US stocks surge, undaunted by flat retail data


Wall Street equities posted a solid rebound Friday, recovering some ground after big losses earlier in the week, despite lackluster economic data including disappointing retail sales.

While the major indices were still down for the week, good news on mask requirements offered more hope for the economic reopening and helped drive gains in travel shares.

The benchmark Dow Jones Industrial Average gained 1.0 percent to close at 34,382.13, while the broad-based S&P 500 rose 1.5 percent to 4,173.85.

The tech-rich Nasdaq Composite Index jumped 2.3 percent to finish the week at 13,429.98.

The three indices were nonetheless down by similar amounts for the week after three successive downbeat sessions beginning Monday caused by rising concerns about an inflationary spike.

Government data showed retail sales were flat in April after a surge in March, as shoppers took a break and sales in some sectors declined.

Meanwhile, supply chain bottlenecks hit US industry and manufacturing output posted a modest increase, held back by declining auto production amid a global semiconductor shortage.

The world’s largest economy has been on the upswing as widespread Covid-19 vaccinations allow businesses to reopen, and that got a boost after health authorities on Thursday eased mask requirements for people who are fully vaccinated.

Travel shares reacted to the news Friday, with Carnival Cruise Line jumping 8.3 percent, and competitor Royal Caribbean up 7.4 percent, while American Airlines gained 5.6 percent.

But the University of Michigan consumer sentiment index fell more than six points to 82.8 in May, amid increasing concerns about inflation, although Americans appear ready to continue to spend even as prices rise.

Quincy Krosby of Prudential Financial said the economy appears to be “opening at a faster clip” and the price gains that come with it may not be a problem.

“It seems as if the market is accepting that as long as it also is in concert with the economy doing better and corporate earnings doing better, it can withstand a little bit more inflation,” Krosby told AFP.

But referring to the Federal Reserve’s repeated assurances that price spikes will not last, Krosby said doubts remain.

“The biggest question is what does transitory mean? What does temporary mean and how much stickiness do we have”—AFP

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