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U.S. weekly jobless claims increase
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Producer prices data cooler than expected
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Netflix jump after Wedbush sees revenue growth
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Harley-Davidson falls as CFO steps down
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Indexes up: Dow 0.97%, S&P 1.20%, Nasdaq 1.89%
(Updates to afternoon, adds NEW YORK dateline, changes byline)
By Stephen Culp
NEW YORK, April 13 (Reuters) - U.S. stocks advanced on
Thursday as economic data showed cooling inflation and a
loosening labor market, fueling optimism that the Federal
Reserve is nearing the end of its aggressive interest rate hike
cycle.
All three major U.S. stock indexes rose sharply, with
interest rate sensitive megacaps including Apple Inc ,
Microsoft Corp and Amazon.com providing the
most upside muscle and sending the tech-heavy Nasdaq up 1.9%, on
track for its biggest one-day gain in nearly a month.
Data released before the bell showed a steeper-than-expected
cooldown in producer prices and new claims for jobless benefits
coming in above consensus. Both signal that the Fed's hawkish
barrage of rate hikes, which began over a year ago, is working
as intended.
"Inflation is going to come down faster than the Fed thinks
it will, but ironically the banking crisis is bullish for a Fed
pause, which is bullish for the market, particularly tech
stocks," said Jay Hatfield, chief executive officer and
Infrastructure Capital Management in New York.
The data comes on the heels of Wednesday's
cooler-than-expected Consumer Price Index report, which raised
the likelihood of yet another 25 basis point rate hike at the
conclusion next month's FOMC policy meeting.
"The Fed will raise rates one more time in May; one and
done," Hatfield added. "They are worried about the banking
system, so that should help them get to the right answer.
"They'll start cutting in 2024."
Financial markets are pricing in a roughly one-in-three
probability that the central bank will press the pause button
and let the Fed funds target rate stand in the 4.75% to 5.00%
range.
Investor focus now shifts to first-quarter earnings season,
which jumps into full swing on Friday when a trio of big banks,
Citigroup , JPMorgan Chase & Co , Wells Fargo & Co report.
Analysts expect aggregate first-quarter S&P 500 earnings to
come in 5.2% below the year-ago quarter, a stark reversal from
the 1.4% year-on-year growth seen at the beginning of the
quarter, according to Refinitiv.
At 2:05 p.m. ET, the Dow Jones Industrial Average rose 325.52 points, or 0.97%, to 33,972.02; the S&P 500 gained 49.03 points, or 1.20%, at 4,140.98; and the Nasdaq
Composite added 225.84 points, or 1.89%, at 12,155.18.
Among the 11 major sectors of the S&P 500, communication
services was up the most, while industrials and materials , outperformers in recent sessions,
suffered the steepest percentage declines.
Delta Air Lines Inc shares fell 0.9% following the
company's first-quarter profit miss.
Shares of Harley-Davidson Inc slid 3.2% after the
motorcycle maker announced Chief Financial Officer Gina Goetter
was leaving the company at the end of April.
Groupon Inc jumped 3.4% after the company appointed
Jiri Ponrt to succeed Damien Schmitz as chief financial officer.
Netflix Inc rose 4.1% after Wedbush said the
streaming platform's revenue growth of new subscribers could
drive up profitability.
Advancing issues outnumbered decliners on the NYSE by a
3.04-to-1 ratio; on Nasdaq, a 2.83-to-1 ratio favored advancers.
The S&P 500 posted eight new 52-week highs and one new low;
the Nasdaq Composite recorded 58 new highs and 121 new lows.
(Reporting by Stephen Culp; Additional reporting by Sruthi
Shankar and Ankika Biswas in Bengaluru; Editing by Richard
Chang)
