US STOCKS-S&P 500 closes at all-time high as long-term inflation jitters fade

Reuters

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    * CPI report shows higher-than-expected inflation
    * Prominent meme stocks snap rally
    * Pfizer rises on news of US govt deal
    * Dropping Treasury yields weigh on financials
    * Indexes up: Dow 0.06%, S&P 0.47%, Nasdaq 0.78%

 (Updates with closing prices)
    By Stephen Culp
    June 10 (Reuters) - Wall Street stocks ended higher on
Thursday, with the S&P 500  .SPX  closing above its prior record
high set on May 7, 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 transform 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, sectors that stand to benefit from infrastructure
spending ended the session lower. Industrials  .SPLRCI  and
transports fell by 0.5% and 0.7%, respectively.
    The Dow Jones Industrial Average  .DJI  rose 19.1 points, or
0.06%, to 34,466.24; the S&P 500  .SPX  gained 19.63 points, or
0.47%, at 4,239.18; and the Nasdaq Composite  .IXIC  added
108.58 points, or 0.78%, at 14,020.33.
    Among the 11 major sectors of the S&P 500, healthcare
 .SPXHC  enjoyed the largest percentage gains.
    But interest rate-sensitive financials  .SPSY  fell the
most, dropping 1.1% as easing U.S. Treasury yields weighed on
the sector.  urn:newsml:reuters.com:*:nL2N2NS2F2
    GameStop Corp  GME.N , the stock most closely associated
with the social media-driven "meme stock" phenomenon, dropped
27.2% 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 slid, losing between 8%
and 19%.  urn:newsml:reuters.com:*:nL3N2NS237
    Pfizer Inc  PFE.N  advanced 2.2% 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
    Advancing issues outnumbered decliners on the NYSE by a
1.25-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.
    The S&P 500 posted 58 new 52-week highs and no new lows; the
Nasdaq Composite recorded 102 new highs and 14 new lows.  
    Volume on U.S. exchanges was 10.64 billion shares, compared
with the 10.67 billion average over the last 20 trading days.   

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

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