* Nasdaq, S&P 500 post longest weekly win streaks since
* S&P 500 recovers 50% of bear market losses
* S&P 500 is up 17.7% from a mid-June low
NEW YORK, Aug 12 (Reuters) - Wall Street closed higher on
Friday as signs that inflation may have peaked in July increased
investor confidence that a bull market could be under way and
spurred the S&P 500 and the Nasdaq to post their fourth straight
week of gains.
The S&P 500 is up 17.7% from a mid-June low, with the
latest gains coming from data this week showing a
slower-than-expected rise in the consumer price index and a
surprise drop in producer prices last month.
The S&P 500 crossed a closely watched technical level of
4,231 points, indicating the benchmark index has recouped half
its losses since tumbling from the all-time peak in January. A
50% retracement for some signals a bull market.
"It's really just a number, but it certainly makes investors
feel better - at least those who bought near the bottom," said
Tim Ghriskey, chief investment strategist at Inverness Counsel
in New York.
"I wouldn't declare victory over this bear market yet.
There's likely some bad news still out there. But there's a very
good chance we've seen the bottom."
The Dow Jones Industrial Average rose 424.38 points,
or 1.27%, to 33,761.05, while the S&P 500 gained 72.88
points, or 1.73%, to 4,280.15 and the Nasdaq Composite
added 267.27 points, or 2.09%, to 13,047.19.
For the week, the S&P 500 added 3.25%, the Dow rose 2.92%
and the Nasdaq gained 3.8%.
Volume on U.S. exchanges was 9.99 billion shares, compared
with the 11.04 billion average for the full session over the
last 20 trading days.
As the S&P 500 and Nasdaq posted their longest weekly
winning streaks since November, analysts noted the Federal
Reserve still has its work cut out as it seeks to tame inflation
by aggressively raising interest rates without sparking a
"Markets certainly got great news this week on inflation,"
said Dec Mullarkey, managing director of investment strategy and
asset allocation at SLC Management in Boston.
"A victory lap in some respects was in order, but it's not
'mission accomplished' by any means. It's still a very slow
Inflation by year-end might decelerate to 7% or a bit lower,
but getting core inflation under 4%, which is double the Fed's
target, will be tougher than markets anticipate, Mullarkey said.
Traders are pricing in a less hawkish Fed, with fed fund
futures showing a 55.5% chance of Fed policymakers raising rates
by 50 basis points when they meet in September, instead of 75
It was a sea of green on Wall Street for a second straight
day, with all 11 major S&P 500 sectors rising, along with
semiconductors, small caps and Dow transports
. Growth stocks rose 2.1%, while value
Investors bought $7.1 billion in equities in the week to
Wednesday, according to a Bank of America note, with U.S. growth
stocks recording their largest weekly inflow since December last
Also driving optimism was data showing U.S. consumer
sentiment ticked further up in August from a record low this
summer and American households' near-term outlook for inflation
eased again on softening gasoline prices.
After a rough start to the year, better-than-expected
second-quarter earnings from Corporate America have supported
the upbeat sentiment for U.S. equities.
Analysts in aggregate believe the S&P 500 posted
year-over-year earnings growth of 9.7% in the April to June
period, much stronger than the 5.6% predicted at quarter-end,
Banks rose 1.4% to extend their rally for a sixth
GlobalFoundries Inc jumped 11.9% on being added to
BofA Global Research's "U.S. 1 list."
Advancing issues outnumbered declining ones on the NYSE by a
4.43-to-1 ratio; on Nasdaq, a 2.76-to-1 ratio favored advancers.
The S&P 500 posted five new 52-week highs and 29 new lows;
the Nasdaq Composite recorded 78 new highs and 39 new lows.
(Reporting by Herbert Lash in New York
Additional reporting by Bansari Mayur Kamdar and Aniruddha Ghosh
in Bengaluru; Editing by Arun Koyyur and Matthew Lewis)