Nasdaq, S&P 500 Rise To One-Month Closing Highs After Inflation Data

(RTTNews) - After ending Thursday's choppy trading session little changed, stocks saw modest strength during trading on Friday. With the upward move, the Nasdaq and the S&P 500 reached their best closing levels in a month.

The major averages gave back ground after an early advance but remained in positive territory. The Dow rose 104.05 points or 0.2 percent to 47,954.99, the Nasdaq climbed 72.99 point or 0.3 percent to 23,578.13 and the S&P 500 increased 13.28 points or 0.2 percent to 6,870.40.

For the week, the tech-heavy Nasdaq advanced by 0.9 percent, the Dow climbed by 0.5 percent and the S&P 500 rose by 0.3 percent.

The modest strength on Wall Street came following the release of closely watched consumer price inflation data that largely came in line with economist estimates.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.3 percent in September, matching the growth seen in August along with economist estimates.

The annual rate of growth by the PCE price index ticked up to 2.8 percent in September from 2.7 percent in August, which was also in line with expectations.

Excluding food and energy prices, the core PCE price index rose by 0.2 percent in September, matching the increases seen in the two previous months as well as economist estimates.

The annual rate of growth by the core PCE price index edged down to 2.8 percent in September from 2.9 percent in August. Economists had expected the annual rate of growth to remain unchanged.

The unexpected slowdown in the annual rate of core price growth reinforced recent optimism about the outlook interest rates ahead of next week's Federal Reserve meeting.

Buying interest remained somewhat subdued, however, as the Fed was already widely expected to cut rates by a quarter point.

CME Group's FedWatch Tool is currently indicating an 87.2 percent chance the Fed will lower interest rates by another quarter point next week.

Sector News

Computer hardware stocks extended the strong upward move seen during Thursday's session, with the NYSE Arca Computer Hardware Index climbing by 1.7 percent.

Significant strength was also visible among airline stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Airline Index.

Networking, semiconductor and software stocks also saw notable strength, while steel stocks showed a significant move to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index slumped by 1.1 percent, while South Korea's Kospi surged by 1.8 percent.

The major European markets also turned mixed on the day. While the German DAX Index climbed by 0.6 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index fell by 0.5 percent.

In the bond market, treasuries extended the downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.1 basis points to 4.139 percent.

Looking Ahead

Next week's trading is likely to be driven by reaction to the Fed's monetary policy decision as well as any hints about the outlook for interest rates.