In this photo provided by the New York Stock Exchange, traders gather at a post on the floor, Wednesday, May 26, 2021, in New York. U.S. stocks edged higher in morning trading Wednesday as investors continue to monitor the economic recovery and rising inflation. (Courtney Crow/New York Stock Exchange via AP)
By Damian J. Troise and Alex Veiga
A choppy day of trading on Wall Street ended with stocks closing higher Wednesday, reversing much of the S&P 500's modest pullback the day before.
The benchmark index ended just under 0.2% higher after wavering between small gains and losses. Retailers and other companies that rely on consumer spending made solid gains. Communication and financial stocks also helped lift the market. The S&P 500's gains were tempered by declines in health care, technology and other stocks.
Smaller company stocks continued to outgain the rest of the market as they've done all year. Treasury yields mostly edged higher.
Markets have been bumpy over the last few days as investors move past a stellar corporate earnings season and await additional clues on economic growth and inflation, which has been rising.
“That’s just going to be the state of the market environment for some time to come,” said Kristina Hooper, chief global market strategist at Invesco.
The S&P 500 rose 7.86 points to 4,195.99. The Dow Jones Industrial Average, which turned 125 years old Wednesday, gained 10.59 points, or less than 0.1%, to 34,323.05. The blue-chip index swung between a gain of 97 points and a 41-point slide. The Nasdaq added 80.82 points, or 0.6%, to 13,738. The Russell 2000 index of smaller companies gained 43.52 points, or 2%, to 2,249.27.
The S&P 500 hit an all-time high on May 7th, but then fell for two straight weeks heading into this week. The index is on track for a gain this week of about 1%.
Investors bid up shares in several retailers that delivered strong quarterly report cards. Dick’s Sporting Goods jumped 16.9% after reporting a surge in first-quarter sales and solid earnings as team sports returned. Urban Outfitters rose 10% and Abercrombie & Fitch climbed 7.8% on similarly strong financial results.
Retailers, hotels and cruise lines are poised for growth as more people get back to some semblance of normal with vaccinations increasing and the pandemic seemingly receding.
The next key economic update is set for Thursday, when the Commerce Department releases its latest GDP report for the first quarter. Economists are expecting a huge rebound in 2021 and results from the beginning of the year will give Wall Street a clearer picture moving forward.
The growing economy has also raised inflation concerns, though analysts expect that much of the increase will be tied to economic growth and will be digestible. Concern centers around stronger inflation prompting governments and central banks to roll back economic stimulus and change course on interest rates. Federal Reserve officials have said that they see no need yet to change course.
Bond yields, which rose sharply earlier in the year, remained relatively steady. The yield on the 10-year Treasury rose to 1.58% from 1.56% from late Tuesday.
“Investors need to stop worrying about short-term concerns around The Fed and inflation,” Hooper said. “That’s really creating a lot of the churn we’re seeing.”
Online retail giant Amazon is buying MGM, the movie and TV studio behind James Bond, “Legally Blonde” and “Shark Tank,” with the aim of filling its video streaming service with more shows to watch. The announcement left the stock little changed.
Markets in Europe were mixed and markets in Asia were broadly higher.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
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President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
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