NEW YORK: Wall Street rebounded strongly on Wednesday (May 16) as upbeat data about US industry and positive corporate results offset weak housing data and inflation jitters.
The benchmark Dow Jones Industrial Average gained 62.52 points (0.25 per cent) to close the day at 24,768.93, recouping some of the ground lost on Tuesday.
The broader S&P 500 jumped 11.01 points (0.41 per cent) to end at 2,722.46, while the tech-dominant Nasdaq rose 46.67 points (0.63 per cent) to 7,398.30 respectively.
Yields on the 10-year US Treasury note continued to move higher, hitting 3.1 per cent, and oil prices rose again, so inflation concerns remain, but seemed to be overshadowed by positive data.
New data showed industrial production jumped 0.7 per cent in April, and while it in part was spurred by cold weather that drove utility output higher, manufacturing and mining also put in a solid performance.
However, the cold weather that helped industry also put a damper on homebuilding, particularly of apartments, which slowed in April, falling 3.7 per cent.
Department store chain Macy’s soared nearly 11 per cent after beating expectations for same-store sales.
“We are seeing a rebound, with good data on industrial production and a rebound in oil prices,” said Peter Cardillo of Spartan Capital Securities.
But trade and geopolitical concerns – including North Korea’s threat to pull out of the much touted June summit with President Donald Trump – are “overhanging the market,” he said.
Gorilla Trades strategist Ken Berman agreed those factors, as well as renewed violence in Gaza, “could be weighing on the renewed market optimism we have seen over the past week or so.”
However, even with rising oil prices, “investors seem unfazed, which is a good sign for the rest of the month,” he said in a research note.
Industrial conglomerate 3M fell more than one percent after Jefferies downgraded the company to “hold” and cut its price target on fears the company was vulnerable to inflation.
But Teva Pharmaceuticals rose nearly three percent after Berkshire Hathaway revealed it had increased its stake in the company.
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