Wall Street is rising as inflation data supports Fed games

A trader looks at his chart while working on the floor of the New York Stock Exchange July 8, 2014. REUTERS / Brendan McDermid

January 12 (Reuters) – US stock indices rose on Wednesday after inflation data largely met high expectations, alleviating some fears that the Federal Reserve would withdraw support, with megacap technology stocks giving the biggest boost.

Data from the Ministry of Labor showed that the consumer price index (CPI) increased 0.5% last month after rising 0.8% in November, while the CPI rose 7.0% over the last 12 months up to and including December to the highest growth from year to year in almost four years. decade. read more

Economists asked by Reuters had forecast a CPI increase of 0.4% for December and 7.0% on an annual basis.

“Investors were preparing for even hotter inflation than we actually saw. As bad as the number is and as much inflationary pressure as there is in the economy, there was a slight relief in that,” said Anthony Saglimbene, Ameriprise Financial’s global market strategist in Troy, Michigan.

“Today’s Inflation Report validates the Fed’s path and means they do not need to be more aggressive than what is already priced in.”

The central bank’s plan to facilitate accommodation to combat inflation includes raising interest rates, which analysts expect to start as soon as March, as well as phasing out the bond buying program and reducing assets. read more

At 14:23 ET the Dow Jones Industrial Average (.DJI) rose 7.95 points, or 0.02%, to 36,259.97, the S&P 500 (.SPX) gained 12.21 points, or 0.26%, to 4,725.28 Composite (daIX) and Nas. ) added 59.02 points, or 0.39%, to 15,212.47.

Eight of the 11 major S&P 500 sector indices rose, with materials (.SPLRCM), consumer discretionary (.SPLRCD) and technology (.SPLRCT) leading the percentage increase.

Growth and technology stocks, hit by rising government interest rates and hawkish comments from the Federal Reserve, have staged a comeback this week, with investors looking at a series of calculations to decide whether to buy the rally or prepare for more declines.

Also on the watch list this week is the unofficial kick-off for the fourth quarter earnings season.

JPMorgan Chase & Co (JPM.N), Citigroup Inc (CN) and Morgan Stanley (MS.N) will report their results on Friday, followed by Bank of America Corp (BAC.N) on 19 January. read more

“Income may exceed expectations, and that’s what keeps investors active despite knowing that the Fed will start tightening in the coming months,” said Eric Schiffer, CEO of California-based Private Equity the company Patriarch Organization.

“You’ll also see minor comments about revenue calls referring to supply chain constraints this season.”

In sectors such as aviation, however, the outbreak of the Omicron variant of the coronavirus could dampen earnings expectations, with Bank of America (BAC.N) analysts believing that the impact of the pandemic on corporate travel is the biggest risk for the aviation industry. read more

The health index (.SPXHC), S & P’s largest percentage decline, was weighed down by shares of the pharmaceutical manufacturer Eli Lilly (LLY.N), which fell 3.7%, and Biogen (BIIB.O), which fell 7%.

The U.S. government’s Medicare program said that while it plans to cover Biogen’s Aduhelm Alzheimer’s treatment, it will require patients to be enrolled in a clinical trial, which limits access to the drug. This may also affect Eli Lilly, who is developing similar medicines. read more

Progress issues outperformed the NYSE by 1.19 to 1; on the Nasdaq favored a ratio of 1.25 to 1 declines.

The S&P 500 posted 38 new 52-week highs and 1 new downturn; The Nasdaq Composite recorded 54 new highs and 108 new lows.

Reporting by Bansari Mayur Kamdar, Shreyashi Sanyal and Anisha Sircar in Bengaluru, Sinéad Carew in New York; Edited by Maju Samuel and Aurora Ellis

Our standards: Thomson Reuters Trust Principles.