Wall Street opens higher after tepid inflation data

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 2016. REUTERS © Reuters A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 2016. REUTERS

U.S. stock indexes opened higher for the first time in four days on Friday after tepid data pointed to benign inflation that could make the Federal Reserve cautious about raising rates again this year, even as concerns lingered over rising tensions between the United States and North Korea.

Still, the S&P 500 is on track to post its biggest weekly loss in about nine months.

In his latest warning to North Korea, U.S. President Donald Trump said on Friday military solutions were “fully in place” and referred to American weapons as being “locked and loaded” should the nuclear-armed nation act “unwisely”.

The tensions, since Trump’s “fire and fury” comments on Tuesday, have wiped out nearly $1 trillion from the global equity markets.

“The escalation of the geopolitical situation between the U.S. and North Korea is beginning to rattle investors’ nerves as was witnessed in the VIX index yesterday,” said Peter Cardillo, chief market economist at First Standard Financial.

“The overall ‘Fear Factor’ is the markets worst enemy that will feed on itself, leading to increased hedging.”

On Thursday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the U.S. presidential election.

The Labor Department said on Friday its Consumer Price Index edged up 0.1 percent in July, which was below the 0.2 percent rise expected by economists polled by Reuters.

The data comes amid tepid inflation that has remained below the Fed’s 2 percent target, despite low unemployment.

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average was up 54.06 points, or 0.25 percent, at 21,898.07, the S&P 500 was up 5.23 points, or 0.21 percent, at 2,443.44.

The Nasdaq Composite was up 19.35 points, or 0.31 percent, at 6,236.22.

Seven of the 11 major S&P 500 sectors were higher, with the technology’s 0.36 percent rise leading the advancers.

Shares of Snap were off 12.48 percent following a miss on revenue and daily active users, leading to a slew of price target cuts.

J.C. Penney slumped 16.56 percent to a record low after the retailer reported a bigger-than-expected quarterly loss.

Nvidia’s quarterly revenue in its data center and automotive businesses missed estimates, dragging the chipmaker’s shares down 3.90 percent.

Declining issues outnumbered advancers on the NYSE by 1,339 to 865. On the Nasdaq, 1,378 issues rose and 892 fell. — Reuters

from Wall Street opens higher after tepid inflation data

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