Dow climbs 100 points to a record amid strong earnings and tame inflation, resuming February rally
U.S. stocks jumped on Wednesday to resume their February rally, as investors cheered a batch of solid corporate earnings as well as data showing subdued inflation.
The Dow Jones Industrial Average gained 110 points to a record high. The S&P 500 rose 0.4% and the Nasdaq Composite climbed 0.5%, both hitting all-time highs.
The advance came after new data from the Labor Department showed tamed inflationary pressure. The U.S. consumer price index rose 0.3% in January, matching expectations from economists polled by Dow Jones. The core consumer price index, which excludes volatile food and energy costs, was unchanged last month.
Coca-Cola rose 1% after the company topped Wall Street’s estimates for its fourth-quarter earnings with cost-cutting efforts. Under Armour jumped 11% after reporting a surprise profit for the holiday quarter as sales were boosted by strong digital growth.
Twitter popped 13.6% after the social media company beat Wall Street’s earnings and revenue expectations.
Better-than-expected earnings from Lyft, Cisco Systems, Mattel and Yelp also boosted sentiment on Wall Street. Lyft reported signs of a recovery from the Covid-19 pandemic.
Traders will also be watching closely Federal Reserve Chairman Jerome Powell’s speech before The Economic Club of New York at 2:00 p.m. ET.
On Tuesday, the 30-stock Dow and the S&P 500 fell slightly, snapping a six-day winning streak. The tech-heavy Nasdaq Composite eked out another record closing high.
The small-cap benchmark Russell 2000 gained 0.4% to an all-time high, bringing the index’s weekly gain to nearly 11%. Many investors view small caps as a proxy for an economic recovery from the pandemic.
Wall Street is having a strong February with the S&P 500 up more than 5% so far. Investors remained optimistic about additional Covid-19 stimulus. House Democrats unveiled the details of a relief proposal that included $1,400 direct checks with faster phase-outs than previous bills.
“The virus is continuing to mutate, vaccines are taking longer than expected to distribute and achieving herd immunity seems as if it will take a lot longer as a result,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “On the bright side, massive fiscal stimulus and an extremely accommodative Federal Reserve should keep equities moving higher while we wait for those setbacks to be resolved.”
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