Stocks finish mixed after inflation report
NEW YORK – Wall Street churned to a mixed finish on Wednesday after a highly anticipated report showed inflation accelerated across the country last month, but not by much more than expected.
The S&P 500 edged up by 5.54 points, or 0.1%, to 4,467.44 after flipping between small gains and losses a few times through the day. The Dow Jones Industrial Average dropped 70.46 points, or 0.2%, to 34,575.53, and the Nasdaq composite rose 39.97, or 0.3%, to 13,813.59. The Russell 2000 index of smaller companies fell 14.48 points, or 0.8% to 1,840.84.
The modest moves followed a shaky immediate reaction to the inflation report across financial markets, where bond yields and stock prices swung back and forth several times.
The report said U.S. consumers paid prices last month that were 3.7% higher than a year earlier, up from July’s inflation rate of 3.2%.
That’s discouraging for shoppers paying higher prices, but much of the acceleration was because of higher fuel costs, which swing sharply and quickly. Ignoring those, underlying inflation trends still look to be pointing toward continued moderation, economists said. Inflation has been generally cooling since peaking above 9% last year.
The report said that prices paid by U.S. consumers rose 0.3% in August from July, after ignoring costs for food, gasoline and other energy prices that can swing quickly. That was a touch faster than the 0.2% monthover-month inflation rate that economists expected.
The inflation report was so highly anticipated because it will help steer what the Federal Reserve does next on interest rates.
The Fed has already hiked its main rate to the highest level in more than two decades, and the hope on Wall Street is that inflation has cooled enough for it to be done.
Stocks of airlines were some of the biggest losers in the S&P 500 after a couple warned that higher costs are hitting profits.
American Airlines cut its forecast for profits during the summer because fuel costs are running higher than it expected. It also had to pay about $230 million in retroactive pay to pilots after they ratified a new labor contract. Its stock fell 5.7%.
Spirit Airlines said it’s also paying higher fuel costs this summer than expected, roughly $3.06 per gallon instead of the $2.80 it had earlier forecast. It’s also been seeing steep discounting to fares during the last few weeks. That pushed it to cut its forecast for revenue during the third quarter, and its stock fell 6.3%.
Other airlines also sank, including declines of 3.8% for United Airlines and 2.8% for Delta Air Lines.
On the winning end of Wall Street were high-growth stocks that could be big beneficiaries if the Fed is indeed done hiking interest rates.
Amazon climbed 2.6%. Microsoft gained 1.3%, and Nvidia rose 1.4%.
Gold for December delivery fell $2.60 to $1,932.50 an ounce. Silver for December delivery fell 22 cents to $23.18 an ounce. December copper was unchanged at $3.79 a pound.
The dollar rose to 147.46 Japanese yen from 147.10 yen. It was unchanged at $1.0732 against the euro.