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Stocks climbed higher today, even as this morning's producer price index (PPI) showed the threat of rising inflation is all too real.
A report from the U.S. Labor Department indicated producer prices rose 1.0% in March, up from 0.5% in February. On a yearly basis, wholesale inflation jumped to 4.2% – its highest reading since September 2011.
"The annual rate of PPI inflation is benefiting from strong base effects given last year's weakness at the onset of the pandemic," says Blerina Uruci, senior U.S. economist at Barclays. "But momentum in monthly increases over the past three months has also been robust, pointing at... upside risks to near-term consumer prices as demand comes back online and supply-chain bottlenecks emerge."
The data didn't shake bulls, though, with the Dow gaining 0.9% to 33,800.60 – a new high – on strength in UnitedHealth (UNH, +3.1%) and Honeywell (HON, +3.2%). The S&P 500 hit a high of its own, adding 0.8% to 4,128.80, while the Nasdaq climbed 0.5% to 13,900.19. All three indices nabbed weekly wins, the third straight for the Dow and S&P.
Other action in the stock market today:
U.S. crude oil futures fell 28 cents, or 0.5%, to settle at $59.32 per barrel.
Gold futures gave back $13.40, or 0.8%, to end at $1,744.80 an ounce.
Amazon.com (AMZN) rose 2.2% to 3,372.20, after employees at its plant in Bessemer, Alabama, voted against unionizing.
Bitcoin prices tacked on 1.1% to $58,385.80. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
A quiet day for small caps in an otherwise big year
While blue chips spent the entire day in the green, the small-cap Russell 2000 didn't find positive territory until the final minutes of trading, ending fractionally higher at 2,243.47. The index has soundly outperformed its larger-cap counterparts in 2021, up 13.6% year-to-date.
"The U.S. economy is currently trending toward high-single-digit GDP growth in 2021 as COVID-19 vaccine distribution expands and we gradually emerge from the pandemic," says Lule Demmissie, president of Ally Invest. "That environment favors small-cap names, which tend to have a more domestic focus than larger multinational firms."
Here, we call out 7 of analysts' most-loved small-cap stocks that offer compelling valuation and appear poised for impressive growth.