Dow, S&P hit highs on slower inflation

A slowdown in inflation gave investors just what they needed to push the Dow and the S&P 500 to another record close.

The Dow rose 220 points . The S&P 500 rose 10 but the Nasdaq fell 22.

Inflation as reflected in the Consumer Price Index moderated in July after a torrid run earlier in the year. The annual gain for the CPI was 4.3 percent last month, and up just 0.5 percent month-to-month. The rate of monthly inflation slowed by the largest amount in over a year. Price tags for used cars and trucks, and airline fares, have cooled after big spikes in recent months.

The CPI data could give the Federal Reserve cover to move slowly before removing the unprecedented support its been giving to the economy by buying bonds.

Ross Gerber of Gerber Kawasaki:

"We feel that the fact that the government is buying a trillion dollars of bonds a year right now is unnecessary. And so the sooner the Fed gets started, in some ways the better. But I think because of the Delta variant and because of all the unknowns, it just doesn't make any sense for the Fed to change policy at this time."

In corporate news, Southwest Airlines warned the latest uptick in the health crisis is leading to more ticket cancellations and fewer bookings and that's putting its chances of turning a quarterly profit in jeopardy. Shares of Southwest still managed to end the day higher.

Burger chain Wendy's - beat quarterly forecasts and raised its sales outlook for the year thanks to strength during the breakfast hours. Shares of Wendy's jumped nearly 4 percent.

Shares of Vaccine makers were totally slammed. Regulators in Europe are looking into the possibility of rare new side-effects associated with vaccines using mRNA technology. Moderna's stock was the biggest loser in the S&P 500. It plunged almost 16 percent - wiping out about $30 billion in market value in one day. BioNtech also got whacked - falling 13.7 percent in Wednesday trading.