US EQUITIES – Slowing inflation growth pushes Dow, S&P to all-time highs

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* US CPI growth slows in July

* Coinbase Global Jumps on Posting Positive Q2 Profits

* Virgin Galactic drops as MS downgrades to underweight

* Dow up 0.62%, S&P 500 up 0.25%, Nasdaq down 0.16% (updates prices, market width, volume)

NEW YORK, Aug. 11 (Reuters) – The Dow Jones Industrial Average and S&P 500 closed at record levels on Wednesday as data indicated that US inflation growth may have peaked, while sectors tied to economic growth advanced after passing a large infrastructure bill.

The Labor Department said the consumer price index rose 0.5% last month, after rising 0.9% in June, the biggest decline in month-on-month inflation in 15 months, raising concerns about the potential for runaway inflation was eliminated.

Certainly, the numbers show more slowing, said Steven Ricchiuto, chief US economist at Mizuho Securities USA LLC in New York.

This number is going to put the Fed in a bit of a tough spot because they’ve gone out with all this rhetoric about tapering, about tightening rates, about being defensive and the inflation numbers aren’t quite where they should be, but let it be. they certainly don’t see this thing has gotten out of hand.

Investors have been well aware of inflationary pressures in recent months, fearing that continued price increases could prompt the Federal Reserve to begin unwinding its ultra-accommodative policy stance earlier than expected.

Esther George, president of the Kansas City Federal Reserve, said on Wednesday that with the US economy growing at a robust pace, it indicates it is time to roll back the institutions. In addition, Robert Kaplan, president of the Dallas Federal Reserve, said the central bank would announce its timetable to reduce its massive bond holdings next month, with winding down from October.

The Dow Jones Industrial Average rose 220.3 points or 0.62% to 35,484.97, the S&P 500 gained 10.95 points or 0.25% to 4,447.7 and the Nasdaq Composite fell 22.95 points or 0.16 % to 14,765.14.

After the US Senate passed a $1 trillion bipartisan infrastructure package on Tuesday, an additional $3.5 trillion budget plan filled with new domestic programs was also approved by the legislative body, but disagreements within the Democratic party threatened the size and scope of the spending. .

Shares of equipment maker Caterpillar Inc rose 3.55% and were the biggest boost for the Dow and peer Deere & Co gained 2.51%. Also higher soared building materials supplier Vulcan Materials Co, up 3.24% and steelmaker Nucor Corp, up 3.91%, building on gains in the previous session on expectations to benefit from infrastructure projects.

Materials and industrials and services outperformed the 11 major S&P sectors.

Technology stocks rose from previous lows in the wake of a strong 10-year bond auction, which lowered yields after a five-day streak of gains amid optimism about a stronger economic reopening.

NortonLifeLock Inc rose 8.70% after the cybersecurity firm agreed to buy London-listed rival Avast for up to $8.6 billion.

Coinbase Global Inc climbed 3.24% after the cryptocurrency exchange beat market estimates for second-quarter earnings, aided by a nearly 38% jump in trading volumes on a sequential basis.

Virgin Galactic plunged 12.67% after Morgan Stanley lowered its stock to an equal weight underweight, signaling a prolonged period of no flights.

The number of emerging issues surpassed the number of declining issues on the NYSE by a 2.08-to-1 ratio; on Nasdaq, the 1.15-to-1 ratio was favorable for advanced traders.

The S&P 500 posted 56 new highs in 52 weeks and 1 new lows; the Nasdaq Composite recorded 94 new highs and 112 new lows.

Volume on US stock exchanges was 8.62 billion shares, compared to the full-session average of 9.55 billion over the past 20 trading days. (Additional reporting by Herbert Lash; editing by Diane Craft)