Wall Street opens higher on upbeat data

Wall Street opens higher on upbeat data

A sign reading ‘Wall Street’ is seen on a building near the New York Stock Exchange (NYSE) on Wall Street on July 12, 2022 in New York City. — AFP pic

Thursday, 25 Aug 2022 11:39 PM MYT

NEW YORK, Aug 25 — US shares started the trading day on a positive note today, buoyed by encouraging economic news, even as investors are bracing for more tough inflation talk from Federal Reserve Chair Jerome Powell.

About 30 minutes into the session, the Dow Jones Industrial Average was up 0.2 per cent at 33,029.24.

The broad-based S&P 500 gained 0.7 per cent to 4,169.73, while the tech-rich Nasdaq Composite Index increased 0.9 per cent to end at 12,545.44.

Official data showed initial applications for unemployment benefits fell last week, dispelling concerns about a weakening job market, while GDP in the second quarter contracted by 0.6 per cent, much less than first reported.

Peter Cardillo of Spartan Capital said “investors have been spooked” all week by Powell’s speech Friday at the central banking symposium in Jackson Hole, Wyoming.

He noted the upward revision to GDP included improved consumption. That is a sign Americans are continuing to spend.

“I think those two macro news (items) are basically favouring somewhat of a rebound,” Cardillo told AFP.

But focus remains squarely on Powell’s speech tomorrow, where he is likely to reiterate the message that the central bank has more work to do to quell inflation, which remains at a 40-year high.

Markets in recent weeks have gained ground amid hopes the Fed would dial back its aggressive interest rate hikes, and perhaps even begin to cut next year — dismissing comments to the contrary from a steady parade of policymakers.

Kansas City Fed President Esther George, host of the Jackson Hole conference, repeated that message Thursday, telling Fox Business Network that rates are likely to rise through the end of the year until “inflation begins to meaningfully decelerate.” — AFP