NEW YORK: The S&P 500 and the Dow rose on Tuesday, with the benchmark S&P 500 within 0.5% of its record high as investors cheered signs of an improving economy ahead of a week packed with major data that is expected to shed more light on the path of inflation.
The two indexes are rising for the fourth straight session as investors bet on economically sensitive stocks benefiting the most from a post-Covid-19 recovery. The S&P 1500 airlines index added 0.8%.
The S&P energy index jumped 3.2% on a promising outlook for fuel demand, while financials hit a record high and materials firmed about 1%.
Latest data showed US manufacturing activity picked up in May as pent-up demand amid a reopening economy boosted orders, but unfinished work piled up because of shortages of raw materials and labour.
Stock markets were unperturbed on Friday by a surge in key inflation readings for April following reassurances from Federal Reserve officials that the ultra-loose monetary policy would remain in place.
“For now, (investors) are embracing the economic data that shows improvements in the economy and are ignoring data that suggests that it’s going to lead to much higher prices and shortages that affect specific companies,” said Rick Meckler, partner, Cherry Lane Investments in New Vernon, New Jersey.
At 11:36 a.m. ET, the Dow Jones Industrial Average was up 135.83 points, or 0.39%, at 34,665.28 and the S&P 500 was up 5.66 points, or 0.13%, at 4,209.77. The Nasdaq Composite was down 15.64 points, or 0.11%, at 13,733.10.
Abbott Laboratories fell 7.8%, weighing the most on the S&P 500, after cutting its full-year 2021 profit forecast due to a projected drop in Covid-19 diagnostic testing demand.
Cloudera Inc jumped 24% after private equity firms KKR & Co and Clayton Dubilier & Rice LLC agreed to take the data analytics firm private in a $5.3 billion dollar deal.
A group of “meme stocks” extended gains from the previous week with shares of AMC Entertainment Holdings Inc up 15.8% after the movie theater chain announced a $230 million capital raise.
Advancing issues outnumbered decliners by a 2.35-to-1 ratio on the NYSE and by a 1.39-to-1 ratio on the Nasdaq.
The S&P index recorded 61 new 52-week highs and no new low, while the Nasdaq recorded 131 new highs and 17 new lows.
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