US stocks trade higher amid Fed chair’s stress on patience

New York: US stocks traded higher on Friday, as investors digested US Federal Reserve chair’s latest speech on a patient approach to further monetary tightening and Friday’s US consumer sentiment data.

The Dow Jones Industrial Average rose 40.01 points, or 0.15 percent, to 25,956.01. The S&P 500 was up 7.01 points, or 0.25 percent, to 2,791.50, Xinhua news agency reported.

The Nasdaq Composite Index rallied 22.80 points, or 0.30 percent, to 7,555.33.

Shares of Foot Locker rose over 5 percent around midday after the US athletic footwear and apparel retailer posted fourth-quarter earnings results that topped market forecasts.

Shares of Dell Technologies also rallied nearly 2 percent, after the computer magnate posted fourth-quarter revenue that beat Wall Street estimates, following its return to public markets on December 28, 2018.

Six of the 11 primary S&P 500 sectors traded on a high note at midday, with the health care sector nearly 1.1 percent, leading the winners among the groups.

Despite his positive outlook on the US economy based on a strong labor market, the Fed Chair Jerome Powell stressed on Thursday night the necessity of being patient, due to “some cross-currents and conflicting signals about the near-term outlook”.

Those include tightening financial conditions since last fall, slowing growth in major economies, elevated uncertainties over unresolved government policy issues, such as Brexit and recent trade negotiations.

“Given the positive outlook but also muted inflation pressures and the cross-currents I just mentioned, the Federal Open Market Committee will be patient as we determine what future adjustments to the target range for the federal funds rate may be appropriate to support our dual-mandate objectives,” Powell said at the Citizens Budget Commission 87th Annual Awards Dinner in New York City.

On the economic front, the University of Michigan consumer sentiment index slightly bounced back to 93.8 in February, up from January’s low of 91.2 due to US government shutdown, the university said in a survey released on Friday.

“Although sentiment was still above last month’s low, the bounce-back from the end of the Federal shutdown faded in late February. While the overall level of confidence remains diminished, it is still quite positive,” said Richard Curtin, chief economist of the survey, in the Friday statement.

The index of US consumer sentiment is one of the main indicators to estimate consumer confidence in the US. The survey considers 500 consumers’ outlook on the US economy.