Stocks rose on Tuesday after another report indicated that inflation may slow, reigniting a rally in stocks.
The Dow Jones Industrial Average rose 193 points, or 0.6%. The S&P 500 added 1.4% and the Nasdaq Composite 2.3%.
producer price index, wholesale inflation measure, rose 0.2% for the month of October, Against consensus estimates pointing to a 0.4% increase in the Dow. The report comes after last week’s consumer price index data showed signs of easing inflationary pressure last month, which led to a sharp rise.
“The PPI reading certainly adds more fuel to the fire for those who feel we may finally be on a downward inflationary trend,” said Mike Lowengart, head of model portfolio creation at Morgan Stanley’s global investment desk. “The market embraced the consumer decline last week and the initial reaction today appears to be the same.”
He added, “We all have to keep in mind that the Fed’s rhetoric is quite mixed right now, and you can get a hawkish or a dovish view depending on which official you ask.”
Stocks are higher for the third day in the last four and all major averages are on pace for monthly gains. The Dow Jones rose 3.2% for the month of November. The S&P and Nasdaq rose 3.6% and 4.1%, respectively.
Elsewhere, retail stocks also lifted investor sentiment. Wal-Mart stock jump After the company beat Wall Street’s earnings and revenue estimates and boosted its full-year guidance. Home Depot reported strong results as well but kept guidance in place for the full year. Its shares rose slightly.
Taiwan Semiconductor, Louisiana Pacific and Paramount also jumped after regulatory filings showed Warren Buffett’s Berkshire Hathaway It bought new positions in the first two, and raised its stake in the last two.
Earnings season continues this week with retail reports from Target, Lowe’s, Bath and Body Works, Macy’s, Kohl’s, and Foot Locker on deck.
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