US Stocks Bounce Back From Recent Selloff

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2021-05-14 HKT 04:25

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  • All three major US stock indexes notched solid gains. File photo: Shutterstock

    All three major US stock indexes notched solid gains. File photo: Shutterstock

Wall Street ended sharply higher at the close of a broad rally on Thursday, bouncing back from three straight days of selling on upbeat labor market data.

All three major US stock indexes notched solid gains, with the Nasdaq, weighed by Tesla, bringing up the rear.

Meanwhile, cyclical shares enjoyed the biggest gains.

Recent economic data has prompted inflation fears as scarcity of both materials and workers threatens to send prices surging in the face of a demand boom.

"If this is a footrace, supply chains are still tying their shoes," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "But they will catch up with demand fairly quickly."

But on Thursday, investors appeared to be focusing on the glass-half-full side of the demand/supply equation.

This was evidenced by the outperformance of small caps , chips and transports, economically sensitive stocks that stand to gain as the United States emerges from the pandemic recession.

"Sectors and stocks that were hurt most significantly by yesterday's sell-off rebounded strongly today given that economic growth is expected to remain strong throughout the year and any inflation is likely to be temporary," Carter added.

New applications for unemployment insurance continue to fall, according to jobless claims data from the Labor Department that hit a 14-month low.

Labor Department data also showed producer prices surged last month, building on the inflation surge narrative of Wednesday's consumer prices report.

"The inflation boogeyman is back right on cue," Carter said. "And will continue to spook markets for the coming months."

But rising prices were widely anticipated, and the US Federal Reserve has provided repeated assurances that it does not foresee those spikes morphing into sustained, long-term inflation.

The Dow Jones Industrial Average rose 1.3 percent to finish at 34,021, the S&P 500 gained 1.2 percent to 4,112 and the Nasdaq Composite added 0.7 percent to 13,124.

Energy stocks lost ground, weighed by a drop in crude prices.

Dating app owner Bumble Inc tumbled below its initial public offering price, as investors remained cautious about how quickly users will return to in-person meetings.

Shares of Walt Disney oscillated throughout the session ahead of its quarterly results expected after the closing bell.

Boeing advanced after gaining approval from US regulators for a fix of an electrical grounding issue.

Tesla continued its slide after boss Elon Musk doubled down on his sudden rejection of cryptocurrency bitcoin. (Reuters)

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