Dow hits another record in up-and-down day of trading

Major U.S. stock indexes ended another up-and-down day of trading more or less where they started out, although a small gain nudged the Dow Jones industrial average to another record high.

The S&P 500 ended down less than 0.1%, while the Nasdaq gave back 0.3%. Treasury yields fell after a government report showed that inflation remained tame last month. That’s encouraging for investors because it suggests the U.S. economy will be able to receive more stimulus without overheating.

The S&P 500 fell 1.35 points, or less than 0.1%, to 3,909.88. The Dow Jones industrial average rose 61.97 points, or 0.2%, to 31,437.80. The Nasdaq fell 35.16 points, or 0.3%, to 13,972.53, and the Russell 2000 index of smaller companies fell 16.56 points, or 0.7%, to 2,282.44.

“Generally, the market has seen a very favorable backdrop and that likely remains the case going forward,” said Sal Bruno, chief investment officer at IndexIQ. “Inflation remains benign and there’s still going to be a pretty big stimulus package going forward.”

The yield on the 10-year Treasury note fell to 1.13% from 1.15% late Wednesday. It was as a high as 1.20% earlier this week.

The Labor Department said Wednesday that U.S. consumer prices rose 0.3% in January, led by a surge in energy. Even though the gain was the biggest monthly increase since July, inflation over the past year has remained relatively low. Over the past year, inflation is up a modest 1.4%. Core inflation, which excludes volatile food and energy costs, is also up 1.4% with core prices unchanged in January.

Investors have started watching inflation metrics more closely as Democrats in Congress prepare to inject $1.9 trillion of stimulus into the economy. U.S. businesses are starting to reopen and millions of Americans are now vaccinated, meaning there could be a surge of economic activity and therefore potential inflation. Before Wednesday’s report, Treasury yields had been climbing steadily for weeks, which is typically a sign that investors expect both the economy to get better and for inflation to increase.

“Consumer price inflation remains very tame,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.