US open: Stocks struggle for direction after inflation data

US stocks fluctuated early on Friday, as investors digested a bag of mixed economic reports, including housing starts and inflation data.

Just after 1500 BST, the Dow Jones Industrial Average was down 62 points to 18,058.75, while the S&P 500 fell two points and the Nasdaq climbed 26 points.

Friday data

US inflation rose in June compared to a year ago as rents increased by the most in almost two years, data showed on Friday.

The Labor Department revealed the consumer price index (CPI) grew 0.1% year-on-year in June, up from 0% in May, as expected analysts.

On a month-on-month basis CPI climbed 0.3% in June after gaining 0.4% in May, matching forecasts.

“The uplift in core inflation pours further fuel on expectations of US rates rising by the end of the year," said Chris Williamson, chief economist at Markit.

"A rise could come as soon as September, when policymakers will have seen what’s likely to be a chunky GDP number for the second quarter.

"The economy is widely estimated to have grown at an annualised rate of at least 2.5% in the three months to June, rebounding convincingly from the soft spot seen earlier in the year."

Meanwhile,the University of Michigan sentiment gauge fell from 96.1 to 93.3 in July, short of the 95 figure economists had expected.

There was more positive news in the construction sector, as US homebuilders broke ground on 9.8% more homes in June than in the prior month, to reach an annualised pace of 1.174m against consensus of a 1.1m reading, figures released by the US Department of Commerce showed.

Google surges on earnings

In company news, Google surged 15.1% after the tech giant posted better-than-expected quarterly profit late on Thursday.

General Electric climbed 0.37% announcing earlier on Friday that its second quarter revenue and earnings beat expectations.

Technology group Honeywell International gained 2.0% after saying its second quarter profits and sales had topped Wall Street forecast.

Elsewhere, European equity markets were mixed in a tight range on Friday as investors paused for breath following healthy gains in the previous session, ahead of a German vote on Greece’s bailout deal.

“With Germany likely to approve the bailout today, negotiations on the terms of the bailout can begin, including the issue of debt relief which the IMF is insisting on in exchange for it being involved,” said Oanda’s senior market analyst Craig Erlam.

“A haircut on Greek debt is not allowed according to German Finance Minister Wolfgang Schaeuble which leaves creditors with few options on how to make Greek debt more sustainable.”

Asian markets closed mostly higher, driven by Chinese stocks, which ended the week with a two-day rally after efforts of Chinese officials to revive the market appear to have taken effect.

The dollar was largely flat against the yen but rose 0.25% against the pound and 0.31% against the euro, while gold futures declined 0.66% to $1,136.40.

Oil prices tumbled, with West Texas Intermediate lost 1.15% to $50.33 a barrel, while Brent shed 0.62% to $56.57 a barrel.