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Saturday 15 July 2017 BUSINESS
A24

Gas, wireless Modest gains push stock indexes to record highs

plans keep US

inflation flat By ALEX VEIGA Chase weighed on banks. Bell, investment strategist at Investors had mix of com-
Financial stocks were the CFRA Research.
pany earnings and eco-
AP Business Writer
Gains by big technology only sector in the S&P 500 The S&P 500 index gained nomic data to consider
By CHRIS S. RUGABER and health care compa- to end lower. 11.44 points, or 0.5 percent, Friday.
AP Economics Writer nies pushed U.S. stocks Investors brushed off a re- to 2,459.27. The Dow rose The Commerce Depart-
WASHINGTON (AP) — modestly higher Friday, lift- port showing U.S. retail 84.65 points, or 0.4 percent, ment said retail sales fell 0.2
Lower costs for gas, air- ing several major indexes sales declined in June and to 21,637.74. The average percent in June as Ameri-
line tickets, new and used cans curtailed spending
cars and wireless mobile at restaurants, department
phone plans kept U.S. con- stores and gasoline sta-
sumer prices flat in June, tions. That followed a 0.1
evidence that inflation re- percent drop in May. In ad-
mains muted. dition, the Federal Reserve
The unchanged read- said U.S. factory output re-
ing followed a drop of 0.1 bounded in June as manu-
percent in May, the Labor facturers churned out more
Department said Friday. In- cars, appliances and furni-
flation has climbed just 1.6 ture. Overall industrial pro-
percent from a year ago. duction rose 0.4 percent
That’s down sharply from and is up 2 percent over
February, when prices rose the past year.
2.7 percent from a year Meanwhile, the Labor De-
earlier. partment said U.S. consum-
Excluding the volatile food er prices were flat in June,
and energy categories, the latest evidence that
prices rose 0.1 percent in inflation remains muted. All
June and 1.7 percent from told, inflation has climbed
a year earlier. just 1.6 percent from a year
As inflation has slowed, the ago.
Federal Reserve’s plans to The market rallied on
raise interest rates once Trader Gregory Rowe works on the floor of the New York Stock Exchange. Gains by big technology Wednesday after Federal
more this year and three and health care companies pushed U.S. stocks modestly higher Friday, lifting several major Reserve Chair Janet Yellen
times next year have come indexes to new highs. hinted that the Fed could
under greater scrutiny. The slow its rate hike plans if
Fed typically hikes rates to to new highs. drew encouragement from has hit a record high three inflation continues to run
ward off rising inflation, yet The Standard & Poor’s 500 data indicating industrial days in a row. below the Fed’s 2 percent
price gains have declined index, Dow Jones industrial production rebounded last The Nasdaq composite target.
this year. average and Russell 2000 month. Traders also wel- added 38.03 points, or 0.6 As such, the June con-
Fed policymakers have lift- index of smaller-company comed a report showing percent, to 6,312.47. The sumer prices data suggests
ed their benchmark short- stocks each set records as inflation at the consumer Russell 2000 index picked that “the Fed is not going to
term rate four times in the the market posted its third level was flat in June, which up 3.16 points, or 0.2 per- get too aggressive on rate
past 18 months. straight day of gains. suggests that the Federal cent, to 1,428.82. hikes,” Bell said.
Federal Reserve Chair Energy companies helped Reserve may have more The indexes all ended the Several big banks reported
Janet Yellen hinted on lift the market as crude oil reason to delay another in- week with gains are on their second-quarter earn-
Wednesday that the Fed prices rose. High-dividend terest rate increase. pace to finish higher this ings on Friday. Among them
could slow its rate hike plans stocks like real estate com- “The low inflation data will month. were JPMorgan Chase,
if inflation continues to run panies and utilities also put the Fed more in a wait- Bond prices rose. The yield Citigroup and Wells Fargo,
below the Fed’s 2 per- posted big gains following and-see mode to really on the 10-year Treasury each of which posted re-
cent target. That caused a drop in bond yields. The determine if the low infla- note fell to 2.33 percent sults that beat Wall Street’s
a rally in the stock markets lower yields and a weak tionary environment is re- from 2.35 percent late expectations. But it wasn’t
as investors celebrated forecast from JPMorgan ally transitory,” said Lindsey Thursday. all good news.q
the prospect of lower in-
terest rates for longer. Yet
on Thursday, in a second US retail sales fall again as consumers pull back
day of testimony before
Congress, Yellen sought to By JOSH BOAK has grown 2.8 percent over ping malls and the pride of economic activity. If their
clarify those views and said AP Economics Writer the past 12 months, a rela- local communities, have spending slows, it can drag
it would be “premature” to WASHINGTON (AP) — tively modest pace given dwindled. The rise of online down growth across the
conclude that inflation will Americans curtailed their that the sales figures aren’t shopping has left more re- broader economy.
remain weak. Fed officials shopping in June, with adjusted for inflation. tailers competing on price The economy has expand-
have previously cited big less spending at restau- Michael Dolega, a senior or striving to offer deeper ed at a tepid annual pace
drops in the cost of wireless rants, department stores economist at TD Bank, discounts — factors that of roughly 2 percent since
communications plans as and gasoline stations. The called the report “a disap- can limit overall sales fig- the Great Recession ended
a temporary factor holding spending pullback came pointment as far as the re- ures. Even former sources eight years ago. President
down prices. despite a healthy job mar- silience of the consumer is of strength in retail, like res- Donald Trump has pledged
On Thursday, Yellen said ket and suggests that eco- concerned.” taurants and auto dealers, to elevate that rate above
the low unemployment nomic growth could remain The decline reflects in part have faced weakening 3 percent. But it’s doubt-
rate would likely force em- sluggish. Retail sales fell 0.2 a transformative shift by sales in recent months. ful he can do so without a
ployers to raise pay to at- percent after declining 0.1 consumers toward Amazon The spending figures are jolt in retail spending that
tract and keep workers, percent in May, the Com- and other online retailers. closely watched because would reflect greater con-
which in turn should push merce Department said Sales at department stores, consumers account for sumer confidence and sus-
up prices.q Friday. Spending at retailers once the anchors of shop- roughly 70 percent of U.S. tained income gains.q