Wall Street advances, unshaken by inflation surge

Wall Street's major averages rose on Friday as investors shrugged off data showing a jump in inflation, although recent worries about a spike in prices kept the S&P 500 on course for its smallest monthly gain since February.

Consumer prices as measured by the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.7% in April after a 0.4% increase in March. Economists polled by Reuters had expected a 0.6% gain.

In the 12 months through April, the so-called core PCE price index vaulted 3.1%, blowing past the Federal Reserve's 2% target and reflecting pent-up demand as the economy reopens.

"This market is basically fearless right now," said Dennis Dick, a trader at Bright Trading LLC in Las Vegas.

"There were inflation jitters, most of which the market has shrugged off as there is a fear of missing out among investors as we scale record highs and we are seeing some money get back into tech stocks over the past two weeks."

Technology stocks provided the biggest boost to the S&P 500, with Salesforce.com Inc adding 7% after raising its full-year forecast for revenue and profit, helped by increased demand for its cloud-based software during the pandemic.

With the S&P 500 now hovering about 1% below its record high hit earlier this month, many big banks have warned of a pause in a year-long Wall Street rally that has been led mainly by heavyweight technology stocks including Apple Inc and Amazon.com Inc.

Investors are also hedging against market volatility as summer approaches. Strategists expect the S&P 500 to end the year at 4,300 points, according to a Reuters poll, about 100 points above its closing price on Thursday.

Safe-haven assets such as cash and gold funds drew investors during the week to Wednesday, Bank of America's fund flow statistics showed.

At 9:58 a.m. ET, the Dow Jones Industrial Average was up 140.57 points, or 0.41%, at 34,605.21 and the S&P 500 was up 13.73 points, or 0.33%, at 4,214.61. The Nasdaq Composite was up 67.70 points, or 0.49%, at 13,803.97.

The White House on Friday will present President Joe Biden's budget for trillions of dollars in spending on infrastructure, education and other initiatives, but the plan is unlikely to sway Republicans who want to tamp down US government spending.

Dell Technologies Inc and HP Inc reported quarterly revenue that beat Wall Street estimates but their shares fell 3.0% and 7.4%, respectively after they warned that the ongoing computer chip shortage could impact its ability to meet demand for laptops this year.

Boeing Co fell 1.1% after reports said it halted deliveries of its 787 Dreamliners, adding fresh delays for customers following a recent five-month delivery suspension due to production problems.

AMC Entertainment jumped 24.4%, leading gains among the so-called "meme" stocks on the back of a social media-led hype that helped double the value of AMC's stock this week.

The US stock market will remain shut on Monday for Memorial Day holiday.

Advancing issues outnumbered decliners by a 1.63-to-1 ratio on the NYSE and by a 1.96-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and one new low, while the Nasdaq recorded 62 new highs and six new lows.