US stocks close higher after favourable producer inflation data
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Traders work on the floor of the New York Stock Exchange, in New York City.
PHOTO: REUTERS
NEW YORK - US stocks closed higher on Aug 13 as traders responded positively to cooler-than-expected producer inflation data, bolstering expectations of a Federal Reserve interest rate cut.
The producer price index (PPI) rose by 0.1 per cent in July, down slightly from a month earlier, the Labour Department said in a statement.
The data will likely be well-received by the Federal Reserve as it weighs the right time to begin cutting interest rates from their current 23-year high.
All three major indices on Wall Street finished higher on Aug 13, led by the tech-rich Nasdaq Composite index, which closed up 2.4 per cent at 17,187.61.
The Dow Jones Industrial Average finished 1 per cent higher at 39,765.64, and the broad-based S&P 500 rose 1.7 per cent to 5,434.43.
“The trend in inflation is leading in the right direction, and today was good news,” Mr Tom Cahill, from Ventura Wealth Management, told AFP.
“That suggests that the Fed will very likely cut the rates” in September, he added,
Among individual firms, coffee giant Starbucks closed 24.5 per cent higher after it named Chipotle chief executive Brian Niccol as its new CEO.
But the good news for Starbucks was bad news for Chipotle, whose shares closed down 7.5 per cent following the news of Niccol’s departure. AFP