NEW YORK: Wall Street’s main indexes gained on Tuesday, shaking off an unconfirmed report of Russian missiles crossing into Poland that sparked volatility, as investors seized on softer-than-expected inflation data that raised hopes of a pullback in rate hikes by the US Federal Reserve.
Equities were boosted by Tuesday’s inflation report that showed producer prices rising 8% in the 12 months through October against an estimated 8.3% rise.
The gains built on a rally that was kicked off late last week by a cooler-than-expected report on consumer prices.
“The market has been driven by the inflation number that came out a little bit lower than expected and confirmed last week’s number to some degree that we may have rounded the corner on inflation,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
The market was “a little bit more volatile this afternoon as news stories came out about the Russian missile landing in Poland,” Tuz said.
The Dow Jones Industrial Average rose 56.22 points, or 0.17%, to 33,592.92, the S&P 500 gained 34.48 points, or 0.87%, to 3,991.73 and the Nasdaq Composite added 162.19 points, or 1.45%, to 11,358.41.
Two people were killed in an explosion in Przewodow, a village in eastern Poland near the border with Ukraine, firefighters said as NATO allies investigated reports that the blast resulted from Russian missiles.
The Associated Press earlier cited a senior US intelligence official as saying the blast was due to Russian missiles crossing into Poland. But the Pentagon said it could not confirm that account.
Stocks pulled back around mid-day after the report, with the Dow turning negative, before they steadied.
“The decline was triggered by reports of a Russian missile landing in Poland,” said Steve Sosnick, chief strategist at Interactive Brokers. “This could develop into something far worse, but right now markets are nervous, not panicked.”
Shares of Walmart Inc jumped 6.5% after the top US retailer lifted its annual sales and profit forecasts, benefiting from a steady demand for groceries despite higher prices.
Shares of other retailers, including Target Corp and Costco, also rose following Walmart’s report. Target, which is due to report on Wednesday, rose 3.9%, while Costco gained 3.3%.
Home Depot shares rose 1.6% after the home improvement chain’s results showed it tapped higher prices to override a drop in customer transactions for the third quarter.
Advancing issues outnumbered declining ones on the NYSE by a 3.25-to-1 ratio; on Nasdaq, a 2.01-to-1 ratio favored advancers.
The S&P 500 posted 5 new 52-week highs and no new lows; the Nasdaq Composite recorded 85 new highs and 76 new lows.
About 13.1 billion shares changed hands in U.S. exchanges, compared with the 12.2 billion daily average over the last 20 sessions. — Reuters