Stock market today: Wall Street rallies to a record as Big Tech stocks renew their run
By Stan Choe, The Associated Press on March 12, 2024.
NEW YORK (AP) – Stocks rallied to records after some influential Big Tech companies got back in their groove. The S&P 500 rose 1.1% Tuesday to top its all-time high set last week. The Dow Jones Industrial Average gained 0.6%, and the Nasdaq composite jumped 1.5%. All three indexes started the day with losses after a highly anticipated report showed inflation was worse than expected. Treasury yields rose. But the inflation figures weren’t far off expectations, and traders still hope the Federal Reserve will begin cutting interest rates in June. Nvidia rose to break out of its mini-losing streak, and Oracle jumped after reporting stronger profit than expected. THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. NEW YORK (AP) – U.S. stocks are rallying toward records Tuesday following the latest update on inflation, as some influential Big Tech stocks get back in the groove. The S&P 500 was 1.1% higher in afternoon trading and on track to top its all-time high set last week. The Dow Jones Industrial Average was up 288 points, or 0.7%, with roughly an hour remaining in trading, and the Nasdaq composite was 1.4% higher after all three indexes erased earlier losses. The highly anticipated inflation report said prices paid by U.S. consumers rose a bit more last month than economists expected. It kept the door closed on hopes that the Federal Reserve could deliver the cuts to interest rates that Wall Street craves at its next meeting next week. But the inflation figures were still close to expectations, and traders were holding onto hopes that the longer-term trend downward will keep the Fed on track to cut its main interest rate in June. Plus, inflation may not be as hot in reality as the morning’s report suggested. “January and February are notoriously noisy months for a lot of economic data,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The Fed wasn’t planning on cutting rates next week, and this report doesn’t change that. The discussion around the table will be more about the longer-term trend.” The fear is “sticky” inflation that refuses to go down will force the Fed to keep interest rates high, which grinds down on the economy and investment prices. “Another hotter-than-expected CPI reading may breathe new life into the sticky inflation narrative, but whether it actually delays rate cuts is a different story,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. For months, traders on Wall Street have been trying to get ahead of the Federal Reserve and guess when cuts to rates will arrive. They have already sent stock prices higher and bond yields lower in anticipation of it. Through it all, the Fed has remained “nothing if not consistent in doing what it said it would do,” Larkin said. “Until they say otherwise, their plan is to cut rate cuts in the second half of the year.” The immediate reaction across financial markets to the inflation data was halting and uncertain. In the bond market, Treasury yields initially dropped and then swung higher. The yield on the 10-year Treasury eventually rose to 4.15% from 4.10% late Monday. The price of gold, which has shot to records on expectations for coming rate cuts, also swung. An ounce for delivery in April fell $22.50 to settle at $2,166.10. A measure of nervousness among U.S. stock investors eased roughly 8% after squiggling up and down a few times. On Wall Street, Big Tech stocks were doing the heaviest lifting. Oracle jumped 11.9% after reporting stronger profit for the latest quarter than analysts expected. Nvidia also rallied 5.4% following a rare two-day stumble in what’s been a rocket ride amid Wall Street’s frenzy around artificial-intelligence technology. The company’s stock has grown into one of the market’s most influential because of its sudden swelling in size, and it was the single strongest force pushing the S&P 500 upward. New York Community Bancorp rose 3.8% after it said it closed its previously announced deal to raise roughly $1.05 billion in cash from the sale of stock. The bank has been struggling under the weight of falling prices for commercial real estate and the growing pains associated with prior acquisitions it made. Its troubles have also led to worries about trouble for the broader regional banking industry. 3M climbed 4.6% after it said Bill Brown, the former chairman and CEO of L3Harris Technologies, will take over as its CEO at the start of May. On the losing end of Wall Street was Southwest Airlines. It dropped 15.4% after cutting its forecast for an important measure of revenue in the first three months of this year, partially because of lower-than-expected flying by some leisure travelers. It also said Boeing told the company that it will deliver fewer airplanes than expected this year. Shares of Boeing, which is facing criticism over its safety and manufacturing quality, sank 475%. In stock markets abroad, Japan’s Nikkei 225 slipped 0.1% to retreat further from its recent records. Expectations are building that its central bank will raise interest rates, which are below zero. Indexes jumped 3.1% in Hong Kong, 1.2% in Frankfurt and 1% in London but moved more modestly elsewhere across Asia and Europe. ___ AP Business Writers Elaine Kurtenbach and Matt Ott contributed. 26-25
