Thu, 24 Jun 2021

NEW YORK, May 15 (Xinhua) -- U.S. stocks pulled back for the week as a key inflation gauge showed higher-than-expected price pressures, spooking investors.

For the week ending Friday, the Dow fell 1.1 percent, the S&P 500 slipped 1.4 percent, and the tech-heavy Nasdaq slid 2.3 percent.

The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, logged a weekly decline of 6.7 percent.

For Wall Street, it was a volatile week featuring both steep daily losses and significant rebounds. The Dow shed nearly 1,200 points from Monday to Wednesday, while the S&P 500 and the Nasdaq slumped 4 percent and 5 percent, respectively, during that period. The major averages managed to recoup some of their previous losses from Thursday to Friday.

A stronger-than-expected jump of the U.S. consumer price index (CPI) in April reignited concerns over inflation.

U.S. consumer prices rose 0.8 percent in April, with a 12-month increase of 4.2 percent, the U.S. Labor Department reported Wednesday.

This marked the largest 12-month growth since a 4.9-percent increase for the period ending September 2008, according to the report.

The readings were higher than market estimates, triggering fears that the Federal Reserve may need to retreat from its easy money policy earlier than anticipated.

Fed officials have, until now, insisted price increases will be transitory, though they did not know how big these transitory increases would be.

While the path of inflation is difficult to predict, there are a variety of reasons to expect an increase in inflation associated with reopening that is "largely transitory," Federal Reserve governor Lael Brainard said Tuesday.

"I will remain attentive to the risk that what seem like transitory inflationary pressures could prove persistent as I closely monitor the incoming data," Brainard said.

"Should this risk manifest, we have the tools and the experience to gently guide inflation back to our target," said the senior Fed official.

UBS Global Wealth Management's Chief Investment Officer Mark Haefele said that "higher inflation is likely to remain in the spotlight as the post-pandemic recovery accelerates."

"While we expect inflation fears to generate bouts of volatility, and we continue to position for reflation, we also see such market swings as an opportunity to build exposure to structural winners," Haefele said in a note this week.

Meanwhile, investors digested mixed messages in the U.S. labor market.

U.S. initial jobless claims, a rough way to measure layoffs, stood at 473,000 in the week ending May 8, a decrease of 34,000 from the previous week's revised level, the Department of Labor reported on Thursday. The reading marked a fresh pandemic-era low.

The nation's April employment report released in early May by the Labor Department showed U.S. employers added 266,000 jobs in April, with the unemployment rate little changed at 6.1 percent. The monthly jobs report fell well short of Wall Street's forecast of about 1 million new jobs.

On another economic front, U.S. retail sales stood at 619.9 billion U.S. dollars in April, unchanged from the previous month, the Department of Commerce reported on Friday. Economists polled by Dow Jones and The Wall Street Journal had forecast a 0.8-percent increase.

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