Dow Today – US STOCKS-Wall St gains as investors ‘buy the dip’ on upbeat jobs data
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* Energy stocks fall as oil declines over 3%
* Tesla dips as Musk rejects bitcoin
* Transports, chips, small caps outperform
* Indexes up: Dow 1.38%, S&P 1.27%, Nasdaq 0.7% (Updates to late afternoon, changes dateline, byline)
NEW YORK, May 13 (Reuters) – Wall Street advanced in a broad rally on Thursday, bouncing back from three straight days of selling as upbeat labor market data prompted investors to buy shares that stand to gain most from economic revival.
Meanwhile, cyclical shares enjoyed the biggest gains.
“It speaks to how many investors have been trained to buy the dip,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “And they’re taking the Fed at face value that they’re not going to raise rates anytime soon and inflation pressures are transitory.”
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.
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.
“The economy is going to continue to reopen so things like transports, industrials and financials are going to feel the effects of the reopening first,” Pavlik added.
New applications for unemployment insurance continue to fall, according to jobless claims data from the Labor Department that hit a 14-month low.
Further data from the Labor Department showed producer prices surged last month, building on the inflation surge narrative of Wednesday’s consumer prices report.
But rising prices were widely anticipated, and the U.S. Federal Reserve has repeatedly stated that it does not foresee those spikes morphing into sustained, long-term inflation.
Of the 11 major sectors in the S&P 500, 10 were green, with technology shares once again enjoying the largest percentage gain.
Energy stocks, weighed by a drop in crude prices was the sole loser.
Dating app owner Bumble Inc tumbled 15.5%, falling below its initial public offering price, as investors remained cautious about how quickly users will return to in-person meetings.
Shares of Walt Disney Co shares were down 0.2% ahead of its quarterly results expected after the closing bell.
Boeing Co was modestly higher after gaining approval from U.S. regulators for a fix of an electrical grounding issue.
Tesla continued its slide, dropping 2.9% after boss Elon Musk doubled down on his sudden rejection of cryptocurrency bitcoin.
The S&P 500 posted nine new 52-week highs and no new lows; the Nasdaq Composite recorded 31 new highs and 180 new lows.
Reporting by Stephen Culp Additional reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Lisa Shumaker