US close: Stocks little changed as traders digest CPI reading

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Wall Street stocks were little changed at the close on Thursday as market participants digested some key inflation data.

At the close, the Dow Jones Industrial Average was up 0.04% at 37,711.02, while the S&P 500 lost 0.07% to 4,760.24 and the Nasdaq Composite saw out the session flat at 14,970.19.

The Dow closed just 15.29 points higher on Thursday, narrowly building on gains recorded in the previous session.

Thursday's primary focus was December's all-important consumer price index report, which revealed inflation had risen more than expected in December, according to figures from the Labor Department. Consumer prices rose by 3.4%, up from 3.1% in November and above economists' expectations of a 3.2% increase. The jump was driven mainly by higher housing costs. Core inflation - which strips out volatile food and energy prices - ticked down to 3.9% from 4%. Economists were expecting 3.8% growth.

"In short: You ain't getting a March rate cut. It is the kind of print that shouts the Fed does not need to rush to cut this quarter. Disinflation won't be linear and we think the Fed is going to be rather (perhaps overly) cautious in easing in this kind of environment," said Finalto's Neil Wilson. "It's going to take way, way longer to get to target - if indeed at all - and the market is the wrong side of this reality."

Also drawing an amount of investor attention, the Securities and Exchange Commission has approved changes to its rules, allowing bitcoin exchange-traded funds. The hotly-anticipated move will result in an expansion of access to the benchmark cryptocurrency. Crypto stocks jumped on the back of the news.

Elsewhere on the macro front, Americans filed claims for state benefits at a decelerated clip in the week ended 6 January, according to the Labor Department, hitting their lowest level since October. Initial jobless claims fell by 1,000 from the previous week's upwardly revised value to 202,000, well below consensus expectations for a reading of 210,000.

Finally, the Federal Government posted a deficit of $129.0bn in December, up 52% year-on-year as outlays rose and receipts fell.

No major corporate earnings were slated for release on Thursday but investors will be looking ahead to the beginning of earnings season on Friday, with the likes of Bank of America and JPMorgan Chase both set to report their latest quarterly figures tomorrow.

Reporting by Iain Gilbert at Sharecast.com

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