US open: Dow extends gains as investors continue to digest comments from Powell
US stocks opened mostly higher on Friday after Federal Reserve chairman Jerome Powell further boosted optimism for rate cuts during his second testimony before Congress the day before.
As of 1410 BST, the Dow Jones Industrial Average was up 0.85% at 27,088.08, while the S&P 500 was ahead 0.23% at 2,999.09, while the Nasdaq Composite began the session 0.08% weaker at 8,196.40.
The Dow opened stronger with stocks looking set for another day of gains after ending a bumper session with a bang on Thursday, as the Dow hit a record high after Federal Reserve chairman Jerome Powell suggested the central bank was open to easing monetary policy earlier in the week.
Powell, who has been under pressure from the White House to cut interest rates, suggested on Thursday that the central bank had room to ease monetary policy somewhat at its next meeting and has made a strong case for lower borrowing costs in order to offset a global slump in business confidence amid America's ongoing trade war with China.
Strategists at Bank of America-Merrill Lynch said it remained "contrarian bullish" in anticipation of an 'overshoot' in credit and equity prices over coming months, but followed by an overshoot in gold before a "big top" in asset prices during the back half of the year as the bond bubble popped and central bank's "policy impotence" became apparent.
Oil prices were higher at the bell, with West Texas Intermediate up 0.10% at $60.26 and Brent Crude ahead 0.47% at $66.83, after the National Hurricane Center warned that a storm over the northeastern Gulf of Mexico that halted the area's oil production could still develop into a cyclone.
In terms of data, wholesale price inflation in the States was a tad more muted than anticipated last month with core prices holding steady for a third consecutive month.
According to the Department of Labor, final demand prices edged up at a 0.1% month-on-month pace in June for a year-on-year rate of change of 1.7%., which was exactly as expected.
At the core level, which excludes food and energy, prices were flat and if trade costs are also excluded then the rate of increase in final demand prices slipped from 2.3% for May to 2.1%.
On the corporate front, Citigroup and Chesapeake Financial will post their second-quarter figures on Friday.