Wall St rises as Fed officials soothe inflation worries

(Reuters) -U.S. stocks rose marginally on Wednesday after remarks from Federal Reserve officials helped ease worries about higher inflation, while a recent dip in bond yields supported tech-related stocks.

The New York Stock Exchange is pictured amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

Apple Inc, Amazon.com Inc and Alphabet Inc added between 0.2% and 0.5%, as the yield on the benchmark 10-year Treasury note stood at more than two-week lows of 1.552%.[US/]

Higher yields pressure valuations for tech and other growth stocks, whose future cash flows are discounted at higher rates.

Technology and consumer discretionary, among the worst performing S&P sectors this month, provided the biggest support to the benchmark S&P 500 on Wednesday.

“The market seems to have calmed today but we see good demand for tech-related stocks even as most investors are conservatively optimistic,” said Jason Barsema, co-founder and president of Halo Investing.

“If data suggests any jump in inflation, it could lead to some volatility.”

After fears of rising inflation roiled Wall Street’s main indexes earlier this month, all eyes will be on the closely watched monthly U.S. personal consumption report, the Fed’s favorite inflation gauge, due later in the week.

Fed vice chair Richard Clarida downplayed the effects of higher price pressures on Tuesday, voicing faith in the central bank’s ability to engineer a “soft landing” if prices continued to escalate beyond what was expected.

With the S&P 500 sitting just about 1% away from its record high, strategists expect the benchmark index to end the year only about 2.5% above its current level as concerns over increasing inflationary risks weigh, according to a Reuters poll.

At 11:33 a.m. ET, the Dow Jones Industrial Average was up 26.54 points, or 0.08%, at 34,339.00 and the S&P 500 was up 5.61 points, or 0.13%, at 4,193.74. The Nasdaq Composite was up 54.62 points, or 0.40%, at 13,711.79.

Trading volumes could dwindle heading into the Memorial Day long weekend, which could aggregate price moves.

Cryptocurrency-related stocks including those in Riot Blockchain and Marathon Patent Group rose 9.7% and 10.4% as bitcoin briefly climbed back above $40,000 for the first time this week.

Amazon.com Inc said it is buying MGM, the fabled U.S. movie studio home to the James Bond franchise, for $8.45 billion, giving it a huge library of films and TV shows and ramping up competition with streaming rivals led by Netflix and Disney+.

Drug retailers such as Walgreens, CVS Health and Rite Aid Corp shed 2% and 4% after a report Amazon.com Inc is considering the launch of physical pharmacies in the United States.

Ford Motor Co gained 6.5% after it outlined plans to boost spending on its electrification efforts by more than a third.

Department store operator Nordstrom Inc dropped 8% after reporting a bigger-than-expected quarterly loss, hurt by price markdowns.

Advancing issues outnumbered decliners by a 1.98-to-1 ratio on the NYSE and by a 2.50-to-1 ratio on the Nasdaq.

The S&P index recorded 16 new 52-week highs and no new low, while the Nasdaq recorded 41 new highs and 32 new lows.

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