U.S. Stocks Mostly Higher Following Upbeat Apple Earnings, Inflation Data

After ending yesterday’s volatile session mostly higher, stocks are seeing further upside during trading on Friday. The tech-heavy Nasdaq is leading the charge, further offsetting the sharp pullback seen during Monday’s session.

Currently, the Nasdaq and the S&P 500 are just off their highs of the session. The Nasdaq is up 246.30 points or 1.3 percent at 19,928.05 and the S&P 500 is up 39.32 points or 0.7 percent at 6,110.49.

The narrower Dow, on the other hand, has pulled back well off its best levels and is up by just 13.93 points or less than a tenth of a percent at 44,896.06.

The rally by the Nasdaq partly reflects a positive reaction to earnings news from tech giant Apple (AAPL), which reported fiscal first quarter results that exceeded analyst estimates on both the top and bottom lines.

Shares of Apple have given back ground after reaching their best intraday level in almost a month but currently remain up by 1.5 percent.

Buying interest has also been generated in reaction to a closely watched Commerce Department report showing consumer prices in the U.S. increased in line with economist estimates in the month of December.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent in December after inching up by 0.1 percent in November. The increase matched expectations.

The annual rate of growth by the PCE price index accelerated to 2.6 percent in December from 2.4 percent in November, which was also in line with estimates.

Excluding food and energy prices, the core PCE price index crept up by 0.2 percent in December following a 0.1 percent uptick in November. The core price growth also matched expectations.

The annual rate of growth by the core PCE price index came in at 2.8 percent in December, unchanged from the two previous months and in line with estimates.

“Inflation base effects are much friendlier in the next four months than they were in the last four,” said FHN Financial Chief Economist Chris Low. “Inflation should drop.”

“Even if it does, however, the Fed is not likely to cut rates again until May at the earliest and more likely June,” he added. “If inflation does not drop, the Fed will leave rates where they are. A lot is riding on the next few reports.”

The inflation readings, which are preferred by the Federal Reserve, were included in a report on personal income and spending.

Sector News

Networking stocks are turning in some of the market’s best performances on the day, with the NYSE Arca Networking Index surging by 2.8 percent.

Significant strength is also visible among semiconductor stocks, as reflected by the 2.1 percent jump by the Philadelphia Semiconductor Index.

While Intel (INTC) has moved to the downside after providing disappointing guidance, semiconductor equipment maker KLA-Tencor (KLAC) is posting a standout gain after reporting better than expected fiscal second quarter results.

Strength among computer hardware and software stocks is also contributing to the jump by the Nasdaq, while oil stocks are under pressure after Chevron (CVX) reported weaker than expected fourth quarter earnings.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan’s Nikkei 225 Index edged up by 0.2 percent and Australia’s S&P/ASX 200Index climbed by 0.5 percent, while South Korea’s Kospi slid by 0.8 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index is up by 0.5 percent, the U.K.’s FTSE 100 Index is up by 0.4 percent and the German DAX Index is up by 0.3 percent.

In the bond market, treasuries have shown a lack of direction over the course of the session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 4.514 percent.

Business News