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Stocks gave up an early gain and turned mixed in mid-morning trading on Wall Street Wednesday. The tentative market moves came a day after the S&P 500 ended a six-day winning streak.
A report showing that inflation remained tame last month was encouraging for investors because it suggested the U.S. economy is in a strong position to receive more stimulus without overheating.
The yield on the 10-year Treasury note fell to 1.13% after being as high as 1.20% earlier this week.
The S&P 500 index was down 0.3% after the first hour of trading. It was up as much as 0.5% in the early going. The Dow Jones Industrial Average was down 0.1% and the Nasdaq was down 0.6%. All three are still trading near the record highs they reached in recent days.
The Labor Department said Wednesday that U.S. consumer prices rose 0.3% in January, led by a surge in energy. Even though the gain was the biggest monthly increase since July, inflation over the past year has remained relatively low. Over the past year, inflation is up a modest 1.4%. Core inflation, which excludes volatile food and energy costs, is also up 1.4% with core prices unchanged in January.
Investors have started watching inflation metrics more closely as Democrats in Congress prepare to inject $1.9 trillion of stimulus into the economy. U.S. businesses are starting to reopen and millions of Americans are now vaccinated, meaning there could be a surge of economic activity and therefore potential inflation. Before Wednesday’s report, Treasury yields had been climbing steadily for weeks, which is typically a sign that investors expect both the economy to get better and for inflation to increase.
Consumer price inflation remains very tame, said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.
Twitter and Under Armour jumped 13% and 10% respectively after delivering quarterly report cards that were much better than analysts were expecting. Twitter became the latest tech giant to report strong results despite the pandemic.
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AP Economics Writer Martin Crutsinger contributed to this report from Washington.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor
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