NEW YORK — U.S. stocks were modestly higher in early morning trading on Friday, as declines in health care stocks were offset by gains in technology, consumer and industrial company stocks.
The gains came a day after the Dow Jones Industrial Average closed above 27,000 points for the first time.
Investors remain focused on the Federal Reserve. The Fed is expected to cut its benchmark interest rate later this month for the first time in more than a decade to help counter slowing growth.
The Dow rose 120 points, or 0.5%, to 27,210 as of 10 a.m. ET. The Standard & Poor’s 500 index rose 0.2% and the Nasdaq composite rose 0.3%.
Health care stocks took some of the heaviest losses. Eli Lilly, AbbVie, Merck and Pfizer all fell 1% or more. Pharmaceutical companies also fell on Thursday after the White House withdrew a plan to overhaul the rebates that drugmakers pay insurers and distributors. Investors now expect drugmakers may come under renewed pressure to lower prices.
Industrial companies were doing well. DuPont, Emerson Electric and Illinois Tool Works rose 2% or more. There was positive economic data out of Europe on Friday. Industrial production rose by 0.9% in May, much more than the 0.2% gain that economists had been expecting.
Ford rose 1.9% after announcing that it would team up with Volkswagen to share costs on self-driving and electric vehicles.
Stocks have been trending higher for much of the week as investors have grown more confident that the Federal Reserve may cut interest rates for the first time in a decade as soon as the end of this month.
New U.S. government data released Thursday showed consumer prices rose in June from a year earlier. The bump in inflation wasn’t expected to give the Fed reason to reconsider whether it should lower rates. Inflation has remained muted through much of the economy’s 10-year expansion, which Federal Reserve Chairman Jerome Powell has cited as a justification for potentially lowering rates.
“With the latest inflation data uptick led by volatile categories, equity investors quickly brushed it aside and continued to relish in the afterglow of a far more dovish than expected Chair Powell as rate cut fever remains alive and well,” Stephen Innes of Vanguard Markets said in a commentary.
ENERGY: Benchmark crude oil fell 23 cents to $60.20 per barrel in New York. Brent crude oil, the international standard, lost 49 cents to $66.52 per barrel.
Ken Sweet, The Associated Press