US STOCKS-Wall St kicks off week higher ahead of inflation numbers

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Citigroup cuts U.S. stocks to “neutral” from “overweight”

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Carl Icahn unties personal loans from IEP’s share price

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Indexes up: Dow 0.47%, S&P 0.11%, Nasdaq 0.03%

(Updated at 11:38 a.m. ET/1538 GMT)

By Johann M Cherian and Bansari Mayur Kamdar

July 10 (Reuters) –

Wall Street’s main indexes rose on Monday, recovering losses from last week, as investors looked ahead to a key inflation report and commentary from a slew of Federal Reserve officials this week to gauge the central bank’s interest rate path.

All eyes will be on U.S. inflation data, expected on Wednesday, that will feed into the Fed’s interest rate decision later in the month. A Reuters poll of economists showed they suspect that growth in consumer prices likely slowed in June.

“This week has the potential to tip short-term momentum either way, depending how traders react to inflation data (CPI and PPI) and the first batch of Q2 earnings,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.

Citigroup strategists downgraded U.S. stocks to “neutral”, adding that megacap growth is set for a pullback and U.S. recession risks could still bite.

On Friday, Wall Street’s main indexes ended the week lower after a jobs report showed unemployment declined in June, while higher-than-anticipated wage growth pointed to a still strong labor market.

Traders still expect the U.S. central bank to raise rates by 25 basis points later this month, but are divided on the rate hike trajectory for the rest of the year.

In three separate speeches on Monday, Fed policymakers including

Michael Barr

,

Loretta Mester

and

Mary Daly

reiterated the need for more rate hikes.

The second-quarter earnings season kicks off this week and investors will assess the impact of tight monetary conditions and fears of an impending economic slowdown on businesses.

Story continues

Overall, earnings for the S&P 500 constituents are expected to fall 5.7% in the quarter, Refintiv data showed.

At 11:38 a.m. ET, the Dow Jones Industrial Average was up 157.52 points, or 0.47%, at 33,892.40, the S&P 500 was up 4.94 points, or 0.11%, at 4,403.89, and the Nasdaq Composite was up 4.62 points, or 0.03%, at 13,665.34.13,665.34

Five out of the 11 major S&P 500 sectors advanced, with industrials leading gains, rising 1.1%.

Home Depot was among the top gainers on the Dow, climbing 1.5% after Jefferies lifted its price target on the home improvement retailer.

Most megacap growth and technology stocks slid in mid-day trading, with the FANG index falling 1.3%.

Big banks such as JPMorgan Chase and Citigroup edged up, ahead of reporting earnings on Friday.

Icahn Enterprises jumped 19.0% after the investment firm said Carl Icahn and banks have finalized amended loan agreements that untie the activist investor’s personal loans from the trading price of his firm.

Chipmakers Intel and Qualcomm added over 1% each, after U.S. Treasury Secretary Janet Yellen said over the weekend that meetings with senior Chinese officials were “direct” and “productive”.

Advancing issues outnumbered decliners by a 2.18-to-1 ratio on the NYSE and a 2.42-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and four new lows, while the Nasdaq recorded 42 new highs and 33 new lows.

(Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty and Shinjini Ganguli)