Investors Bid Up Stocks On Softer but Elevated Inflation Reports

Barry Adams
11 Aug, 2022
New York City

Stocks extend gains on Wall Street after wholesale prices declined in July following the slight cooling in consumer prices. 

The Producer Prices index declined 0.5% in July and the index excluding volatile food and energy prices also eased. 

The surprise decline in wholesale prices followed the slight cooling of consumer prices to 8.5% reported on Wednesday.

The back-to-back two inflation reports lifted the hopes that the Federal Reserve may moderate the rate hikes at the next meeting in late September.  

The yield on 10-year U.S. Treasury notes increased to 2.84% and 2-year notes rose to 3.21%. 

The average price of a gallon of gasoline declined to $3.99 on Thursday, the Automobile Association of America reported. 

The average price peaked at $5.02 per gallon in June and the national average has not fallen below $4 a gallon since March 5. 

Futures of crude oil prices rose $2.75 to $94.68 a barrel and natural gas rose 30 cents to $8.61 a thermal unit.  

The S&P 500 index increased 0.3% to 4,227.53 and the Nasdaq Composite index was nearly unchanged at 12,848.13. 

Tech stocks led the gainers for the second day in a row. 

Apple, Amazon, Meta, Alphabet, and Meta traded in the positive. 

Six Flags Entertainment Corp plunged 22% to $20.31 after the operator of the amusement park said attendance in the quarter dropped 22% to 6.7 million from 8.5 million a year ago.  

Second quarter revenues declined 5% to $435 million from $460 million a year ago. Net income in the period plunged 36% to $45 million from $71 million a year ago. 

Total guest spending per person increased 23% to $63.87 from $51.94 a year ago. 

Walt Disney Company increased 5.7% to $118.95 after the media and theme park operator reported better-than-expected revenues and earnings on the stronger attendance at parks. 

Disney said revenues in the fiscal third quarter ending on July 2 rose 26% to $21.5 billion from $17 billion a year ago. 

Net income in the quarter rose 53% to $1.41 billion or 77 cents a diluted share from $923 million or 50 cents a diluted share.

The average monthly revenue per paid subscriber for domestic Disney+ decreased from $6.62 to $6.27 due to a higher mix of subscribers to multi-product offerings, partially offset by an increase in retail pricing.

Free cash flow in the quarter declined to $187 million from $528 million a year ago on higher capital expenditures in parks and resorts. 

Sonos Inc declined 25% to $17.06 after the maker of high-end speakers said revenues in the fiscal third quarter ending on July 2 edged down 2% to $371 million. 

In the period, the company swung to a loss of $0.5 million from a profit of $17.8 million a year ago. 

The company lowered its fiscal year 2022 revenue outlook to a new range between $1.730 billion and $1.755 billion, representing growth of 1% to 2% from fiscal 2021, or growth of 4% to 5% on a constant currency basis. 

This compares to a prior outlook range between $1.95 billion and $2.0 billion, which represented growth of 14% to 16% from fiscal year 2021.