Wall Street rallies on crude price jump, economic data

© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

By Stephen Culp

NEW YORK (Reuters) - U.S. stocks ended higher on Wednesday as surging crude prices boosted energy shares and a swath of positive U.S. data suggested inflation has crested and the economic recovery remains robust, prompting a broad rally.

All three major U.S. stock indexes gathered strength, with economically sensitive cyclicals, smallcaps and transportation stocks leading the charge.

While value stocks initially held the advantage, the risk-on sentiment gained momentum through the afternoon, broadening to include growth stocks.

"Today is the first time in a while when both growth and value stocks are doing pretty well. It's been either or for much of the last few weeks and today it's both," said Chuck Carlson, chief executive of Horizon Investment Services in Hammond, Indiana. "Breadth matters, and that's something investors like to see."

A host of economic data showed hints of waning inflation and an ongoing return to economic normalcy, even as supply constraints, complicated by hurricane Ida, hindered factory output.

Import prices posted their first monthly decline since October 2020, in the latest sign that the wave of price spikes has crested, further supporting the Federal Reserve's position that current inflationary pressures are transitory.

Next week, the Federal Open Markets Committee's two-day monetary policy meeting will be closely parsed for signals as to when the central bank will begin to taper its asset purchases.

The graphic below shows major indicators against the Fed's average annual 2% inflation target.

Unofficially, the Dow Jones Industrial Average rose 243.93 points, or 0.71%, to 34,821.5, the S&P 500 gained 38.19 points, or 0.86%, to 4,481.24 and the Nasdaq Composite added 125.96 points, or 0.84%, to 15,163.72.

Among the 11 major sectors of the S&P 500, energy was by far the best performer, benefiting from a jump in crude prices driven by a drawdown in U.S. stocks.

U.S.-listed Chinese stocks extended recent losses, as weak retail sales data pointed to a possible economic slowdown in the mainland, while Beijing's regulatory overhaul of Macau's casino industry further dampened appetite for Chinese stocks.

This follows a series of regulatory moves by China against major technology firms, which has wiped out billions in market value this year.

"It would be tough to buy any Chinese stocks," Carlson said. "From an investor standpoint you don't know what sector is next."

"I don't think the situation is going to get better any time soon and it's probably going to spread," he added.

U.S.-based casino operators Las Vegas Sands (NYSE:LVS) Corp, Wynn Resorts (NASDAQ:WYNN) Ltd and MGM Resorts (NYSE:MGM) International closed lower.

Apple Inc (NASDAQ:AAPL) reversed its decline over recent sessions following an adverse court ruling on its business practices, and a lukewarm response to its event on Tuesday where it unveiled updates to its iPhone and other gadgets.

Lending platform GreenSky Inc surged after Goldman Sachs Group Inc (NYSE:GS) said it would buy the company in an all-stock deal valued at $2.24 billion.