Wall Street climbs at opening after tepid inflation data

Traders work on the floor of the New York Stock Exchange June 2, 2017. — Reuters pic
Traders work on the floor of the New York Stock Exchange June 2, 2017. — Reuters pic

NEW YORK, Aug 11 — US stock indexes opened higher for the first time in four days today 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, US President Donald Trump said today 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 US$1 trillion (RM4.2 trillion) from the global equity markets.

“The escalation of the geopolitical situation between the US 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.”

Yesterday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the US presidential election.

The Labour Department said today its Consumer Price Index edged up 0.1 per cent in July, which was below the 0.2 per cent rise expected by economists polled by Reuters.

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

At 9.34am ET (1334 GMT/9.34pm Malaysian time), the Dow Jones Industrial Average was up 54.06 points, or 0.25 per cent, at 21,898.07, the S&P 500 was up 5.23 points, or 0.21 per cent, at 2,443.44.

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

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

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

JC Penney slumped 16.56 per cent to a record low after the retailer reported a bigger-than-expected quarterly loss.

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

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

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