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August producer prices slightly above estimates

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Moderna ( MRNA ) tumbles after dour FY25 revenue forecast

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Indexes up: Dow 0.40%, S&P 500 up 0.70%, Nasdaq up 1.04%

By Sinéad Carew and Shashwat Chauhan

Sept 12 (Reuters) - Wall Street's main indexes rose on

Thursday after higher-than-expected producer prices data

reinforced expectations for a 25-basis point rate cut by the

Federal Reserve, while Moderna ( MRNA ) slumped following a downbeat

revenue forecast.

The producer price index (PPI) for final demand rose 0.2% in

August, compared with estimates for 0.1% 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.

"You continue to get data indicating that inflation is

cooling with the producer prices numbers. Also what we've seen

in the last couple of days is a willingness of investors to come

in on declines," said Chuck Carlson, CEO of Horizon Investment

Services in Hammond, Indiana. "Investors remember those

significant reversals so today there's less inclination to go

against the buying momentum."

A string of weakening employment and economic growth data

over the past few weeks had fueled some bets on a

larger-than-usual 50-bps interest rate cut by the Fed.

Those expectations faded after Wednesday's inflation report

to a 75% 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.

As of 2:11 p.m. ET the Dow Jones Industrial Average

rose 162.35 points, or 0.40%, to 41,024.06, the S&P 500

gained 39.05 points, or 0.70%, at 5,593.18 and the Nasdaq

Composite climbed 180.07 points, or 1.04%, to 17,575.60.

Most of the S&P 500 sectors were higher, led by

communication services, which rose 1.8%. The weakest

sector was real estate, down 0.04%.

The more economically sensitive small-cap Russell 2000

meanwhile outperformed, rallying 1.4%.

"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 Carlson.

Meanwhile, Moderna's ( MRNA ) stock was down 11.5% after

hitting its lowest intraday level since November. It was the

biggest decliner on the S&P 500 after the vaccine maker forecast

sales of $2.5 billion to $3.5 billion next year, below analysts'

estimates.

Micron Technology ( MU ) dropped 3% after a report that

Exane BNP Paribas downgraded the chipmaker's shares to

"underperform" from "outperform."

Kroger ( KR ) gained 6% after the supermarket chain beat

second-quarter estimates and raised the lower end of its annual

sales forecast.

Shares of gold miners jumped as spot gold hit a

record high, with the Arca Gold BUGS index up 6.3%.

Shares in Warner Bros Discovery ( WBD ) rose 8.9% on news

that Charter Communications ( CHTR ) would provide an

ad-supported version of Warner's streaming services Max and

Discovery+. Charter's shares rose 3%.

Advancing issues outnumbered decliners by a 3.39-to-1 ratio

on the NYSE where there were 333 new highs and 39 new lows.

On the Nasdaq, 2,660 stocks rose and 1,461 fell as advancing

issues outnumbered decliners by a 1.82-to-1 ratio. The S&P 500

posted 34 new 52-week highs and no new lows while the Nasdaq

Composite recorded 68 new highs and 69 new lows.