UKX FTSE 100 Index

By Anora M. Gaudiano, MarketWatch , Ryan Vlastelica

Stocks gain after tame April inflation reading

U.S. stocks rose on Thursday, with equities advancing in a broad rally that was set to give the Dow Jones Industrial Average its longest winning streak since February.

Technology stocks are leading the way, in keeping the trend so far this month. But Wall Street was also supported by the latest economic data, which suggested the economy was healthy, but not growing so quickly that it was at risk of overheating.

What are markets doing?

The Dow Jones Industrial Average rose 190 points, or 0.8%, to 24,732. The blue-chip average is on track for its sixth straight positive session, its longest stretch in more than two months.

The S&P 500 gained 22 points, or 0.8%, to 2,720 with all 11 main sectors trading higher, and four of them gaining by at least 1%. The Nasdaq Composite Index advanced by 55 points, or 0.8%, to 7,395. The tech-heavy index was set for its fifth straight daily gain, its longest such streak since February.

The Russell 2000 index rose 0.6%. It is within 1% of hitting a new record, a sign of how small-cap stocks have recently been among the market's biggest outperformers (http://www.marketwatch.com/story/these-factors-are-making-small-cap-stocks-one-of-the-strongest-segments-of-wall-street-2018-05-09).

What is driving the markets?

Better-than-expected economic data was the latest boost to positive sentiment on Wall Street. The consumer-price index (http://www.marketwatch.com/story/consumer-price-index-climbs-02-in-april-2018-05-10)rose 0.2% in April, while core CPI, which strips out food and energy, rose 0.1%. The data seemed to ease the concern that inflation was returning to markets in a big way.

Separately, the number of people who applied for first-time U.S. unemployment benefits (http://www.marketwatch.com/story/us-jobless-claims-stick-near-49-year-low-of-211000-2018-05-10)in early May stood at 211,000 for the second straight week, near a 49-year low.

A rise in confidence among investors could be seen from the steady decline in implied volatility, as measured by the Cboe Volatility Index . Wall Street's so-called "fear gauge" has been falling for the past five sessions, trading near 12.97, touching its lowest level since late January (http://www.marketwatch.com/story/wall-streets-fear-index-drops-to-levels-not-seen-since-before-stocks-fell-in-to-correction-2018-05-10).

What are strategists saying?

"Any way you look at it, a gain of 125 S&P 500 points over the course of a week is pretty good. We've seen a drop in volatility and momentum has improved of late," said William Delwiche, an investment strategist at Robert W. Baird.

Delwiche noted the recent outperformance of tech stocks (http://www.marketwatch.com/story/tech-stocks-have-regained-their-mojo-in-may-sector-is-back-near-records-2018-05-10), a sector that is up 7.5% in May, a gain that's nearly twice as steep as any other group. While this has been leading the overall market higher, he suggested it also represented something of a cautionary point.

"Because this handful of stocks are continuing to lead, it will be hard to get the kind of market breadth that you'd like to see signal a more positive backdrop. I'd like to see broader participation, and more trading volume on positive days (http://www.marketwatch.com/story/why-mondays-rally-may-not-mean-momentum-has-shifted-to-the-upside-2018-03-27). Until we get that, then I'm not sure that the consolidation phase has ended."

Read: Stock-market bulls lose hope as indexes trade in a tight range (http://www.marketwatch.com/story/stock-market-bulls-lose-hope-as-indexes-trade-in-a-tight-range-2018-04-24)

What stocks are in focus?

Large technology companies were among the day's biggest gainers. Apple Inc.(AAPL) rose 1.4% and hit a new record. The iPhone maker was poised for its ninth straight daily gain. Facebook Inc. (FB) rose 1.6%.

Shares of Roku Inc.(ROKU) fell 0.7% a day after it reported forecast-beating earnings (http://www.marketwatch.com/story/roku-earnings-show-cheap-gadgets-are-having-desired-effect-stock-gains-2018-05-09) and issued a better-than-expected second-quarter guidance.

Shares of L Brands, Inc.(LB) slumped 8% after the parents of Victoria's Secret issued a profit warning (http://www.marketwatch.com/story/victorias-secret-parent-l-brands-shares-fall-after-profit-warning-2018-05-10).

U.S.-listed shares of Royal Bank of Scotland Group PLC(RBS.LN) jumped 3.7% after news it will pay $4.9 billion in a settlement with the U.S. Department of Justice (http://www.marketwatch.com/story/rbs-to-pay-49-billion-in-settlement-with-department-of-justice-2018-05-10) over its role in the mis-selling of toxic mortgage-backed securities between 2005 and 2007. The settlement was smaller than feared and is seen as clearing the way for the U.K. government to sell its 71% stake it still holds in the lender.

AMC Entertainment Holding Inc.(AMC) jumped 3.6% after profit and revenue rose well above forecasts (http://www.marketwatch.com/story/amc-networks-stock-set-to-surge-after-profit-and-revenue-rise-well-above-expectations-2018-05-10).

NVIDIA Corp.(NVDA) and News Corp. (NWS.AU) are slated to release results after the closing bell. News Corp. is the owner of MarketWatch, the publisher of this report.

Read:Data center, gaming momentum need to distract from auto, crypto weakness for Nvidia (http://www.marketwatch.com/story/nvidia-earnings-data-center-gaming-momentum-need-to-distract-from-auto-crypto-weakness-2018-05-08)

What are other markets doing?

Asian markets (http://www.marketwatch.com/story/asian-markets-lifted-by-wall-street-oil-prices-2018-05-10) closed mostly higher, while European stocks (http://www.marketwatch.com/story/european-stocks-rise-for-5th-day-as-banks-rally-after-rbs-settlement-2018-05-10) traded mixed. The U.K.'s FTSE 100 index rose slightly after the Bank of England's Monetary Policy Committee left key interest rate unchanged on so-called "Super Thursday" -- when its meeting minutes and quarterly inflation report are released at the same time.

Read:The pound at $1.3850 or $1.3350? It all rests on the BOE's 'Super Thursday', ING says (http://www.marketwatch.com/story/the-pound-at-13850-or-13350-it-all-rests-on-the-boes-super-thursday-ing-says-2018-05-09)

The decision to abandon the accord and reimpose sanctions on the Middle Eastern country sparked a rally in oil prices on Wednesday. On Thursday, oil futures bounced back from earlier weakness to close modestly higher. West Texas Intermediate crude rose 22 cents, or 0.3%, to settle at $71.36 a barrel, a 3 1/2 year high.

Read:Oil and the dollar are doing something they have only done 11 times in the past 35 years (http://www.marketwatch.com/story/oil-and-the-dollar-are-doing-something-they-have-only-done-11-times-in-the-past-35-years-2018-05-09)

The dollar declined against most other major currencies (http://www.marketwatch.com/story/dollar-edges-back-for-second-day-with-us-inflation-data-on-deck-2018-05-10), while gold inched 0.6% higher.

--Barbara Kollmeyer and Sara Sjolin contributed to this report

(END) Dow Jones Newswires

May 10, 2018 15:01 ET (19:01 GMT)

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