With investors hearing good news about inflation, construction and consumer spending, and the release this evening of Apple’s wildly anticipated iPhone, the stock market indices were all heading upward in Friday morning trading after the opening bell, report MarketWatch and other financial news sources.
“We’re seeing a quarter-end rally. This might continue next week given that many people will take off for the [July Fourth] holiday, and trading volumes will be low,” Paul Nolte, director of investments at Hinsdale Associates, said to MarketWatch.
The Dow Jones Industrial Average was up over 60 points a half-hour before lunch, with 25 of its 30 member companies’ stock prices rising. The S&P 500 was up 7.8 points, and the Nasdaq had risen 13.4 points at the same time.
Core personal consumption expenditures (the CPI), that gauge of inflation most favored by the Federal Reserve, increased by only 1.9 percent in the 12 months ending in May, the Commerce Department revealed in pre-trading report on Friday.
“That’s certainly a good number that suggests giving the FOMC flexibility to lower rates if conditions in the housing market weaken,” Peter Jankovskis, chief investment officer of quantitative products at OakBrook Investments LLC in Lisle, Illinois, told Reuters.
“With the FOMC meeting behind us, rates should calm down and investors should start to focus on second quarter earnings results. Today is the last day of the quarter,” Marc Pado, chief U.S. market strategist at Cantor Fitzgerald, told MarketWatch.
Construction spending was up 0.9% in May, its biggest increase in almost 18 months, driven by commercial and government projects. These projects offset the personal housing bust dragging on the economy and now expected to continue well into next year.
“The market is breathing a sigh of relief today, because this is more evidence the economy is still growing. Inflation remains in check, and that’s good news for investors,” Eric Thorne, who oversees $2.4 billion in assets at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania, told Bloomberg.
Shares of Apple rose 1.5% to over $122 a share as it prepared to release its hotly anticipated iPhone on the retail market Friday evening. The iPhone is expected to revolutionize Internet capability for portable devices and may lead to a flood of new technology products and services as a result.
Not all analysts are enthusiastic about the product, however.
“It’s easy to look and say that the iPhone is overhyped. The attention that has been given to the iPhone is probably more than the significance of the product at this point,” Andy Hargreaves, who covers Apple for Pacific Crest Securities, told MarketWatch back on June 18th.
However, Hargreaves went on to say, “It’s hard to underhype the importance of this project. If Apple captures a meaningful portion of the [cell phone] market, there’s a big opportunity for new services for them.”
MarketWatch, “Stocks rally amid end-of-quarter buying”
MarketWatchy,” IPhone battery news juices Apple shares”
Reuters, “Stocks rise on tame inflation”
Bloomberg, “U.S. Stocks Gain on Signs of Economic Growth, Slowing Inflation”