Dow Rallies 600 Points After Encouraging Inflation Report, Strong Bank Earnings
Stocks surged on Wednesday after the latest consumer price index report showed core inflation unexpectedly slowed in December, and major U.S. banks kicked off quarterly earnings reporting season with blowout results.
The Dow Jones Industrial Average traded 609 points higher, or 1.4%. The S&P 500 climbed 1.5%, and the Nasdaq Composite rallied 2%.
December’s consumer price index showed that core inflation, which excludes food and energy, rose 3.2%, the Bureau of Labor Statistics reported Wednesday. This was a notch down from the previous month and lower than the 3.3% estimated by economists surveyed by Dow Jones. Headline inflation increased 2.9% on a 12-month basis, in line with forecasts.
“The market [is] breathing a sigh of relief as back-to-back inflation gauges, PPI yesterday and CPI this morning, came in slightly below expectations,” said John Kerschner, head of U.S. securitized products and portfolio manager at Janus Henderson Investors. “Perhaps most importantly, today’s CPI number takes additional rate hikes off the table, which some market participants were beginning to prematurely price in.”
Source : CNBC
