US stocks rallied for a second straight day Friday after a three-session skid to start the week, as subpar economic data tempered inflation worries.
The S&P 500 rose 1.5% to 4173.85, still down 1.4% from last Friday's record close. The Nasdaq Composite surged 2.3% to 13,429.98, while the Dow Jones Industrial Average gained almost 1.1% to close at 34,382.13.
Technology, energy, financial and cyclical stocks paced broad-based gains, while packaged food suppliers and utilities lagged. Facebook (FB) gained 3.5% and Tesla (TSLA) 3.2%.
April retail sales were virtually unchanged from March, the government reported, disappointing market expectations for a 1% gain, according to Econoday.
Industrial production's 0.7% rise in April also lagged the consensus estimate, held back by a 4.3% decline in the production of motor vehicles and parts amid a persistent semiconductors shortage, which also affected consumer goods manufacturing. The monthly numbers got a boost as more Gulf Coast plants reopened after a February storm the Fed said proved more disruptive than previously estimated, as well as from a rebound in utility output after an unseasonably warm March.
The University of Michigan consumer sentiment index posted a surprise drop to 82.8 from 88.3 in April as record near-term inflation expectations and a 10-year high in long-term inflation forecasts eroded prior gains in expectations for inflation-adjusted income. The survey was taken in early May, before Wednesday's news that the consumer price index was up 4.2% year-over-year in April, a 13-year high.
The 10-year US Treasury yield declined more than 3 basis points to 1.635%.
Walt Disney (DIS) shares shed 2.5% after the media and entertainment giant's second-quarter results beat analyst estimates, while subscriber growth at the Disney+ streaming service came in slightly below market expectations. Disney's theme parks lost some $1.2 billion in operating income in the quarter to pandemic restrictions, but with all the parks but the Paris one now reopened "we are very encouraged" by forward bookings, the chief financial officer said on the earnings conference call.
West Texas Intermediate crude oil rose $1.57 to $65.39 per barrel, while wholesale gasoline rose 1.4%. Gold gained 1.1% to $1,843.70 an ounce, while silver advanced 1.7% to $27.51 an ounce.