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Wall Street Opens Higher as Growth Fears Recede; Dow up 110 Pts

Stock MarketsSep 10, 2021 15:18
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By Geoffrey Smith -- U.S. stock markets opened higher on Friday, sentiment boosted by the first call between the U.S. and Chinese presidents in seven months - even if no obvious progress was made in reducing tension between the world's two biggest economies.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 116 points, or 0.3%, at 34,995 points. The S&P 500 was up 0.4% and the Nasdaq Composite was up 0.5%.

The market shrugged off potentially negative news such as another multiyear high for producer price inflation, which accelerated to 8.3% in August from 7.8% in July, driven by a broad range of products rather than just meat and poultry, as one White House briefing this week had tried to depict. The market also shrugged off reports of Democratic senators presenting their plans to tax stock buybacks and close tax loopholes regarding remuneration of partnerships.

"The economic data continue to show sharply rising prices, which put pressure on fiscal and monetary authorities to adjust policy to prevent economic overheating," said Stephen Dover (NYSE:DOV), chief market strategist with Franklin Templeton, in a blog post before the publication of the PPI data. Comments out of the Federal Reserve this week have tended on balance to indicate that the Fed will likely signal a gradual tapering of its $120 billion monthly bond purchases from November onward.

On the upside, some market participants have been encouraged by signs that the U.S. Covid-19 infection curve is starting to dip, although that has come too late to stop three of the country's biggest airlines posting profit warnings on Thursday. Microsoft (NASDAQ:MSFT) on Thursday became the latest large-scale employer to scrap its plans to return the workforce to the office, following similar actions by a number of Big Tech and Wall Street names. 

Among the standout movers in early trading were Traeger (NYSE:COOK) stock, which gapped down 6.9% after the maker of smart grills disappointed with its first results since listing as a public company. Kroger (NYSE:KR) stock fell 7.1% after the grocery store chain also reported weak quarterly numbers. 

To the upside, Affirm (NASDAQ:AFRM) stock rose 22% after its quarterly report underlined how the buy-now-pay-later fintech is rapidly scaling up. That process is set to be accelerated even further when its intended partnership with Amazon (NASDAQ:AMZN) goes live. 

Chipmaking stocks were also in the ascendant, again, amid the ongoing shortage of their products which appears set to last well into next year. Intel (NASDAQ:INTC) stock was up 2.5% while Qualcomm (NASDAQ:QCOM) stock was up 2.9%. Both stand to gain from a relaxation of the rules in supplying high-tech components to China, a hope encouraged by the call between Joe Biden and Xi Jinping. 

Elsewhere, Peloton Interactive (NASDAQ:PTON) stock extended gains after rising 10% on Thursday in response to the company's announcement of plans for an own-apparel brand. The stock was up 5.1%. By contrast, Take Two Interactive Software stock fell 2.5% after pushing back the launch of its new iterations of Grand Theft Auto until well into next year.

Wall Street Opens Higher as Growth Fears Recede; Dow up 110 Pts

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