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Stocks rise as CPI report shows cooling inflation
STORY: Wall Street’s main indexes ended higher on Thursday, the Dow and S&P 500’s third straight session of gains and Nasdaq’s fifth, after data showing a fall in consumer prices in December bolstered expectations of less aggressive interest rate hikes from the Federal Reserve.The Dow and Nasdaq each rose nearly two thirds of a percent, while the S&P 500 gained about a third of a percent.A report from the U.S. Labor Department showed the consumer price index fell in December from the previous month for the first time in more than 2-1/2 years.Nancy Daoud, private wealth advisor at Ameriprise Financial, said that was giving investors hope that inflation was now on a sustained downward trend.”That’s clearly the big story. There’s some optimism that inflation is finally slowing down and perhaps that will prompt the Fed to pull back on all these rate hikes that have been killing us. But I wouldn’t put too much into that. I do believe the Fed will continue to raise interest rates until we’ve licked the whole inflation problem. And we have not done that yet. I mean, although it’s down from last month, it’s still higher than it was last year at this time.”Shares of Microsoft, which rose more than a percent, provided the biggest boost to the S&P 500 on Thursday.Energy shares also were higher as oil prices rose by about $1 a barrel, supported by the CPI report and optimism over China’s demand outlook.Shares of Tesla were near flat after Bloomberg, citing people familiar with the matter, reported the carmaker has delayed plans to expand its Shanghai factory.And shares of Bed Bath & Beyond rose another 50% on Thursday, as the meme stock rally continued to lift the struggling retailer as it explores a possible bankruptcy filing.
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