WASHINGTON (dpa-AFX) - After showing a lack of direction early in the session, stocks have moved modestly higher over the course of the trading day on Friday. The major averages have all moved to the upside, with the Dow and the S&P 500 reaching new record intraday highs.
In recent trading, the major averages have reached new highs for the session. The Dow is up 144.41 points or 0.4 percent at 38,193.54, the Nasdaq is up 20.97 points or 0.1 percent at 15,531.47 and the S&P 500 is up 11.84 points or 0.2 percent at 4,906.00.
The modest strength that has emerged on Wall Street comes following the release of a Commerce Department report showing a bigger than expected slowdown in the annual rate of core consumer price growth in the month of December.
The Commerce Department said consumer prices in December were up by 2.6 percent compared to the same month a year ago, unchanged from November and in line with economist estimates.
Meanwhile, the report said the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.9 percent in December from 3.2 percent in November. Economists had expected core price growth to decelerate to 3.0 percent.
The annual inflation readings, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's monthly report on personal income and spending.
'Today's inflation report gives the Fed a path to cut interest rates,' said Larry Tentarelli, Chief Technical Strategist, Blue Chip Daily Trend Report. 'Based on strong recent GDP data and jobs data, we expect the first rate cut to be in the May-June period.'
He added, 'If jobs and or economic data softens a bit and inflation continues to drop quickly, that could increase the chances of a rate cut in March, but that is not our base case yet.'
However, a steep drop by shares of Intel (INTC) has limited the upside for the markets, with the semiconductor giant plunging by 10.7 percent,
Intel is under pressure after reporting better than expected fourth quarter results but providing disappointing first quarter guidance.
Meanwhile, shares of American Express (AXP) have surged by 8.5 percent after the financial services company reported fourth quarter results that missed estimates but forecast strong results in 2024.
Sector News
While most of the major sectors are showing only modest moves, telecom stocks are seeing significant strength, with the NYSE Arca North American Telecom Index climbing by 1.6 percent.
Oil service stocks are also seeing notable strength amid a modest increase by the price of crude oil, as reflected by the 1.1 percent gain being posted by the Philadelphia Oil Service Index.
On the other hand, airline stocks have come under pressure on the day, dragging the NYSE Arca Airline Index down by 1.6 percent.
Semiconductor stocks are also seeing considerable weakness amid the steep drop by Intel, resulting in a 1.6 percent slump by the Philadelphia Semiconductor Index.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan's Nikkei 225 Index slumped by 1.3 percent, while China's Shanghai Composite Index inched up by 0.1 percent and South Korea's Kospi rose by 0.3 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has surged by 2.2 percent, the U.K.'s FTSE 100 Index is up by 1.5 percent and the German DAX Index is up by 0.1 percent.
In the bond market, treasuries have moved modestly lower after seeing early volatility. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.9 basis points at 4.151 percent.
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