U.S. stocks rose broadly on Wednesday with the S&P 500 index hitting a five-month high, after latest data backed the Federal Reserve's patient stance on future interest rate hikes. Producer prices barely rose in February, resulting in the smallest annual increase in more than 1-1/2 years, yet another indication of benign inflation.
"It's a risk-on trade and a lot of it has to do with the continued muted inflation that we're seeing from yesterday's CPI and today's PPI. That gives investors confidence that the Fed is going to remain dovish," said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada. Boeing Co pared gains to trade flat after Canada became the latest country to ground the company's best-selling 737 MAX jets following a second fatal crash in months.
Shares of the world's largest planemaker have fallen in the past seven sessions and took their biggest beating this week after the crash. Technology shares rose 1.08 per cent and provided the biggest boost to the benchmark S&P 500. The sector was propped up by Microsoft Corp and Apple Inc .
"The rally in tech stocks shows investors are confident that a trade deal will get done, it's just a matter of when," Nauman said. Adding to the upbeat mood was expectations that British lawmakers were set to stave off the threat of a no-deal exit from the European Union after a second defeat for Prime Minister Theresa May's divorce treaty left Britain heading into the unknown.
At 12:49 p.m. ET, the Dow Jones Industrial Average was up 166.59 points, or 0.65 per cent, at 25,721.25. The S&P 500 was up 23.67 points, or 0.85 per cent, at 2,815.19 and the Nasdaq Composite was up 68.03 points, or 0.90 per cent, at 7,659.06. Other data showed that new orders for key U.S.-made capital goods rose by the most in six months in January and shipments increased, pointing to solid business spending on equipment at the start of the year.
CVS Health Corp rose 3.6 per cent and was among the biggest gainers on the S&P after Bernstein started coverage of the pharmacy benefit manager with an "outperform" rating. Advancing issues outnumbered decliners by a 2.82-to-1 ratio on the NYSE and by a 1.97-to-1 ratio on the Nasdaq.
The S&P index recorded 57 new 52-week highs and no new low, while the Nasdaq recorded 59 new highs and 26 new lows.
(With inputs from agencies.)