Producers of metals and other raw materials rose after surprisingly strong inflation data.
The consumer price index rose 7% in December, the strongest increase since 1982, according to the Labor Department.
For some companies in the materials and industrials sectors, inflation could mean "inflated earnings," as price increases are passed onto customers, said Eric Marshall, president of mutual-fund firm Hodges Capital.
For the production of specialized materials such as steel rebar, for example, capacity is constrained and unlikely to expand to meet increased demand, said Mr. Marshall.
"The cost to build a new rebar plant has gone up exponentially -- the cost of land, labor, concrete, steel, all the things that go into building new steel plant has gone up," said Mr. Marshall. "Demand is surging and supply remains tight."
Steelmaker Nucor plans to build a $2.7 billion mill to produce sheet steel in Mason County, West Virginia.
Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank will need to move more aggressively on rate rises this year as it seeks to stem an inflation surge, adding that the inflation rate could ebb to 3% by the end of the year.
"Inflation is not slowing down just yet, but the peak is getting close," said Edward Moya, senior market analyst at foreign-exchange brokerage OANDA Group, in a note to clients.
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(END) Dow Jones Newswires