(For a Reuters live blog on U.S., UK and European stock
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* PCE price index decelerates in April
* Dell climbs on strong Q1 results
* Gap, American Eagle Outfitters cut profit forecasts
* Indexes up: Dow 1.05%, S&P 1.72%, Nasdaq 2.56%
NEW YORK, May 27 (Reuters) - Wall Street extended its rally
on Friday as signs of peaking inflation and consumer resiliency
sent investors into the long holiday weekend with growing
optimism that the Federal Reserve's policy tightening can avoid
tipping the economy into recession.
All three major U.S. stock indexes were sharply higher and
on track to snap their longest weekly losing streaks in decades.
"Were in one of those rebound periods," said Tim Ghriskey,
senior portfolio strategist Ingalls & Snyder in New York. "Does
that mean that the market has found its bottom? Well have to
see how much staying power this advance has."
"It feels good but something tells me that the selling is
not over," Ghriskey added.
The S&P and the Nasdaq suffered seven consecutive weekly
declines, the longest since the end of the dot-com bust, while
the blue-chip Dow's eight-week selloff was its longest since
During the S&P's seven weeks of consecutive losses, the
bellwether index shed 14.2% of its value, from its April 1 to
May 20 Friday closes, during which it threatened to confirm it
has been in a bear market since its Jan. 3 record closing high.
"It was inevitable that the losing streak would end,"
Ghriskey said. "Corrections and bear markets are followed by up
Generally upbeat earnings guidance and solid economic
indicators have fueled hopes that the Fed's hawkish maneuvers to
contain decades-high inflation will not cool the economy into
Data released on Friday showed better-than-expected consumer
spending and appeared to confirm that inflation, which has
dampened corporate earnings guidance and weighed on investor
sentiment, has peaked.
This, combined with the minutes from the central bank's most
recent policy meeting, which reaffirmed its commitment to rein
in spiking prices while remaining responsive to economic data,
helped boost risk appetite.
The Dow Jones Industrial Average rose 342.23 points,
or 1.05%, to 32,979.42, the S&P 500 gained 69.97 points,
or 1.72%, to 4,127.81 and the Nasdaq Composite added
300.70 points, or 2.56%, to 12,041.35.
All 11 major sectors of the S&P 500 were in positive
territory amid light trading, with real estate and
tech enjoying the largest percentage gains.
Shares of Apple Inc, Microsoft Corp and
Tesla Inc provided the strongest lift.
First-quarter earnings season is largely in the bag, with
488 of the companies in the S&P 500 having reported. Of those,
77% have beaten consensus expectations, according to Refinitiv.
Ulta Beauty gained 10.4% following its upbeat
quarterly earnings report.
Computer hardware company Dell Technologies Inc
surged 12.1% after beating quarterly profit and revenue
Apparel retailers Gap Inc and American Eagle
Outfitters trimmed their annual profit forecasts. The
latter dropped 5.5%, while the former rebounded and was last up
Trading volumes are expected to be light ahead of the long
weekend, with U.S. stock markets closed on Monday in observance
of Memorial Day.
Advancing issues outnumbered declining ones on the NYSE by a
5.96-to-1 ratio; on Nasdaq, a 3.77-to-1 ratio favored advancers.
The S&P 500 posted 3 new 52-week highs and 29 new lows; the
Nasdaq Composite recorded 36 new highs and 75 new lows.
(Reporting by Stephen Culp in New York
Additional reporting by Devik Jain and Anisha Sircar in
Editing by Vinay Dwivedi and Matthew Lewis)