the 9.55 billion average for the full session over the last 20 trading days.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment275

  • KeatWei
    ·2021-08-12
    Like pls
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    • JeremyKok
      hi. please like and comment back. t
      2021-08-13
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  • TeikLeong
    ·2021-08-12
    Like
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    • TeikLeong
      ok
      2021-08-13
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    • KeatWei
      ??
      2021-08-12
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    • JeremyKok
      hi. please like and comment back. thank you.
      2021-08-13
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  • dent
    ·2021-08-12
    Hi
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  • zkkkkk
    ·2021-08-12
    Good
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  • Deonc
    ·2021-08-12
    Good update. please like and comment
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    • Deonc
      Thanks
      2021-08-12
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    • Deonc
      Thanks
      2021-08-12
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    • WeiMin
      ok comment
      2021-08-12
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  • bostonxsgp
    ·2021-08-12
    Pls like and comment
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    • cozyli
      done pls like back. thks
      2021-08-12
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  • JY00
    ·2021-08-12
    Hmm
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  • Francis1977
    ·2021-08-12
    Informative
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    • Alex1709
      True
      2021-08-12
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    • OldCat
      commented
      2021-08-12
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  • erichosk
    ·2021-08-12
    One month (July) doesn't make a trend.
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  • e13v3n
    ·2021-08-12
    pl like
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    • erichosk
      done. pls reciprocate.
      2021-08-12
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  • JavierHuat88
    ·2021-08-12
    Sell now 
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    • JY00
      Huh
      2021-08-12
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  • Chinleong
    ·2021-08-12
    Inflation growth is tied to upbeat in economic growth, indicating stocks price have advanced to the peak too
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    • JavierHuat88
      GG Sell!
      2021-08-12
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    • Davidgoh18
      agreed and correction will be soon
      2021-08-12
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    • JavierHuat88
      Sell now?
      2021-08-12
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  • Ryeojung
    ·2021-08-12
    [微笑] 
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  • Jaymand
    ·2021-08-12
    Like pls
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    • Mtan23
      Yes
      2021-08-12
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  • quantarize
    ·2021-08-12
    Like
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  • qwertytigger
    ·2021-08-12
    Help like
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  • ys2
    ·2021-08-12
    ??
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  • Fionfion82
    ·2021-08-12
    Like
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    • ys2
      ??
      2021-08-12
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  • Simplewind
    ·2021-08-12
    Pls like.  Thanks
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    • edamame
      done
      2021-08-12
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  • Totoroido
    ·2021-08-12
    Wow
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