Wall Street indexes close up; data keeps smaller Fed rate cut in view
August producer prices slightly above estimates
Moderna tumbles after dour FY25 revenue forecast
Warner Brothers Discovery rises 10% on Charter deal
Indexes up: Dow 0.58%, S&P 500 0.75%, Nasdaq 1.00%
Updates with final closing prices, latest volume data
By Sinéad Carew and Shashwat Chauhan
Sept 12 (Reuters) -Wall Street's main indexes closed higher on Thursday after the latest inflation datareinforced expectations for a 25-basis point rate cut by the Federal Reserve, while Moderna's weak revenue forecast made it the S&P 500's biggest percentage loser.
The producer price index (PPI) for final demand rose 0.2% in August, compared with estimates for0.1% growth. The core number, which strips out volatile food and energy prices, rose 0.3%, higher than the 0.2% forecast.
Separately, initial claims for state unemployment benefits stood at 230,000 for the week ended Sept. 7, in line with estimates.
"This week's data pretty much confirms that we're not likely to have a hard landing and that we're in a soft landing," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"As long as investors see that interest rate cut and a path forward for interest rate cuts they're excited about prospects in the stock market and especially the growthier sections."
A string of weakening employment and economic growth data in the past few weeks had fueled some bets on a larger-than-usual 50-bps interest rate cut by the Fed, but these bets had faded afterWednesday's inflation report.
While on Thursday the bets fluctuated, traders were still betting on a69% chance the U.S. central bank cuts rates by just 25 bps when it meets on Sept. 17-18, CME's FedWatch Tool showed. It would be the first rate cut since March 2020.
The Dow Jones Industrial Average .DJI rose 235.06 points, or 0.58%, to 41,096.77, the S&P 500 .SPX gained 41.63 points, or 0.75%, to 5,595.76 and the Nasdaq Composite .IXIC gained 174.15 points, or 1.00%, to 17,569.68.
The more economically sensitive small-cap Russell 2000 .RUT outperformedwith a 1.2% gain.
"There's probably some bargain hunting. Small caps is an area that's lagged all year and they'll tend to be rate sensitive so if rates are coming down that might have a decent impact," said Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana.
All of the S&P 500's 11 industry sectors ended higher, led by communication services .SPLRCL, which added 2%.
The sector's biggest percentage gainer was Warner Bros Discovery WBD.O, which advanced 10.4% after it announced with Charter Communications CHTR.O that the cable company would provide customers an ad-supported version of Warner's streaming services Max and Discovery+. Charter shares rose 3.6%.
Moderna MRNA.O finished down 12.4%after hitting its lowest level since November. Thevaccine maker had forecast sales of $2.5 billion to $3.5 billion next year, below analysts' estimates.
In more bullish news, KrogerKR.N shares rallied 7.2% afterthe supermarket chain beat second-quarter estimates and raised the lower end of its annual sales forecast.
Sharesof gold miners jumped as spot gold XAU= hit a record high, with the Arca Gold BUGS index .HUI rising 5.8%.
Advancing issues outnumbered decliners by a 3.45-to-1 ratio on the NYSE where there were 405 new highs and 46 new lows.
On the Nasdaq, 2,665 stocks rose and 1,543 fell as advancing issues outnumbered decliners by a 1.73-to-1 ratio. The S&P 500 posted 37 new 52-week highs and no new lows while the Nasdaq Composite recorded 73 new highs and 76 new lows.
On U.S. exchanges 10.58 billion shares changed hands compared with the 10.82 billion moving average for the last 20 sessions.
Reporting by Sinéad Carew in New York, Shashwat Chauhan and Lisa Mattackal in Bengaluru; Editing by Maju Samuel, Shounak Dasgupta and Richard Chang and David Gregorio
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