S&P 500 and Nasdaq closed the fourth consecutive week on growing optimism

NEW YORK (Reuters) – Wall Street closed higher on Friday as signs that inflation had peaked in July increased investor confidence that a bull market might be underway and prompted the S&P 500 and Nasdaq to announce their fourth consecutive week. gains.

S&P 500 . Index (.SPX) Up 17.7% from a mid-June low, the latest gains came from data this week that showed a slower-than-expected rise in CPI and a surprise drop in producer prices last month.

The S&P 500 crossed a closely watched technical level at 4,231 points, indicating that the benchmark index has regained half of its losses since retreating from an all-time high in January. A 50% retracement for some markets indicates a bullish market. Read more

“It’s really just a number, but it certainly makes investors feel better – at least those who bought near the bottom,” said Tim Greskey, chief investment analyst at Inverness Counsell in New York.

“I won’t declare victory over this bear market just yet. There will likely be some bad news. But there is a very good chance that we have seen the bottom.”

Dow Jones Industrial Average (.DJI) It rose 424.38 points, or 1.27%, to 3,3761.05 points, while the S&P 500 . rose (.SPX) It rose 72.88 points, or 1.73%, to 4,280.15 points, and the Nasdaq Composite (nineteenth) It added 267.27 points, or 2.09%, to 13,047.19 points.

For the week, the S&P 500 is up 3.25%, the Dow is up 2.92% and the Nasdaq is up 3.8%.

Volume on US exchanges was 9.99 billion shares, compared to an average of 11.04 billion shares for the full session over the last 20 trading days.

With the S&P 500 and Nasdaq posting their longest streak of weekly gains since November, analysts noted that the Fed is still on hold as it seeks to tame inflation by aggressively raising interest rates without triggering a recession.

“The markets definitely got good news this week on inflation,” said Des Molarkey, managing director of investment strategy and asset allocation at SLC Management in Boston.

“The win was in some ways misplaced, but it wasn’t ‘mission accomplished’ in any way. We’re still very slow ahead.”

Mularkey said that year-end inflation could slow to 7% or a little less, but bringing core inflation below 4%, twice the Fed’s target, would be harder than markets expect.

Traders are pricing in a less hawkish Fed, with Fed Fund futures showing a 55.5% chance that Fed policymakers will raise interest rates by 50 basis points when they meet in September, instead of 75 basis points. FEDWATCH

The sea was full of green on Wall Street for the second day in a row, with all 11 major S&P 500 sectors up, along with semiconductors. (.sox)Lowercase letters (.rut) dao transportation (.DJT). growth stocks (.IGX) It rose 2.1% while the value (.IVX) advance 1.4%.

Investors bought $7.1 billion in shares in the week through Wednesday, according to a Bank of America note, and US growth stocks posted their biggest weekly outflow since December last year. Read more

Also driving the optimism were data showing that US consumer confidence rose in August from a record low this summer and US households’ expectations for near-term inflation fell again as gasoline prices fell. Read more

After a rough start to the year, better-than-expected second-quarter earnings from Corporate America supported upbeat sentiment in US stocks.

Analysts collectively believe that the S&P 500 posted year-over-year earnings growth of 9.7% in the April-June period, much stronger than the 5.6% expected at the end of the quarter, according to Refinitiv.

Banks (.SPXBK) It rose 1.4% to continue their rally for the sixth consecutive week.

GlobalFoundries (GFS.O) It jumped 11.9% after being added to Buffa Global Research’s “US No. 1 list”.

Advance issues outnumbered declining issues on the New York Stock Exchange by 4.43 to 1; On the Nasdaq, a 2.76 to 1 ratio favored gainers.

The S&P 500 posted five new 52-week highs and 29 new lows; The Nasdaq recorded 78 new highs and 39 new lows.

Covering by Herbert Lash of New York. Additional reporting by Bansari Mayor Kamdar and Aniruda Ghosh in Bengaluru; Editing by Arun Koyor and Matthew Lewis

Our criteria: Thomson Reuters Trust Principles.