U.S. Major Averages Advance After PPI Inflation Slows In August

Barry Adams
12 Sep, 2024
New York City

U.S. stocks advanced, and tech stocks continued to lead gainers for the second day in a row on Wall Street. 

The S&P 500 index inched up 0.01%, and the Nasdaq Composite advanced 0.2%. 

Producer price inflation, a measure of wholesale inflation, advanced 0.2% from the previous month in August, the U.S. Bureau of Labor Statistics reported Thursday. 

The rebound in services inflation contributed to the rise from the downwardly revised flat reading in July. 

On an annual basis, producer price inflation slowed for the second consecutive month to 1.7% from 2.1% in July. 

On Wednesday, investors reviewed that August's consumer price inflation slowed to 2.5%, but the core rate of inflation held steady at 2.8%, highlighting well-entrenched service inflation in the broader economy. 

After the release of two inflations, investors dialed down aggressive rate cut expectations of as much as 50% but still held out for a 25 basis rate cut at the end of the two-day meeting on September 18. 

Separately, the European Central Bank lowered its key lending rate by 25 basis points for the second time since June, but cited elevated wage pressures as contributing to inflationary pressures. 

Initial jobless claims inched higher and stayed well above the weekly average seen earlier in the year. 

Initial jobless claims increased 2,000 from the previous week to 230,000 in the week ending September 7. 

Meanwhile, continuing claims, which lag initial claims by one week, rose 5,000 to 1.85 million. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.3% to 5,486.63, the Nasdaq Composite eased 0.4% to 16,960.21, and the Russell 2000 index fell 0.1% to 2,095.90. 

The yield on 2-year Treasury notes edged higher to 3.67%, 10-year Treasury notes inched up to 3.67%, and 30-year Treasury bonds inched lower to 3.98%.

WTI crude oil increased $0.92 to $68.22 a barrel, and natural gas prices edged up 1 cent to $2.22 a thermal unit.

Gold rose by $9.06 to $2,520.92 an ounce, and silver increased by $0.13 to $28.80.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.73.

 

U.S. Stock Movers

Alaska Air Group declined 0.3% to $39.37, and the regional airline lifted its third quarter profit outlook citing strong demand in the summer travel season. 

The company estimated earnings per share to range between $2.15 and $2.25, compared to its previous estimate between $1.40 and $1.60. 

Oxford Industries dropped 3.3% to $80.95 after the parent company of retailer Tommy Bahama reported weaker-than-expected quarterly results. 

Revenue in the quarter edged slightly lower to $419.9 million from $420.1 million, net income dropped to $40.6 million from $51.4 million, and diluted earnings per share eased to $2.57 from $3.22 a year earlier. 

The company declared a cash dividend of 67 cents per share, an increase from 65 cents a year ago. 

The company also tightened its fiscal year revenue to range between $1.51 billion and $1.54 billion, compared to $1.57 billion in the fiscal year 2023. 

The retailer also estimated GAAP earnings per share in the current fiscal year to range between $6.28 and $6.58, compared to $3.82 in the previous fiscal year.

Moderna plunged 18.1% to $65.11 after the drug company announced its plans to slash its expenses by $1.1 billion by 2027. 

The biotech company said it is shifting its priorities after the COVID-19 pandemic and deprioritizing certain drugs, but still anticipates the release of 10 new drugs over the next three years.