(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* Energy stocks fall as oil declines over 3%
* Tesla dips as Musk rejects bitcoin
* Transports, chips, small caps outperform
* Indexes up: Dow 1.29%, S&P 1.22%, Nasdaq 0.72%
(Updates with closing prices)
By Stephen Culp
NEW YORK, May 13 (Reuters) - Wall Street ended sharply
higher at the close of a broad rally on Thursday, bouncing back
from three straight days of selling on upbeat labor market data.
All three major U.S. stock indexes notched solid gains, with
the S&P 500 enjoying its biggest percentage gain in over a
month. The Nasdaq, weighed by Tesla Inc TSLA.O , picked up the
rear.
Meanwhile, cyclical shares, which stand to benefit most from
economic revival, enjoyed the biggest gains.
Recent economic data has prompted inflation fears as
scarcity of both materials and workers threatens to send prices
surging in the face of a demand boom.
"If this is a footrace, supply chains are still tying their
shoes," said David Carter, chief investment officer at Lenox
Wealth Advisors in New York. "But they will catch up with demand
fairly quickly."
But on Thursday, investors appeared to be focusing on the
glass-half-full side of the demand/supply equation.
This was evidenced by the outperformance of small caps
.RUT , chips .SOX and transports .DJT , economically
sensitive stocks that stand to gain as the United States emerges
from the pandemic recession.
"Sectors and stocks that were hurt most significantly by
yesterday's sell-off rebounded strongly today given that
economic growth is expected to remain strong throughout the year
and any inflation is likely to be temporary," Carter added.
New applications for unemployment insurance continue to
fall, according to jobless claims data from the Labor Department
that hit a 14-month low. Labor Department data also showed producer prices surged
last month, building on the inflation surge narrative of
Wednesday's consumer prices report.
"The inflation boogeyman is back right on cue," Carter said.
"And will continue to spook markets for the coming months."
But rising prices were widely anticipated, and the U.S.
Federal Reserve has provided repeated assurances that it does
not foresee those spikes morphing into sustained, long-term
inflation.
The Dow Jones Industrial Average .DJI rose 433.79 points,
or 1.29%, to 34,021.45, the S&P 500 .SPX gained 49.46 points,
or 1.22%, to 4,112.5 and the Nasdaq Composite .IXIC added
93.31 points, or 0.72%, to 13,124.99.
Of the 11 major sectors in the S&P 500, 10 ended green, with
industrials .SPLRCI enjoying the largest percentage gain.
Energy .SPNY , weighed by a drop in crude prices CLc1 ,
was the sole loser, shedding 1.4%. O/R
Walt Disney Co DIS.N shares were down nearly 5% in
after-hours trading after posting quarterly results.
Dating app owner Bumble Inc BMBL.O tumbled 14.3%, falling
below its initial public offering price, as investors remained
cautious about how quickly users will return to in-person
meetings. Boeing Co BA.N rose 0.8% after gaining approval from U.S.
regulators for a fix of an electrical grounding issue.
Tesla continued its slide, dropping 3.1%, the heaviest drag
on the Nasdaq, after boss Elon Musk doubled down on his sudden
rejection of cryptocurrency bitcoin. Advancing issues outnumbered declining ones on the NYSE by a
1.91-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and no new lows; the
Nasdaq Composite recorded 49 new highs and 201 new lows.
Volume on U.S. exchanges was 11.50 billion shares, compared
with the 10.53 billion average over the last 20 trading days.
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