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S&P 500 closes at all-time highs as long-term inflation volatility eases

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© Reuters. FILE PHOTO: Morning sun falls on the facade of the New York Stock Exchange (NYSE) building after the trading session begins on Thursday in Manhattan in New York City, New York, the United States, Jan. 28, 2021. REUTERS / Mike Segar / File Photo

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By Stephen Culp

(Reuters) – Wall Street stocks closed higher Thursday, closing above their previous record high of May 7, as economic data appeared to support Federal Reserve claims that the current wave of inflation will only be temporary.

All three major US stock indices rose, with market-leading Megacap stocks putting the Nasdaq at the top. But economically sensitive transports and small caps ended the session in negative territory.

The Department of Labor's Consumer Price Index (CPI) data was above consensus, adding to the debate over whether current price spikes could turn into long-term inflation despite assurances from the Fed to the contrary.

However, a closer look showed that much of the price hike came from items like commodities and airfare, and therefore is likely to be temporary.

"We had extremely boring market days earlier this week as we were all watching the bullseye of this CPI report," said Ryan Detrick, senior market strategist at LPL Financial (NASDAQ 🙂 in Charlotte, NC. "But once people look beneath the surface, most of the higher inflation is due to the reopening, and stocks have seen a rebound rally."

"The market is taking it easy, realizing that the entire economy is not overheating," added Detrick.

A House committee passed a $ 547 billion land infrastructure spending bill and adopted some of President Joe Biden's proposals as part of his broader $ 2.3 trillion infrastructure package.

Still, sectors that could benefit from infrastructure spending ended the session lower. Industry and transportation fell by 0.5% and 0.7%, respectively.

That rose by 19.1 points or 0.06% to 34,466.24; the S&P 500 gained 19.63 points, or 0.47%, to 4,239.18 points; and the added 108.58 points, or 0.78%, at 14,020.33.

Of the 11 major sectors in the S&P 500, healthcare saw the largest percentage increases.

However, interest rate-sensitive financials fell the hardest, falling 1.1% as falling US Treasury yields weighed on the sector.

GameStop Corp. (NYSE :), the stock most closely linked to the social media-fueled "meme-share" phenomenon, fell 27.2% after the video game retailer announced it was selling new shares.

Other stocks that have benefited from the retail short squeeze rally, including Clover Health Investments Corp, AMC Entertainment (NYSE 🙂 Holdings, Bettbad & Beyond Inc (NASDAQ 🙂 and GEO Group also slipped, losing between 8% and 19%.

Pfizer Inc (NYSE 🙂 rose 2.2% as it became known that the United States would pay the drug maker about $ 3.5 billion for 500 million doses of COVID-19 vaccine it plans to donate to the top 100 low-income countries .

Rising issues exceeded the number of declining issues on the NYSE by a ratio of 1.25 to 1; on the Nasdaq favored a ratio of 1.13 to 1 advanced.

The S&P 500 posted 58 new 52-week highs and no new lows; the Nasdaq Composite posted 102 new highs and 14 new lows.

The volume on the US stock exchanges was 10.64 billion shares, compared with the average of 10.67 billion in the last 20 trading days.

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