Technology companies lead US stocks higher in early trade

Investors weighed new remarks from Federal Reserve Chairman Jerome Powell, who said that he expects the Fed to gradually raise interest rates if the U.S. economic expansion remains strong. (Pixabay Photo)

U.S. stocks climbed broadly higher in midday trading Friday, reversing all the market’s losses from a day earlier. Technology companies accounted for much of the market’s gain. Energy stocks rose as oil prices continued to rally. Several retailers fell after issuing disappointing earnings or outlooks.

Investors weighed new remarks from Federal Reserve Chairman Jerome Powell, who said that he expects the Fed to gradually raise interest rates if the U.S. economic expansion remains strong.

KEEPING SCORE: The S&P 500 rose 17 points, or 0.6 per cent, to 2,874 as of 11:37 a.m. Eastern Time. The Dow Jones Industrial Average gained 149 points, or 0.6 per cent, to 25,806. The Nasdaq composite climbed 67 points, or 0.9 per cent, to 7,945. The Russell 2000 index of smaller-company stocks picked up 7 points, or 0.4 per cent, to 1,724. The indexes are all on track to finish the week with a gain.

FED TALK: Speaking at an annual conference of central bankers in Jackson Hole, Wyoming, Powell said the central bank recognizes that the path of inflation is so uncertain that it generally needs to strike a balance between being supportive of growth and being restrictive. Powell said this gradual approach is the wisest policy for the Fed in trying to navigate between the risks of raising rates too fast and thus “needlessly shortening the expansion” and moving too slowly and risking an overheated economy.

THE QUOTE: “The equity markets wanted to hear that slow-and-steady is the path, and I didn’t hear anything to the contrary,” said Rob Eschweiler, global investment specialist at J.P. Morgan Private Bank.

TECH RALLY: Investors continued to bid up technology sector stocks. Software maker Autodesk surged 14.3 per cent to $155.77 after issuing a better-than-expected quarterly report and strong forecasts.

MIXED RESULTS: Ross Stores rebounded from an early slide, adding 0.9 per cent to $95.84. The discount retailer reported quarterly results that beat financial analysts’ expectations, but also said higher freight costs, investment in its business and other expenses increased.

TROUBLING TREND: Gap slumped 11 per cent to $28.88 after the clothing chain said sales at Gap stores fell in the second quarter compared to a year earlier.

DISAPPOINTING OUTLOOK: Hibbett Sports sank 29.8 per cent to $20.63 after the retailer cut its fiscal year profit and sales forecasts following a weak second quarter.

ENERGY: Benchmark U.S. crude gained 1.8 per cent to $69.08 per barrel in New York. It’s up 5.9 per cent this week. Brent crude, used to price international oils, rose 1.8 per cent to $76.11 per barrel.

The latest increase in oil prices helped boost energy stocks. ConocoPhillips gained 1.5 per cent to $73.11.

BOND YIELDS: Bond prices rose. The yield on the 10-year Treasury fell to 2.81 per cent from 2.82 per cent late Thursday.

CURRENCIES: The dollar fell to 111.17 yen from 111.28 yen late Thursday. The euro strengthened to $1.1628 from $1.1536.

MARKETS OVERSEAS: In Europe, Germany’s DAX rose 0.2 per cent, while the CAC 40 in France added 0.3 per cent. The FTSE 100 index of leading British shares gained 0.2 per cent. In Asia, Japan’s Nikkei 225 stock index closed 0.9 per cent higher. The Kospi in South Korea rose 0.5 per cent. Hong Kong’s Hang Seng lost 0.4 per cent.