After seeing considerable volatility early in the session, stocks have moved notably higher over the course of the trading day on Tuesday. The tech-heavy Nasdaq is leading the advance, regaining ground following the pullback seen over the two previous sessions.
Currently, the major averages are just off their highs of the session. The Nasdaq is up 188.62 points or 1.2 percent at 16,207.90, the S&P 500 is up 44.90 points or 0.9 percent at 5,162.84 and the Dow is up 228.44 points or 0.6 percent at 38,998.10.
The considerable strength that has emerged on Wall Street partly reflects a positive reaction to the Labor Department’s highly anticipated report on consumer price inflation in the month of February.
The Labor Department said its consumer price index climbed by 0.4 percent in February after rising by 0.3 percent in January. The increase matched economist estimates.
Excluding food and energy prices, core consumer prices also rose by 0.4 percent in February, matching the increase seen in January. Economists had expected core prices to rise by 0.3 percent.
The report also said the annual rate of consumer price growth ticked up to 3.2 percent in February from 3.1 percent in January. The year-over-year growth was expected to be unchanged.
Meanwhile, the annual rate of core consumer price growth slowed to 3.8 percent in February from 3.9 percent in January. Economists had expected the pace of growth to decelerate to 3.7 percent.
While core price growth slowed by slightly less than expected, the slowdown still seems to have added to optimism about the outlook for interest rates.
“Although inflation has continued to ease, much of core inflation remains ‘sticky’ and isn’t unwinding at a pace that would offer the Fed the confidence it needs to begin the easing cycle perhaps even in June,” said Quincy Krosby, Chief Global Strategist for LPL Financial.
She added, “What could help underpin a move in June or July, however, is that Owners Equivalent Rent (OER) has begun to tick lower, and given its heavy weighting in the CPI a continued downward trajectory by June or July could certainly assuage Fed concerns regarding inflation remaining stubbornly higher.”
The Labor Department is scheduled to release a separate report on Thursday on producer price inflation in the month of February.
Sector News
Software stocks are seeing substantial strength on the day, resulting in a 2.1 percent surge by the Dow Jones U.S. Software Index.
Oracle (ORCL) has led the sector higher, soaring by 11.1 percent after reporting better than expected fiscal third quarter earnings and strong cloud revenue growth.
Considerable strength has also emerged among retail stocks, as reflected by the 1.6 percent gain being posted by the Dow Jones U.S. Retail Index.
Computer hardware and software stocks are also seeing notable strength, contributing to the jump by the tech-heavy Nasdaq.
On the other hand, gold stocks are moving sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 2.3 percent.
Significant weakness is also visible among airline stocks, resulting in a 1.9 percent slump by the NYSE Arca Airline Index.
Shares of Southwest Airlines (LUV) have plummeted by 14.8 percent after the airline said it is “reevaluating all prior full year 2024 guidance, including the expectation for capital spending” due to aircraft delivery delays by Boeing (BA).
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Tuesday. Hong Kong’s Hang Seng Index soared by 3.1 percent, while Japan’s Nikkei 225 Index edged down by 0.1 percent and China’s Shanghai Composite Index dipped by 0.4 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has jumped by 1.1 percent, the German DAX Index is up by 0.6 percent and the French CAC 40 Index is up by 0.4 percent.
In the bond market, treasuries have moved lower over the course of the session after seeing early volatility. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 4.141 percent.
Business News
U.S. Stocks Move Notably Higher After Early Volatility
2024-03-12 14:52:28
