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Wall Street heads higher as markets await inflation signals

·4-min read
Tesla shares tumbled after Elon Musk's Twitter followers voted in favor of him selling shares of his company (AFP/Frederic J. BROWN)

Wall Street powered to new records on Monday as traders cheered the passage of a US infrastructure overhaul in what was otherwise a mixed day of trading for global stocks, punctuated by drama Elon Musk stirred up with another controversial tweet.

Though the gains were not particularly large, the Dow, Nasdaq and S&P 500 closed at all-time highs for the second day in a row after the US Congress passed a $1.2 trillion overhaul of the country's road, bridges and other infrastructure.

Across the Atlantic, Paris' CAC 40 finished higher but London's FTSE 100 and Frankfurt's blue-chip Dax index closed flat.

Asian markets were also mixed.

Markets had surged Friday after a blockbuster US job report, which showed recovery was well underway in the world's top economy.

"It's a new week, yet the same picture of resiliency is taking shape," Patrick O'Hare of Briefing.com said, noting that the infrastructure bill "has provided underlying support along with the continuance of the momentum trade."

Investors are now awaiting vital US consumer price inflation data due Wednesday, preceded by the producer price index on Tuesday.

"The big risk is if we see (a) massive spike in US (consumer price index) inflation -- unlikely, but not totally out of question," said Fawad Razaqzada, analyst at ThinkMarkets.

Fed Vice Chair Richard Clarida issued the clearest signal yet that the US central bank is preparing the way for further steps to contain inflation and normalize monetary policy after last week announcing it would begin cutting back its pandemic stimulus.

"While we are clearly a ways away from considering raising interest rates," Clarida said he believes the "necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022."

Tesla stood out as its price sank after Twitter users voted in a poll Musk posted on his social media account that the electric car giant's founder should sell 10 percent of his shares.

Bitcoin surged above $66,000 to near its record peak on feverish demand, as the combined value of all cryptocurrencies topped $3 trillion, according to data provider CoinGecko.

- Europe stocks 'subdued' -

Oil rallied further after OPEC and other major producers refused to heed US calls last week to ramp up output to meet a surge in demand.

"European markets have seen a subdued start to the week, with little directional bias one way or the other," said Michael Hewson, chief market analyst at CMC Markets UK, just before markets closed in London, Frankfurt and Paris.

Optimism continues to be held back by worries about inflation, which has surged this year owing to a pick-up in demand, a spike in energy prices and supply chain snarls -- forcing central banks around the world to start rowing back their massive pandemic-era support measures.

But Clarida repeated the Fed's view that the price pressures would fade once supply chain issues and labor shortages are worked out.

- Key figures around 2145 GMT -

New York - Dow: UP 0.3 percent at 36,432.22 (close)

New York - S&P 500: UP 0.1 percent at 4,701.70 (close)

New York - Nasdaq: UP 0.1 percent at 15,982.35 (close)

London - FTSE 100: DOWN 0.5 percent at 7,300.40 (close)

Frankfurt - DAX: DOWN 0.05 percent at 16,046.52 (close)

Paris - CAC 40: UP 0.09 percent at 7,047.48 (close)

EURO STOXX 50: DOWN 0.24 percent at 4,352.53 (close)

Tokyo - Nikkei 225: DOWN 0.4 percent at 29,507.05 (close)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 24,763.77 (close)

Shanghai - Composite: UP 0.2 percent at 3,498.63 (close)

Euro/dollar: UP at $1.1587 from $1.1567 at 2100 GMT Friday

Pound/dollar: UP at $1.3565 from $1.3498

Euro/pound: DOWN at 85.40 pence from 85.69 pence

Dollar/yen: DOWN at 113.22 from 113.41 yen

Brent North Sea crude: UP 1.1 percent at $83.68 per barrel

West Texas Intermediate: UP 1.3 percent at $82.29 per barrel

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