NEW YORK (AFP) – Wall Street closed the week on an upbeat note on Friday (Nov 12), brushing off data showing consumer sentiment fell to a 10-year low amid rising inflation.
Stocks gained ground for the second day amid a sense that investors may have overreacted to the inflation scare on Wednesday, analysts said.
The benchmark Dow Jones Industrial Average accelerated its early gain, rising 0.5 per cent to close at 36,100.31.
The broad-based S&P 500 jumped 0.7 per cent to 4,682.85, while the tech-rich Nasdaq Composite Index ended 0.8 per cent higher at 15,860.96.
The big news came when another multinational announced it was breaking up, this time pharmaceutical giant Johnson & Johnson, a Dow member and maker of the single-shot Covid-19 vaccine.
The company plans to split its consumer health arm that sells Band-Aid and Tylenol from its pharmaceutical division – the latest in a growing trend of corporate spin offs, that include General Electric and Japan’s Toshiba.
J&J shares leapt initially and closed with a modest 1.2 per cent gain.
Meanwhile, a survey from the University of Michigan released on Friday said consumer sentiment fell to a 10-year low amid concerns that growing inflation is undermining purchasing power.
Investors were spooked Wednesday following official data showing annual consumer price inflation hit a 30-year high, which could force the Federal Reserve to hike interest rates.
But economists say sentiment should recover once global supply snarls are resolved, and consumers are unlikely to pull back on spending.