NEW YORK, April 13 (Xinhua) — U.S. stocks made solid gains on Thursday thanks to the surprise fall of U.S. producer price index (PPI) in March.
The Dow Jones Industrial Average was up 383.19 points, or 1.14 percent, to 34,029.69. The S&P 500 rose 54.27 points, or 1.33 percent, to 4,146.22. The Nasdaq Composite Index increased 236.93 points, or 1.99 percent, to 12,166.27.
Ten of the 11 primary S&P 500 sectors ended in green with communication services and consumer discretionary sectors leading the gainers, up 2.33 percent and 2.31 percent, respectively. Meanwhile, real estate sector bucked the trend by posting 0.4 percent of loss.
U.S. PPI in March showed a month-on-month drop of 0.5 percent while market consensus forecast saw no change, according to data issued by the U.S. Bureau of Labor Statistics on Thursday morning.
Core PPI excluding food and energy dipped 0.1 percent in March from the previous month with market consensus forecasting 0.3 percent of month-on-month expansion.
New economic data showed that producer prices in the United States dropped more than expected, indicating that the Federal Reserve’s aggressive rate hike strategy might be working, said James Hyerczyk, senior market analyst with market information supplier FX Empire.
The S&P 500 Index closed sharply higher as investors got some comfort that the Fed may not need to raise rates at its next meeting, said Hyerczyk.
The latest PPI data in the United States pointed to easing price pressures on producers and it should support further disinflation in core goods inflation covered by consumer price index (CPI), according to a research note by Bank of America Global Research on Thursday.
U.S. headline personal consumption expenditures inflation would fall to 0.1 percent in March from 0.3 percent in February based on the latest PPI and CPI data, according to economists with Bank of America Global Research.
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