US Stock Market: DJIA, S&P500 and Nasdaq turns green in early trade on Friday
- Nasdaq rose 72.20 points or 0.64% to 11,323.39
- Healthcare companies and banks saw some of the biggest gains
- The 10-year Treasury yield dipped to 2.94% from 2.96% late Thursday
Stocks were trading higher in morning trading on Wall Street Friday following a report showing consumers are still spending, despite decades high inflation. The gains were not enough to pull key indexes out of the slump for the week, following a series of disappointing reports that showed inflation remains high.
The S&P 500 rose 34.39 points or 0.91% to 3,824.77. The benchmark index is still 1.55 down for the week. The Dow Jones Industrial Average rose 347.38 points or 1.13% to 30,977.55. The Nasdaq rose 72.20 points or 0.64% to 11,323.39.
Healthcare companies and banks saw some of the biggest gains. UnitedHealth Group surged 4.3% after raising its profit outlook for the year following a strong earnings report. Citigroup climbed 8.7% after reporting strong financial results.
Bond yields fell. The 10-year Treasury yield dipped to 2.94% from 2.96% late Thursday. Inflation and its impact on businesses and consumers remain a key concern for investors. According to a government report, retail sales grew 1% in June from May, beating economists’ expectations even as prices for everything from food to clothing increased.
The encouraging retail sales report follows reports earlier this week showing that inflation remains extremely hot. It also shows a mixed picture for investors who are closely watching how the Federal Reserve deals with rising inflation.
The Fed has been raising the interest rate in a bid to slow down the economy and curb rising inflation. A strong retail sales report means that it will remain aggressive with its rate hikes. The central bank has already raised rates three times this year and traders expect another big hike at its meeting later this month.
Wall Street is concerned that the Fed could go too far in increasing rates and bring on a recession. While positive economic data is encouraging, weaker reports could give the Fed more reason to ease up on rate hikes, potentially lowering the risk of pushing the economy into a recession.
Investors have been watching the latest round of corporate earnings to gain a clearer picture of inflation's impact on businesses. Banks kicked things off with mixed results this week. Several big firms are on deck for next week, including Johnson & Johnson, Netflix, United Airlines, and Twitter.