NEW YORK (AFP) – US equities eked out modest gains on Wednesday (May 26) after a lacklustre session that saw positive corporate news dueling with lingering concerns over the global recovery and US inflation.
Amazon announced a deal to acquire MGM studios, and major retailers reported an earnings surge fuelled by cash-flush American consumers.
The Dow Jones Industrial Average ended essentially flat at 34,323.05.
The broad-based S&P 500 edged up 0.2 per cent to close at 4,195.99, while the tech-rich Nasdaq Composite Index advanced 0.6 per cent at 13,738.
Investors continue to monitor signs of rising inflation amid fears higher prices could prompt a sudden shift in Federal Reserve policy.
But Fed vice-chairman Randal Quarles again tried to tamp down concerns, saying current prices spikes are unlikely to last, and warning it would be “unwise” for the central bank to “take actions that might slow the recovery prematurely.”
Gregori Volokhine, of Meeschaert Financial Services, said investors are becoming convinced the Fed eventually will take steps to keep inflation under wraps.
“The markets are calmer, they are seeing excellent results,” he told AFP.
And though “they see numbers that could point to a return of inflation, but they have this confidence that the Fed will be there to avoid being too aggressive later.”
Several retailers surged after reporting earnings results, with Dick’s Sporting Goods jumping 17 per cent and Urban Outfitters gaining more than 10 per cent amid hopes for a strong industry recovery.
Amazon edged up 0.2 per cent after announcing it would acquire the storied MGM studios for US$8.45 billion (S$11.2 billion), giving the US tech giant a vast library to further its ambitions in streaming.
Ford jumped 8.5 per cent as it said it is ramping up investment in zero-emission cars and by 2030 expects 40 per cent of its sales volume to be comprised of fully electric vehicles.