Wall Street Indexes Jumped After Benign Wholesale Inflation Report

Barry Adams
13 Aug, 2024
New York City

Stocks advanced in a broad rally as investors bid up stocks after the release of the producer price inflation report. 

The S&P 500 index gained 0.7% and the Nasdaq Composite jumped 1.4% as investors kept hopes of a rate cut alive after producer price inflation slowed in July. 

Factory gate prices rose 0.1% on the month in July, slower than the 0.2% rise in June, and core PPI was unchanged from the prior month, the U.S. Bureau of Labor Statistics reported Tuesday. 

On an annual basis, producer price inflation rose at a slower pace of 2.2% from an upwardly revised 2.7% in June. 

A softer increase in producer prices also raised hopes that consumer price inflation, scheduled to be released on Wednesday, will also rise at a slower pace of 0.2% from the previous month in July and 3% from a year ago. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index gained 0.7% to 5,386.57, the Nasdaq Composite advanced 1.4% to 17,014.70, and the Russell 2000 index increased 0.8% to 2,079.04. 

The yield on 2-year Treasury notes edged lower to 3.98%, 10-year Treasury notes increased to 3.98%, and 30-year Treasury bonds inched lower to 4.19%.

WTI crude oil decreased $0.28 to $79.76 a barrel, and natural gas prices edged up 2 cents to $2.20 a thermal unit.

Gold increased by $9.09 to $2,466.54 an ounce, and silver decreased by $0.31 to $27.69. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.01.

 

U.S. Stock Movers 

Starbucks surged 16% to $89.47 after the coffee chain announced a surprise CEO change, replacing Laxman Narasimhan with Brian Niccol, the current CEO of Chipotle Mexican Grill. 

Laxman was forced out by the company under mounting pressure from activist investors Starboard Value and Elliott Investment. 

Chipotle Mexican Grill dropped 8.6% to $51.06. 

Home Depot dropped 1.5% to $340.43, and the home improvement retailer estimated a larger comparable same-store sales decline in 2024. 

The retailer estimated comparable sales to fall between 3% and 4% from the previous estimate of a 1% decline. 

Total revenue is expected to rise between 2.5% and 3.5%, higher than the previous estimate of a 1% increase.

Super Micro Computer increased 2.9% to $555.91 and extended its two-day gains to 10%. 

The server and data storage company plunged 20% after reporting weaker-than-expected quarterly earnings, but sales were ahead of market expectations. 

ON Holding AG decreased 0.5% to $39.35, and the Swiss athletic apparel and accessories company reported better-than-expected revenue in the second quarter, but earnings per share missed analyst expectations. 

Revenue increased 28% to CHF 567.7 million, income increased eightfold to CHF 30.8 million from CHF 3.3 million, and basic earnings per share soared to 10 Swiss cents from 1 cent a year ago.