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Investing.com — U.S. stock markets opened higher on Friday, with bargain-hunting among tech stocks conspicuous after their renewed declines on Thursday.
By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 153 points or 0.6% at 27,687 points. The S&P 500 and the Nasdaq Composite were both up 0.4%.
The market was supported by strong earnings posted after the close on Thursday by both software giant Oracle (NYSE:ORCL) and Peloton Interactive (NASDAQ:PTON), the maker of high-end exercise bikes. The reports restored confidence in the narrative that had driven the rally in the Nasdaq through the summer, namely that the disruption from the pandemic will bring accelerated benefits to companies that facilitate remote working – or working out.
Peloton stock and Oracle stock both rose 4.9%.
Earlier, participants had shrugged off figures showing stronger-than-expected inflation in the U.S. in August. The consumer price index rose 0.4% to be up 1.3% on the year. After adjusting for volatile food and energy prices, the core CPI rose 0.4% to 1.7%, its highest since April and apparently back on course toward the Federal Reserve’s target of 2.0%. Given that the Fed has now said it will tolerate an overshoot of the 2% target to compensate for the time inflation has undershot, there is effectively no reason to fear it will tighten policy as a pre-emptive step.
The index was propelled higher by surging prices for used cars – as people shun public transport – and by higher costs for moving house and the storage of household goods, testimony to the surge in housing market activity since the pandemic began.
Elsewhere, gains were relatively muted at the end of a week that has shown that prices can go down as well as up. Apple (NASDAQ:AAPL) stock rose a modest 0.1%, while Amazon (NASDAQ:AMZN) stock rose 1.0% and Microsoft (NASDAQ:MSFT) stock rose 0.7%. The ‘gigacap’ stocks have been responsible for almost all of the market’s gains through the summer, leaving them all ripe for a bout of consolidation.
Electric truck-maker Nikola continued to suffer in the wake of Thursday’s attack on it by short-seller Hindenburg Research. Nikola (NASDAQ:NKLA) stock fell another 8.0% but was on course for a 2% drop over the week, despite the announcement of General Motors (NYSE:GM)’ $2 billion investment in it earlier.
Nikola’s bigger rival in the electric vehicle space, Tesla (NASDAQ:TSLA), reversed early gains to be down 1.4%, after a report saying that it is to start exporting from its factory in Shanghai. The report suggested that sales in China, the world’s biggest EV market, were weaker than expected.