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* U.S. producer prices fall in July, underlying inflation
* Disney tops Netflix on streaming subscribers, shares jump
* U.S. weekly jobless claims rise for second straight week
* Indexes mixed: Dow rises 0.47%, S&P up 0.35%, Nasdaq flat
Aug 11 (Reuters) - The S&P 500 was trading at its highest
level in more than three months on Thursday, extending a rally
from the previous session as fresh evidence of cooling inflation
further cemented hopes of a smaller rise in interest rates.
The benchmark index rose after data showed U.S.
producer prices unexpectedly fell in July, bolstering the chance
of a 50-basis point hike by the Federal Reserve in September
instead of 75 basis points.
Meanwhile, the number of Americans filing new claims for
unemployment benefits rose for the second straight week,
indicating further softening in the labor market despite tight
The indexes had sharply rallied on Wednesday following a
softer-than-expected rise in consumer prices. The gains came
even as policymakers left no doubt they will tighten monetary
policy until price pressures are fully broken.
"These economic numbers don't deviate too much from the
expectation that the economy continues to do okay and perhaps
inflation is at least a bit under control," said Ted Weisberg,
the founder and president of Seaport Securities.
"The markets are anxious to get some good news after what
has been horrible first six months of the year."
Traders are now pricing in a more than 63.5% chance that the
Fed will hike interest rate by 50 basis points.
Eight of the 11 major S&P 500 indexes advanced, with
financials and industrials adding nearly 1%
each, while energy stocks tracked gains in crude prices.
Boosting the blue-chip Dow and the S&P 500, banks
extended their rally by 1.2% with Goldman Sachs
and JPMorgan Chase & Co up 1.3% and 0.8%, respectively.
At 12:25 p.m. ET, the Dow Jones Industrial Average
was up 155.20 points, or 0.47%, at 33,464.71, the S&P 500
was up 14.82 points, or 0.35%, at 4,225.06, and the Nasdaq
Composite was down 5.68 points, or 0.04%, at 12,849.13.
The tech-heavy Nasdaq lagged its peers as many
megacap growth and technology stocks reversed early gains as
U.S. Treasury yields pared losses.
"Some traders are looking to start taking some profits but
clearly the short-term direction is higher, not lower pending
additional macro data," said Michael James, managing director of
institutional equity trading at Wedbush Securities.
High-growth stocks that had rallied in the previous session
and whose valuations are vulnerable to rising bond yields, such
as Tesla Inc and Amazon.com Inc, fell nearly
1% each as the benchmark 10-year yield rose to 2.83%.
Despite its recent bounce of mid-June lows, the tech-heavy
Nasdaq is down 17.8% so far this year as fears of an aggressive
monetary policy sapped appetite for equities, particularly
The U.S. central bank has raised its policy rate by 225
basis points since March as it battles to cool demand without
sparking a sharp rise in layoffs.
In earnings-driven news, Walt Disney jumped 5.4% as
the media giant edged past rival Netflix Inc with 221
million streaming customers and announced it will increase
prices for customers who want to watch Disney+ or Hulu without
Bumble Inc fell 7.9% on cutting its full-year
revenue forecast, taking a hit from the Ukraine war, while also
grappling with competition from rival Match Group Inc
in the online dating market.
Advancing issues outnumbered decliners by a 2.59-to-1
ratio on the NYSE and by a 1.57-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 29 new
lows, while the Nasdaq recorded 55 new highs and 16 new lows.
(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in
Bengaluru; Editing by Arun Koyyur)