S&P, Nasdaq advance after inflation data solidifies Dec rate-cut hopes
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Indexes: Dow off 0.02%, S&P 500 up 0.77%, Nasdaq up 1.48%
Updates with mid-session trading
By Purvi Agarwal and Shashwat Chauhan
Dec 11 (Reuters) - The S&P 500 and the Nasdaq climbedon Wednesday after the latest inflation data bolstered bets on theFederal Reserve cutting interest rates later this month, while the Dow was pressured by declines in UnitedHealth.
A Labor Department report showed U.S. consumer prices increased by the most in seven months in November, though broadly in line with market expectations.
"There were some fears that you could have had an upside surprise to inflation and that may have made the Fed rethink cutting next week," said Tom Bruce, macro investment strategist, Tanglewood Total Wealth Management.
"With it coming in line with expectations, it clears a way for a 25 bps cut in next week's meeting."
Bets on the Fed cutting 25 basis point cut next week jumped to over 96%, compared with an 86% chance before the data, according to CME's FedWatch Tool. Bets had risen following Friday's employment report, which showed an uptick in unemployment alongside a surge in job growth.
Also expected this week is a producer prices reading on Thursday.
Yields on U.S. government bonds were choppy ahead of an auction of 10-year notes US10YT=RR worth $39 billion later in the day. It was last at 4.2458%. [US/]
At 11:26 a.m. ET, the Dow Jones Industrial Average .DJI fell 9.26 points, or 0.02%, to 44,238.61, the S&P 500 .SPX gained 46.31 points, or 0.77%, to 6,081.22 and the Nasdaq Composite .IXIC gained 291.54 points, or 1.48%, to 19,978.78.
Eight of the 11 major S&P sub-sectors were trading higher, with consumer discretionary .SPLRCD rising 1.6%, while communication services .SPLRCL added 2.2%.
Most megacap and growth stocks were higher, with Alphabet GOOGL.O up 3.3% and Tesla TSLA.O gaining 3.2%.
On the flip side, the blue-chip Dow was weighed down by a 5.2% decline in UnitedHealth UNH.N.
Despite running into some turbulence earlier this week, both the S&P 500 and the Nasdaq are hovering near their all-time highs, as investors bought into heavyweight technology stocks all through the year in a bid to catch up with the artificial intelligence hype.
Another tailwind for equities was former President Donald Trump's victory in the presidential election in November, as analysts believe his policies on lower corporate taxes and eased regulation could boost corporate performance.
Among other movers, GameStop GME.N gained 8.8% after the videogame retailer reported a profit for the third quarter on cost-saving efforts.
Broadcom AVGO.O jumped 5.7% following a report that Apple AAPL.O is developing its first server chip specially designed for artificial intelligence with the company.
Macy's M.N slumped 5.6% after the department-store bellwether cut its annual profit forecast as persistent weakness in demand clouded its expectations for the holiday shopping season.
Match Group MTCH.O dipped 6.4% as it said it wouldreport fourth-quarter revenue below its previous forecast due to a larger-than-anticipated impact from currency exchange rates.
Advancing issues outnumbered decliners by a 1.31-to-1 ratio on the NYSE and by a 1.01-to-1 ratio on the Nasdaq.
The S&P 500 posted 20 new 52-week highs and six new lows, while the Nasdaq Composite recorded 74 new highs and 83 new lows.
Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva and Maju Samuel
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