Nasdaq hits all-time high as growth stocks rise; inflation data weighs heavily

July 13 (Reuters) – The Nasdaq index reversed early declines to an all-time high on Tuesday, helped by a rise in growth-linked large-cap stocks and as the earnings season started on a positive note, while that a solid rise in consumer prices in June weighed on sentiment.

A Department of Labor report showed consumer prices in the United States rose the most in 13 years last month due to supply constraints and a continued rebound in the costs of travel-related services, while that the core CPI jumped 4.5% year-on-year. , the largest increase since November 1991, following a 3.8% increase in May. Read more

“The CPI numbers have shocking value for sure,” said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia.

“However, once you realize that a third of the increase is from used car prices, the transient picture becomes clearer… inflation is rising, but things are behaving well and have not changed. noticeably. “

Inflation and positive economic data have driven Wall Street’s move since mid-June, with investors worried that an overheating economy amid a faster reopening would force the Federal Reserve to ease monetary policies further. sooner than expected.

Nine of the 11 major sector indices of the S&P 500 were trading lower, with the defensive real estate (.SPLRCR) and utilities (.SPLRCU) sectors leading the declines.

Major banks, including JPMorgan Chase & Co (JPM.N) and Goldman Sachs Group Inc (GS.N) reported quarterly profits exceeding expectations. Goldman Sachs shares fell 0.4%, while JPMorgan slipped 0.7% due to a well-signaled slowdown from record trading results last year. Read more

The S&P 500 Banks Index (.SPXBK) fell 0.8%, while the Financial Services Index (.SPSY) fell 0.5%.

PepsiCo Inc (PEP.O) gained 1.8% after raising its full-year profit forecast, betting on accelerating demand for its sodas in theaters, restaurants and stadiums as restrictions COVID-19 continue to ease. Read more

“When you look at the results, these banks had spectacular numbers,” said Peter Cardillo, chief markets economist at Spartan Capital Securities in New York.

“I think further and further into the earnings season, if we continue to deliver good results like what we saw for the first quarter, that will provide a cushion for the market.”

June quarter earnings per share for S&P 500 companies set to rise 66%, Refinitiv data shows, as market participants question how long the Wall Street rally would last after rising nearly 16.7 % of the benchmark so far this year.

The tech sector of the S&P 500 (.SPLRCT) rose 0.3%, thanks to a boost from heavyweights like Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O).

At 10:12 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 50.34 points, or 0.14%, to 34,945.84, the S&P 500 (.SPX) was down 1.57 point, or 0.04%, to 4,383.06, and the Nasdaq Composite (.IXIC) gained 17.86 points, or 0.12%, to 14,751.10.

Boeing Co (BA.N) fell 3.0% after the Federal Aviation Administration said Monday night that some undelivered 787 Dreamliners had a new build quality issue. Read more

Conagra Brands Inc (CAG.N) fell 3.9% after the packaged food company lowered its full-year profit and margin forecast. Read more

Falling issues outnumbered advances for a 2.15-to-1 ratio on the NYSE and a 2.74-to-1 ratio on the Nasdaq.

The S&P Index recorded 25 new 52-week highs and no new lows, while the Nasdaq recorded 33 new highs and 23 new lows.

Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.