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* Salesforce jumps after raising outlook
* Boeing down on reports of 787 Dreamliner delivery halt
* S&P on pace for smallest monthly gain in four
* Dow up 0.35%, S&P 500 up 0.31%, Nasdaq up 0.45%
NEW YORK, May 28 (Reuters) - U.S. stocks climbed on Friday
as investors brushed off a stronger-than-expected inflation
reading, putting both the Dow and S&P indexes on
track to post their first weekly gain in the past three weeks.
Consumer prices as measured by the personal consumption
expenditures (PCE) price index, excluding the volatile food and
energy components, rose 0.7% in April, topping analysts' 0.6%
estimate and after a 0.4% increase in March. PCE is the Federal
Reserve's preferred measure of inflation.
In the 12 months through April, the core PCE price index
surged 3.1%, smashing through the Fed's 2% target, as the
reopening economy unleashed pent-up demand.
Investors have been closely watching economic data and
comments from Fed officials for signs of runaway inflation and
the possibility the central bank may begin to pull back on its
massive stimulus measures.
"There is a really good excuse for market participants not
to hang on to any one data point, any one reading as to a real
true indicator of direction of inflation, as well as just any
type of general economic activity," said Keith Buchanan, senior
portfolio manager at Globalt in Atlanta.
"The Fed has already started this course of introducing the
market to thinking about some of the accommodative measures."
"The data is going to remain volatile as well, the inflation
data that we saw this morning with core PCE was a high print,
but really not that far ahead of consensus," he added.
The Dow Jones Industrial Average rose 120.79 points,
or 0.35%, to 34,585.43, the S&P 500 gained 13.23 points,
or 0.31%, at 4,214.11 and the Nasdaq Composite added
61.48 points, or 0.45%, at 13,797.76.
Fed officials have repeatedly maintained in recent days that
the central bank is not ready to adjust its monetary support,
although some have suggested they are open to begin discussing
scaling back its bond-buying plan. On Thursday, Federal Reserve
Bank of Dallas President Robert Kaplan said the labor market was
tighter than many realize.
Despite the data showing a rise in inflation, U.S. Treasury
yields fell and helped lift high-growth technology
stocks. Salesforce.com Inc climbed 5.97% after raising
its full-year revenue and profit forecasts, helped by increased
demand for its cloud-based software during the pandemic.
Inflation worries have persisted in the stock market for
several weeks. Volatility has risen even as the S&P 500 has
rebounded to less than 1% below its May 7 record high, though
the index was poised for its smallest monthly gain in the past
The U.S. stock market will be closed on Monday for the
Memorial Day holiday. Analysts cautioned against drawing strong
conclusions from Friday's lightly traded market.
Boeing Co fell 1.26% after the Federal Aviation
Administration confirmed the planemaker halted deliveries of its
787 Dreamliners, adding fresh delays for customers following a
recent five-month delivery suspension due to production
Advancing issues outnumbered declining ones on the NYSE by a
1.59-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored advancers.
The S&P 500 posted 26 new 52-week highs and one new low; the
Nasdaq Composite recorded 95 new highs and 17 new lows.
(Reporting by Chuck Mikolajczak; Editing by Richard Chang)