U.S. Stocks Edge Higher on Economic Data
March 13 2019 - 10:24AM
Dow Jones News
By Avantika Chilkoti
U.S. stocks edged higher Wednesday, lifted by fresh signs of
stability in the manufacturing sector and muted inflation.
The Dow Jones Industrial Average climbed 100 points, or 0.4%, to
25654 shortly after the opening bell. The S&P 500 added 0.3%
and was on track for a third consecutive advance. The benchmark
equity gauge has climbed near a four-month high after falling in
every session last week. The tech-heavy Nasdaq Composite rose
0.4%.
Renewed faith in U.S. economic growth and a patient approach by
the Federal Reserve regarding interest-rate increases have powered
this year's stock rebound, pushing the S&P 500 up 11% for the
year entering Wednesday's session and within 4.8% of its September
record.
Data Wednesday showed demand for long-lasting goods produced by
U.S. factories rose in January for the third consecutive month, a
sign of momentum for manufacturers.
And producer prices edged higher last month, the latest sign
that underlying inflation pressures remain tepid and a positive
development for investors hoping contained inflation will prevent
the Fed from raising rates this year.
Bond yields stabilized after the data, with the yield on the
benchmark 10-year U.S. Treasury note climbing to 2.618%, according
to Tradeweb, from 2.605% a day earlier. Yields rise as prices fall.
They had dropped to a two-month low following Friday's
weaker-than-expected hiring data.
Boeing shares also rebounded Wednesday, supporting the Dow
industrials after the largest component in the price-weighted index
tumbled to start the week. Several countries have suspended flights
of the Boeing 737 MAX after the model was involved in a second
deadly crash in less than five months on Sunday. The stock inched
up 0.5% Wednesday.
Shares of the aerospace company are still up 17% for the year
despite their recent slide, part of a resurgence in cyclical stocks
often tied to sentiment toward economic growth.
Some analysts remain concerned that slow economic activity
overseas could ripple to the U.S. as trade talks between the U.S.
and China continue. After the European Central Bank slashed its
2019 eurozone growth forecasts last week while unveiling new
stimulus measures, uncertainty about the U.K.'s departure from the
European Union has swung markets in recent days.
British lawmakers rejected a Brexit deal Tuesday, and the U.K.'s
parliament was set to vote Wednesday on whether they want to leave
the EU without a divorce deal. The U.K. also cut its forecasts for
2019 economic growth Wednesday to 1.2% from 1.6%.
"The questions surrounding China, the strength of the economy,
the Chinese trade wars and Brexit all combined is particularly
sensitive for Europe," said David Slater, a portfolio manager at
London hedge fund Trium Capital.
The British pound trimmed some of its recent slide against the
dollar Wednesday, and the U.K.'s FTSE 100 index edged higher.
The Stoxx Europe 600 inched up 0.4%.
Asian stocks were mostly lower, with the Shanghai Composite down
1.1%, Hong Kong's Hang Seng Index dipping 0.4% and Japan's Nikkei
dropping 1%.
-- Amrith Ramkumar contributed to this article.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
March 13, 2019 10:09 ET (14:09 GMT)
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