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NIKE, BANK STOCKS PUSH S&P 500 TO NEW HIGHS
- By The Financial District
- Jun 26, 2021
- 2 min read
The S&P 500 index hit a record high on Friday, boosted by gains in Nike and bank stocks, while weaker-than-expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve, Devik Jain and Medha Singh reported for Reuters on June 26, 2021.
Nike Inc. surged 14.6% to an all-time high after the sneaker maker forecasted fiscal full-year sales ahead of Wall Street estimates, helping the Dow rise 0.63%. Inflation has been front-and-center of investors' minds, with latest personal consumption expenditures (PCE) data showing a measure of underlying inflation rose less than expected in May.
Core PCE rose 3.4% year-over-year, above the Fed's 2% flexible target. The data "provided support to the Fed's argument that inflation is transitory and helped allay fears that we are witnessing runaway inflation," said Anu Gaggar, senior global investment analyst at Commonwealth Financial Network.
The S&P 500 and the Nasdaq were on track for their best weekly jump in 11 after an agreement on a bipartisan infrastructure deal and reassurances from Fed Chair Jerome Powell calmed nerves following the central bank's hawkish surprise last week.
The S&P banks index jumped 1.3% after the Fed announced big banks have cleared latest stress test and will no longer face pandemic-era restrictions on buying back stock and paying dividends.
Eight of the 11 major S&P sectors rose in early trading, with financials and materials among the biggest gainer. Consumer discretionary, which houses some of the mega-cap tech names such as Tesla Inc. and Nike, was the top performer.
At 10:06 a.m. ET, the Dow Jones Industrial Average was up 216.46 points, or 0.63%, at 34,413.28, the S&P 500 was up 10.91 points, or 0.26%, at 4,277.40, and the Nasdaq Composite was down 3.97 points, or 0.03%, at 14,365.74. FedEx Corp. dropped 4.9% after the U.S. delivery firm missed 2022 earnings forecast due to hiring difficulties. Rival United Parcel Service Inc. also fell 0.6%.
