LIVE MARKETS-US stocks close higher as investors turn toward value

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US STOCKS CLOSE HIGHER AS INVESTORS TURN TOWARD VALUE

Wall Street drifted to a higher close on Thursday as investors weighed a raft of fairly hot economic data and rising US oil prices against easing US Treasury yields and an extended streak of softness in AI-related stocks.

The tech-heavy Nasdaq's .IXIC gains were nominal, held in check by chip stocks .SOX, which notched their seventh straight day of declines. During those seven days, the SOX has tumbled 12.4% as investors increasingly question whether the heavily leveraged, massive AI buildout will yield the lofty results promised by believers in the nascent technology.

The SOX remains up 63.5% on the year, compared with the S&P 500's 13.1% growth over the same time period.

With value .IVX outperforming growth .IGX, buyers focused on the tried-and-true over the untried and theoretical. The Dow gained ground while the S&P 500, caught between value and growth, posted a modest gain.

Several beaten-up sectors were the day's clear outperformers, including homebuilders .SPCOMHOME, travel & leisure .SPCOMHOTL and housing .HGX, each gaining 3.5% or more.

Treasury yields moved lower, benefiting from a pivot to the relative safety of US debt.

Oil prices, which have soared since the onset of the Iran war, diverged.

Front-month WTI crude settled up 3.0% due to a large US stock draw, but Brent crude settled off 0.1% as investors considered possible US steps to ease restrictions on the world's "shadow fleet" of tankers.

A swath of economic indicators — showing hotter-than-expected PPI reading, solid retail sales and low jobless claims, for starters — painted a picture of a solid economy wrestling with price pressures; precisely the formula for Fed rate hikes.

While financial markets largely expect the central bank to raise its key policy rate by 25 basis points before the end of the year, a majority still believes that Warsh & Co will leave that rate unchanged this month, saving its next rate hike for December.

On the economic front, import prices and industrial output reports are expected before Friday's opening bell.

Here's your closing snapshot:

(Stephen Culp)

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