S&P 500, Nasdaq resume their advances; Disney drags on Dow

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(Reuters) – The S&P 500 and the Nasdaq inched higher on Thursday, with chipmakers helping the indexes resume their climb after hotter-than-expected inflation reports dampened investor sentiment and halted a streak of record closing highs.

Walt Disney Co, falling in the wake of a disappointing earnings report, dragged the Dow into the red.

“We’re seeing a rebound from yesterday’s sell-off, which I thought was exaggerated,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.

“This story has not changed much, we’re going to continue to make improvements in the economy, to have pretty strong earnings growth,” Pursche added. “Yes, there are going to be COVID-related headwinds, but those are going to disappear.”

The bond market was closed in observance of Veterans Day, and in the absence of economic data and with third-quarter earnings season winding down, there were few catalysts to move markets in either direction.

Investors were favoring growth over value, and economically sensitive smallcaps and chips were outperforming the broader market.

The Philadelphia SE Semiconductor index gained 1.9%, bouncing back from its worst session in more than six weeks, driven by gains in Nvidia Corp after brokerage Susquehanna raised the chipmaker’s price target.

Market participants were digesting recent inflation data, which suggested that the current wave of price spikes due to chronic worldwide supply challenges could have more staying power than many – including the U.S. Federal Reserve – had hoped.

With consumer sentiment data expected tomorrow and a string of retailers due to report quarterly earnings over the next few weeks, focus is shifting to consumer spending as the holiday shopping season approaches.

The Dow Jones Industrial Average fell 136.4 points, or 0.38%, to 35,943.54, the S&P 500 gained 8.15 points, or 0.18%, to 4,654.86 and the Nasdaq Composite added 107.92 points, or 0.69%, to 15,730.63.

Among the 11 major sectors of the S&P 500, utilities were down the most, while materials led the gainers.

Shares of Walt Disney Co sank 6.3% and were the heaviest drag on the Dow following its disappointing earnings release, in which the media company reported shortfalls in streaming subscribers and theme park revenues.

Electric automaker Rivian Automotive Inc’s shares jumped 15.1% a day after closing 29.1% above its offer price in its debut as a publicly traded company.

Rival Lucid Group Inc’s shares jumped by 9.6%.

But Tesla Inc slipped 0.8% following news that CEO Elon Musk sold about $5 billion of the stock in the company over the last few days, following his infamous Twitter poll on whether he should shed 10% of his shares in the firm he founded.

Dillard’s Inc surged 11.2% after handily beating quarterly earnings and revenue forecasts. Fellow department stores Macy’s Inc, Nordstrom Inc and Kohl’s Corp, which have yet to report quarterly results, rose between 1% and 4.5%.

Luxury fashion accessories firm Tapestry Inc gained 10.2% boosted its annual sales forecast and announced a $1 billion share buyback plan.

Advancing issues outnumbered declining ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 99 new highs and 112 new lows.

(Reporting by Stephen Culp; additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Diane Craft)