Inflation Report Touches Off Activity, but Stocks Settle Down

Disney climbs after promising to raise streaming prices
By Newser Editors and Wire Services
Posted Aug 10, 2023 4:00 PM CDT
Stocks Settle Down After Inflation Report's Release
Picketers demonstrate outside Disney studios last month in Burbank, Calif. The Walt Disney Co. reported stronger profit than expected in the last quarter.   (AP Photo/Damian Dovarganes)

Stocks swung through shaky trading Thursday following the latest update on inflation across the nation, only to end up roughly where they started. The S&P 500 edged up by 1.12, or less than 0.1%, to 4,468.83. It was just the second winning day for the index in the last eight, the AP reports, but it had been up 1.3% in the morning before wobbling between small gains and losses. The Dow Jones Industrial Average gained 52.79, or 0.2%, to 35,176.15 after giving up most of a morning gain of 455 points. The Nasdaq composite added 15.97, or 0.1%, to 13,737.99.

The morning's highly anticipated report showed US consumers paid prices that were 3.2% higher in July than a year earlier. That's a touch milder than the 3.3% inflation rate economists expected to see and down sharply from last summer's peak above 9%. Beneath the surface, underlying trends for inflation were also within expectations. The readings bolstered hopes among investors that the Federal Reserve's campaign to grind down inflation is progressing and that it could maybe even be finished hiking interest rates. High rates undercut inflation by slowing the entire economy and hurting investment prices, which raise the risk of a recession.

Big US companies, meanwhile, continue to report mostly better profits for the spring than analysts expected. That's usually the case, and analysts had particularly low expectations coming into this reporting season. Higher costs for workers and other expenses are broadly eating into profit margins. The Walt Disney Co. rose 4.9% after saying it would raise prices for some of its streaming services in hopes of boosting profitability. The entertainment giant reported stronger profit for the spring than analysts expected but weaker revenue. Capri Holdings, which owns the Michael Kors, Versace and Jimmy Choo brands, soared 55.7% as Big Fashion continues to consolidate.

(More stock market stories.)

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