Tame US inflation boosts S&P 500, Nasdaq rallies above 20,000
S&P 500, Nasdaq gain; Dow drops
Tesla shares hit record high
Healthcare stocks tank after bipartisan bill
Updates to 4 PM ET
By Chibuike Oguh, Purvi Agarwal and Shashwat Chauhan
NEW YORK, Dec 11 (Reuters) - WallStreet's benchmark S&P 500 index roseon Wednesday anda rally in tech stocks lifted the Nasdaq above the 20,000-point milestone for the first time, after a U.S. inflation report boosted expectations of a Federal Reserve interest rate cut.
The Dow Jones Industrial Average dipped, dragged by health insurers as U.S. lawmakers introduced a bill seen as crimping their profits.
A Labor Department report showed U.S. consumer prices in November increased by the most in seven months, though broadly in line with market expectations.
According to preliminary data, the S&P 500 .SPX gained 49.21 points, or 0.82%, to end at 6,084.12 points, while the Nasdaq Composite .IXIC gained 347.66 points, or 1.77%, to 20,034.90. The Dow Jones Industrial Average .DJI fell 94.48 points, or 0.21%, to 44,153.35.
"Nasdaq is rallying on the prospect of a rate cut next week and has room to move higher," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Markets are pricing in more than a 96% chance the Fed will cut rates by 25 basis points next week, up from 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.
The yield on benchmark U.S. 10-year notes US10YT=RR rose 5.2 basis points to 4.267%.
"The equity market seems to be breathing a sigh of relief that this is another steady-as-she-goes report," said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. "There's no surprises. It seems the equity market was braced for a higher than expected number."
Tesla TSLA.O shares climbed to a record high as the electric vehicle maker extended a rally in the wake of the U.S. presidential election.
Nvidia NVDA.O and other megacap growth stocks, including Alphabet GOOGL.O and Amazon AMZN.O, also finished higher.
Pharmacy benefit managers, including Cigna CI.N, CVS Health CVS.N, and UnitedHealth Group UNH.N, lost ground after a bipartisan group of lawmakers introduced a bill that would force health insurers or drug middlemen to divest their pharmacy businesses.
GameStop GME.N gained after the videogame retailer reported a profit for the third quarter on cost-saving efforts.
Broadcom AVGO.O jumped following a report that Apple AAPL.O is working with the company to develop its first server chip specially designed for artificial intelligence.
Macy's M.N shed after the department-store bellwether cut its annual profit forecast as persistent weakness in demand clouded its expectations for the holiday shopping season.
Reporting by Chibuike Oguh in New York and Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva, Maju Samuel and David Gregorio
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
