US STOCKS-Wall Street closes higher in 'buy the dip' session

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(Updates to market close)
By Stephen Culp
NEW YORK, May 13 (Reuters) - Wall Street ended sharply
higher at the close of a broad rally on Thursday, bouncing back
from three straight days of selling on upbeat labor market data.
All three major U.S. stock indexes notched solid gains, with
the Nasdaq, weighed by Tesla Inc TSLA.O , picking up the rear.
Meanwhile, cyclical shares enjoyed the biggest gains.
Recent economic data has prompted inflation fears as
scarcity of both materials and workers threatens to send prices
surging in the face of a demand boom.
"If this is a footrace, supply chains are still tying their
shoes," said David Carter, chief investment officer at Lenox
Wealth Advisors in New York. "But they will catch up with demand
fairly quickly."
But on Thursday, investors appeared to be focusing on the
glass-half-full side of the demand/supply equation.
This was evidenced by the outperformance of small caps
.RUT , chips .SOX and transports .DJT , economically
sensitive stocks that stand to gain as the United States emerges
from the pandemic recession.
"Sectors and stocks that were hurt most significantly by
yesterday's sell-off rebounded strongly today given that
economic growth is expected to remain strong throughout the year
and any inflation is likely to be temporary," Carter added.
New applications for unemployment insurance continue to
fall, according to jobless claims data from the Labor Department
that hit a 14-month low. Labor Department data also showed producer prices surged
last month, building on the inflation surge narrative of
Wednesday's consumer prices report.
"The inflation boogeyman is back right on cue," Carter said.
"And will continue to spook markets for the coming months."
But rising prices were widely anticipated, and the U.S.
Federal Reserve has provided repeated assurances that it does
not foresee those spikes morphing into sustained, long-term
inflation.
Unofficially, the Dow Jones Industrial Average .DJI rose
445.84 points, or 1.33%, to 34,033.5, the S&P 500 .SPX gained
50.75 points, or 1.25%, to 4,113.79 and the Nasdaq Composite
.IXIC added 95.52 points, or 0.73%, to 13,127.20.
Energy stocks .SPNY lost ground, weighed by a drop in
crude prices CLc1 . O/R
Dating app owner Bumble Inc BMBL.O tumbled below its
initial public offering price, as investors remained cautious
about how quickly users will return to in-person meetings.
Shares of Walt Disney Co DIS.N oscillated throughout the
session ahead of its quarterly results expected after the
closing bell.
Boeing Co BA.N advanced after gaining approval from U.S.
regulators for a fix of an electrical grounding issue.
Tesla continued its slide after boss Elon Musk doubled down
on his sudden rejection of cryptocurrency bitcoin. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-U.S. inflation indicators https://tmsnrt.rs/33Gs6Yk
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