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U.S. Stocks Fluctuate But Manage To Close Modestly Higher

wallstreet july26 12jan22 lt

Stocks fluctuated after an early move to the upside on Wednesday but managed to finish the session modestly higher. The tech-heavy Nasdaq closed higher for the third straight day after hitting a nearly three-month intraday low on Monday.

The major averages closed well off their highs of the session but still in positive territory. The Dow inched up 38.30 points or 0.1 percent to 36,290.32, the Nasdaq edged up 34.94 points or 0.2 percent to 15,188.39 and the S&P 500 rose 13.28 points or 0.3 percent to 4,726.35.

The modest strength on Wall Street came following the release of the Labor Department's highly anticipated report on consumer price inflation in December.

While the report showed the annual rate of consumer price growth once again reached the highest level in almost 40 years, traders seemed relieved the acceleration was not even more significant.

The report showed the annual rate of consumer price growth accelerated to 7.0 percent in December from 6.8 percent in November, showing the biggest yearly jump since June of 1982.

Core consumer prices, which exclude food and energy prices, were up by 5.5 percent year-over-year in December compared to the 4.9 percent spike in November. The annual growth reflected the biggest surge since February of 1991.

The continued acceleration in the annual rate of consumer price growth came as prices increased by slightly more than expected on a monthly basis, although the pace of growth slowed from November.

Treasury yields moved to the downside following the release of the report, offsetting some of the interest rate concerns that dragged the markets lower to start the year.

Sector News

Steel stocks moved sharply following data showing easing Chinese inflation, with the NYSE Arca Steel Index spiking by 2.9 percent to its best closing level in almost four months.

Significant strength also emerged among gold stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Gold Bugs Index.

The strength in the gold sector came as the price of gold for February delivery climbed $8.80 to $1,827.30 an ounce amid a decrease in the value of the U.S. dollar.

Natural gas stocks also moved notably higher amid a surge in the price of the commodity, driving the NYSE Arca Natural Gas Index up by 1.5 percent.

On the other hand, a steep drop by Biogen (BIIB) weighed on the biotechnology sector, dragging the NYSE Arca Biotechnology Index by 1.4 percent.

Biogen came under pressure after Medicare said it would only cover treatment with the biotechnology company's Alzheimer's treatment Aduhelm if patients were enrolled in a clinical trial.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Wednesday. Japan's Nikkei 225 Index jumped by 1.9 percent, while Hong Kong's Hang Seng Index spiked by 2.8 percent.

The major European markets also moved to the upside on the day. While the German DAX Index rose by 0.6 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.8 percent.

In the bond market, treasuries extended the rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.1 basis points to 1.725 percent.

Looking Ahead

Reports on weekly jobless claims and producer price inflation may attract attention on Thursday along with a Senate Banking Committee hearing on Lael Brainard's nomination to be Federal Reserve Vice Chair.

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