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Delta Air Lines up after lifting profit outlook
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Producer prices barely rise in June; core PPI subsides
(Updates to close)
By Caroline Valetkevitch
NEW YORK, July 13 (Reuters) -
U.S. stocks extended recent gains to end higher on Thursday, as data showed the annual increase in U.S. producer inflation was the smallest in nearly three years.
The data provided more evidence that inflation pressures were subsiding. Wednesday's CPI report showed U.S. consumer prices registered their smallest annual increase in more than two years.
The reports have helped to support the view the Federal Reserve will stop hiking rates after an expected 25 basis points rate increase later this month.
"PPI is another confirmation this week that inflation continues to trend in the right direction even as we see better overall labor market and consumer data. That is a good sign," said Mona Mahajan, senior investment strategist at Edward Jones.
In the 12 months through June, the producer price index climbed 0.1%. That was the smallest year-on-year gain since August 2020 and followed a 0.9% increase in May.
According to preliminary data, the S&P 500 gained 37.73 points, or 0.84%, to end at 4,509.89 points, while the Nasdaq Composite gained 219.35 points, or 1.58%, to 14,138.31. The Dow Jones Industrial Average rose 44.48 points, or 0.13%, to 34,391.91.
Among the day's best performers, U.S. chip stocks rallied, with Nvidia jumping to a record high and the Philadelphia semiconductor index touching its highest level since January 2022.
Offsetting some of the day's upbeat tone, a separate report showed weekly jobless claims unexpectedly fell last week, indicating that the labor market remains tight.
Focus also is shifting to the second-quarter U.S. earnings season kicking off this week. Shares of JPMorgan Chase were little changed ahead of its quarterly results due before the opening bell Friday.
"We might have another quarter here where the positive sentiment will continue," said Alan Lancz, president of Alan B. Lancz & Associates Inc. in Toledo, Ohio.
"As long as expectations and guidance are in line, that's what a lot of institutional investors will be looking at."
Delta Air Lines shares gained after it lifted its full-year profit outlook following stronger-than-expected second-quarter earnings on a relentless post-pandemic travel boom.
PepsiCo shares also advanced. The company raised its annual revenue and profit forecasts for the second time.
Among other gainers, shares of Google parent Alphabet Inc were up after it said it was rolling out its artificial-intelligence chatbot Bard in Europe and Brazil, easing worries about overseas regulatory issues.
(Reporting by Caroline Valetkevitch; additional reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru and Sinead Carew in New York; Additional reporting by Shashwat Chauhan; Editing by Saumyadeb Chakrabarty, Maju Samuel and Deepa Babington)
