US STOCKS-S&P 500 closes at record high as long-term inflation fears abate

Reuters

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 (Updates to market close)
    By Stephen Culp
    June 10 (Reuters) - Wall Street stocks ended firmer on
Thursday, with the S&P 500  .SPX  hitting a record closing high,
as economic data appeared to support the Federal Reserve's
assertion that the current wave of heightened inflation will be
temporary.
    All three major U.S. stock indexes advanced, with
market-leading megacap stocks putting the Nasdaq  .IXIC  out
front. But economically sensitive transports  .DJT  and
smallcaps  .RUT  ended the session in negative territory.
    The Labor Department's consumer price index (CPI) data came
in above consensus and added fodder to the debate over whether
current price spikes could morph into long-term inflation,
despite the Fed's assurances to the contrary.  urn:newsml:reuters.com:*:nL2N2NR2Q5
    But a closer look showed that much of the price surge came
from items such as commodities and airfares, and is therefore
likely to be temporary.  urn:newsml:reuters.com:*:nW1N2NS000
    "Earlier this week we had extremely boring market days as we
all had our eyes on the bullseye of this CPI report," said Ryan
Detrick, senior market strategist at LPL Financial in Charlotte,
North Carolina. "But once people looked under the surface, the
majority of the higher inflation is due to the reopening, and
stocks had a relief rally."
    "The market is taking it in stride as it realizes the whole
economy isn't overheating," Detrick added.
    A U.S. House of Representatives committee passed a $547
billion infrastructure spending bill targeting surface
transportation, adopting some of President Joe Biden's proposals
as part of his broader $2.3 trillion infrastructure package.
 urn:newsml:reuters.com:*:nL2N2NS1RD
    Still, industrials  .SPLRCI  and transports, sectors that
stand to benefit from infrastructure spending, were in negative
territory.
    Unofficially, the Dow Jones Industrial Average  .DJI  rose
12.21 points, or 0.04%, to 34,459.35, the S&P 500  .SPX  gained
19.71 points, or 0.47%, to 4,239.26 and the Nasdaq Composite
 .IXIC  added 106.86 points, or 0.77%, to 14,018.61.
    Among the 11 major sectors of the S&P 500, healthcare
 .SPXHC  enjoyed the largest percentage gains.
    But the interest rate-sensitive financial sector  .SPSY  was
the biggest loser, weighed by easing U.S. Treasury yields.
 urn:newsml:reuters.com:*:nL2N2NS2F2
    GameStop Corp  GME.N , the stock most closely associated
with the social media-driven "meme stock" phenomenon, slid after
the videogame retailer said it may sell new shares.  urn:newsml:reuters.com:*:nL3N2NR3UD
    Other stocks that have benefited from the retail
short-squeeze rally, including Clover Health Investments Corp
 CLOV.O , AMC Entertainment Holdings  AMC.N , Bed Bath & Beyond
Inc  BBBY.K  and GEO Group  GEO.N , also ended the session
lower.  urn:newsml:reuters.com:*:nL3N2NS237
    Boeing Co  BA.N  gained after sources told Reuters that
United Airlines  UAL.O  was in talks to place a
multi-billion-dollar order for single-aisle jets potentially
split between Boeing and Europe's Airbus  AIR.PA .  urn:newsml:reuters.com:*:nL3N2NS208
    Pfizer Inc  PFE.N  rose on news that the United States would
pay the drugmaker about $3.5 billion for 500 million COVID-19
vaccine doses that it intends to donate to the 100 lowest income
countries.  urn:newsml:reuters.com:*:nS8N2MQ09D

 (Reporting by Stephen Culp;
Additional reporting by Ambar Warrick; Editing by Richard Chang)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))

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