Stocks rise as in­vestors shake off in­fla­tion fears

Dayton Daily News - - BUSINESS - By Mar­ley Jay

In­vestors saw some NEW YORK — new hints that in­fla­tion is in­creas­ing on Wed­nes­day, but they still sent banks, tech­nol­ogy firms, and con­sumer-fo­cused com­pa­nies climb­ing. That was a big change af­ter the mar­ket’s in­fla­tion-in­spired plunge ear­lier this month.

Af­ter a shaky start, stocks rose for the fourth straight day, and banks made some of the largest gains as bond yields reached new four-year highs. The move in yields came af­ter the govern­ment said con­sumer prices climbed in Jan­uary a slightly faster pace than econ­o­mists had ex­pected. A dif­fer­ent govern­ment re­port showed re­tail sales were un­changed in De­cem­ber and slipped last month.

“I think the fears of the econ­omy over­heat­ing have been a lit­tle bit bal­anced out with the com­bi­na­tion of these two num­bers,” said Katie Nixon, chief in­vest­ment of­fi­cer for North­ern Trust Wealth Man­age­ment. “The bond mar­ket is not sug­gest­ing that ru­n­away in­fla­tion is a deep con­cern.”

Stocks be­gan plung­ing Feb. 1 af­ter the La­bor Depart­ment said wages grew at a rapid clip in Jan­uary. In­vestors wor­ried that that meant in­fla­tion was ris­ing and that it would push the Fed­eral Re­serve to start rais­ing in­ter­est rates more quickly, mak­ing it more ex­pen­sive for peo­ple and busi­nesses to bor­row money. That would slow down eco­nomic growth as well growth in as cor­po­rate prof­its.

The Stan­dard & Poor’s 500 in­dex rose 35.69 points, or 1.3 per­cent, to 2,698.63. The Dow Jones in­dus­trial av­er­age added 253.04 points, or 1 per­cent, to 24,893.49. The Nas­daq com­pos­ite climbed 130.10 points, or 1.9 per­cent, to 7,143.62. The Rus­sell 2000 in­dex of smaller-com­pany stocks rose 27.15 points, or 1.8 per­cent, to 1,522.10.

The yield on the 10-year Trea­sury note rose to 2.91 per­cent, its high­est mark in four years, from 2.84 per­cent a day ear­lier.

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