Wall Street capped its eighth straight winning week with a quiet finish Friday, following reports showing inflation on the way down and the economy potentially on the way up. The AP reports:
- The Dow slipped 18 points, or less than 0.1%.
- The S&P 500 rose 0.2%, putting it less than 1% below its record set nearly two years ago.
- The Nasdaq edged 0.2% higher.
Bristol Myers Squibb helped lift the market and rose 2% after it said it will buy Karuna Therapeutics in a cash deal valued at a total of $14 billion. That helped offset an 11.8% slump for Nike, which cut its revenue forecast for its fiscal year and dragged sharply on the Dow. The athletic giant cited weakness in China, the downsides of a stronger US dollar for exporters, and other challenges. But Wall Street's focus was squarely on a suite of economic reports released Friday. One showed the measure of inflation the Federal Reserve prefers to use slowed by more than economists expected, down to 2.6% in November from 2.9% a month earlier. It echoed other inflation reports for November released earlier in the month.
"Inflation has fallen very quickly this year, especially in the last three to five months," said Niladri Mukherjee, chief investment officer of TIAA's Wealth Management team. Over the next few months, "I think inflation will fade away in terms of top-of-mind items" as risks for financial markets. Friday's data also showed spending by US consumers unexpectedly rose during the month. While that's a good sign for growth for an economy driven mainly by consumer spending, it could also indicate underlying pressure remains on inflation. Other new reports showed orders for long-lasting manufactured goods strengthened more in November than expected, sales of new homes unexpectedly weakened, and sentiment for US consumers improved.
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