By Devik Jain and Ambar Warrick
(Reuters) -The S&P 500 inched to a record high on Thursday, with mega-cap technology stocks taking charge as investors weighed data showing a steady jobs market recovery against a rise in producer prices.
Alphabet Inc, Tesla Inc, Amazon.com, Nvidia Corp, Microsoft Corp, Moderna Inc and Apple Inc provided the biggest boost to the tech-heavy Nasdaq and the benchmark S&P 500 indexes.
Healthcare and technology were the best performing S&P 500 sectors.
On the other hand, economy-linked energy, industrials and materials shares declined, pulling the blue-chip Dow from record highs on the heels of multi-trillion dollar infrastructure bills.
The reversal in the sentiment came after data showed U.S. producer prices posted their largest annual increase in more than a decade, in contrast to Wednesday’s reading, which showed growth in consumer prices appeared to be slowing.
“The numbers reflect continuing supply chain challenges that are well known and I don’t believe that it changes Federal Reserve policy positioning one way or the other,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.
“Everyone is expecting potentially tapering to begin in September … but for the most part, it would not change the conducive environment that we are currently in, for additional gains in equity markets.”
Trading volumes have dwindled in recent sessions, as a stellar second-quarter earnings season winds to a close. Focus has now shifted towards the U.S. central bank’s Jackson Hole, Wyoming, meeting later this month, for clues on its potential plan to tighten policy.
“This is summer doldrums at its finest and there’s not a whole lot to do unless there’s a major headline, we’re kind of seeing the market just muddle along here,” said Thomas Hayes, managing member at Great Hill Capital in New York.
At 12:27 p.m. ET, the Dow Jones Industrial Average was down 45.14 points, or 0.13%, at 35,439.83 and the S&P 500 was up 4.72 points, or 0.11%, at 4,452.42.
The Nasdaq Composite was up 18.15 points, or 0.12%, at 14,783.28, breaking a two-day losing streak.
Micron Technology dropped 7.3% to the bottom of the S&P 500 after Morgan Stanley downgraded the stock to “equal-weight”.
In earnings-related moves, Baidu Inc’s U.S. shares dropped 4.3% even after the company posted upbeat quarterly revenue.
Palantir Technologies Inc gained 10.4% after the U.S. data analytics firm forecast third-quarter sales above expectations.
Earnings reports from Walt Disney Co, home rental firm Airbnb Inc and food-delivery firm DoorDash Inc are due later in the day.
Declining issues outnumbered advancers for a 1.37-to-1 ratio on the NYSE and for a 1.68-to-1 ratio on the Nasdaq.
The S&P index recorded 41 new 52-week highs and two new lows, while the Nasdaq recorded 67 new highs and 121 new lows.
(Reporting by Devik Jain in Bengaluru; Editing by Aditya Soni and Maju Samuel)
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