By Geoffrey Smith
Investing.com — U.S. stock markets opened higher on Friday, correcting modestly ahead of the weekend after three days of selling since the Federal Reserve tilted toward tapering its bond purchases as early as this year.
By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 98 points, or 0.3% at 34,992 points. The S&P 500 was up 0.5% and the Nasdaq Composite was up 0.7%.
The market was cheered by comments from Robert Kaplan, president of the Dallas Federal Reserve and one of the Fed’s more hawkish members, as saying that policy-makers may need to revise their opinions about timing the withdrawal of monetary stimulus if the spread of the Delta variant of the Covid-19 virus results changes consumer and business behavior again.
Kaplan told Fox News that the situation was “unfolding rapidly.”
“So far it’s not having a material effect” on much consumer behavior, he said, although last week’s data showed a sharp drop in consumer confidence. But “it is having an effect in delaying return to office, it’s affecting the abilty to hire workers because of fear of infection,” and may be affecting production output, Kaplan argued.
Investors have fretted for much of the week that the Fed could withdraw support just as the economy starts to lose momentum again, The seven-day average for new Covid-19 cases in the U.S. hit its highest since February this week, while the country also had its worst day for Covid deaths since April. Additionally, reports of sustained snarl-ups in supply chains due to China’s efforts to bring the virus under control are threatening to ensure that shortages of many goods, especially electronics, continue into the U.S. holiday season.
Chipmaker Nvidia’ (NASDAQ:NVDA)s stock was one of the most conspicuous gainers, rising 2.6% after a routine disclosure showing that House Speaker Nancy Pelosi had bought up to $1.5 million in stock and call options on the company. That news is arguably of less material importance to the company than the publication of a review by U.K. antitrust authorities saying its proposed acquisition of chip designer ARM from Softbank (OTC:SFTBY) would seriously damage competition. The news makes the deal for U.K.-based ARM less likely to be completed, substantiating widespread expectations of that regulators may block it.
Foot Locker (NYSE:FL) stock rose 9.0% after strong earnings through July showed that the company has largely absorbed the shock of major suppliers Nike (NYSE:NKE) and Adidas (OTC:ADDYY) trying to shift business to direct sales online.
On the downside, Deere&Company (NYSE:DE) stock fell 2.5% despite beating expectations, while Snowflake (NYSE:SNOW) stock fell as much as 11%, amid reports of a note from Cleveland Research warning of increased pressure on its sales from the likes of Google (NASDAQ:GOOGL).
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