US close: Stocks firmer on fresh hopes for Fed pause

dl wall street new york city wall st nyc new york stock exchange nyse nasdaq us usa united states of america trading finance unsplash — Sharecast / Roberto Junior via Unsplash

US stocks closed in the green on Thursday – though off session highs – having been bolstered by positive consumer inflation indicators which raised hopes that the Federal Reserve could take a pause from tightening monetary policy at its next meeting.

At the close, the Dow Jones Industrial Average was up 0.15% at 35,176.15, while the S&P 500 saw a modest increase of 0.03%, ending the day at 4,468.83.

In a similar vein, the Nasdaq Composite advanced by 0.12%, settling at 13,737.99.

On the currency front, the dollar was last up 0.01% on sterling, trading at 78.9p, while it dipped 0.03% on the common currency to 91.04 euro cents.

Against the yen, the greenback edged 0.05% higher to change hands at JPY 144.82.

“US markets opened higher after US CPI for July saw a lower-than-expected rise to 3.2%, and core prices slipped back to 4.7%, increasing expectations that we’ve seen the last of the Fed rate hiking cycle,” said CMC Markets chief market analyst Michael Hewson earlier.

“With the shelter component stripped out there are increasing signs of little, to no inflation at all, in the US economy.”

Consumer inflation broadly meets expectations, jobless claims jump

On the economic front, US consumer prices experienced a slight rise of 0.2% in July, meeting the expectations of several economists.

The announcement from the US Bureau of Labor Statistics revealed that the consumer price index (CPI) maintained its month-on-month growth rate, consistent with the rate seen in June.

Excluding more volatile components such as food and energy, core inflation registered a 0.2% increase, also mirroring June's figures.

Year-over-year, CPI inflation in July experienced a mild uptick to 3.2% from 3% in the prior month, while core CPI showed a slight deceleration to 4.7% from 4.8% in June.

In the employment arena, there was a notable rise in jobless claims for the week ended 5 August, with data from the Department of Labor showing initial unemployment claims rising to 248,000, up 21,000 from the prior week’s 227,000.

The increase surpassed most economist predictions, which had anticipated a modest rise to about 230,000.

On a broader scale, the four-week moving average - a more consistent metric to evaluate long-term trends - showed an increment to 231,000 from the prior 228,250.

However, there was a glimmer of optimism as continuing claims experienced a slight decline for the week ended 29 July, totalling 1.684 million, down from 1.692 million in the week prior.

Walt Disney, Capri Holdings and Plug Power make moves

In equities, despite experiencing a net loss in its third quarter, the Walt Disney Company's stock rose 4.88% by the close.

The entertainment giant recorded a net loss of $460m - a noticeable swing from the prior year's profit of $1.4bn.

Still, the firm captured investor confidence by revealing plans to reduce expenses and implement price hikes.

Following the announcements, Morgan Stanley reiterated its 'overweight' perspective on Disney's stock.

Elsewhere, Capri Holdings rocketed 55.74% after Tapestry announced its decision to acquire the Michel Kors owner for $8.5bn, or $57 per share.

The takeover would be executed through a combination of new debt and cash.

Online retail giant Amazon managed a modest rise of 0.52% amid reports that it was intending to discontinue 27 out of its 30 clothing brands, and phase out private-label furniture.

On the downside, Plug Power's stock plummeted 15.81% after the alternative energy specialist unveiled second-quarter losses, which were broader than what the market had predicted.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Walt Disney Co. (DIS) $91.76 4.88%
Intel Corp. (INTC) $34.68 1.17%
Salesforce.Com Inc. (CRM) $208.25 1.16%
Amgen Inc. (AMGN) $262.06 1.06%
Verizon Communications Inc. (VZ) $33.02 0.95%
Dow Chemical Co. (DOW) $55.98 0.79%
Cisco Systems Inc. (CSCO) $53.37 0.72%
Chevron Corp. (CVX) $160.83 0.61%
International Business Machines Corporation (CDI) (IBM) $143.25 0.53%
Home Depot Inc. (HD) $329.40 0.36%