By Christiana Sciaudone
Investing.com -- U.S. stock markets opened higher Friday, building on strong gains Thursday, as investors digested the Federal Reserve's policy shift and data showing that consumer spending grew more than expected last month.
By 09:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 65 points or 0.23%. The S&P 500 rose 0.14% and the Nasdaq Composite increased 0.52%.
The Dow is at its highest level since Feb. 21, while the S&P 500 is having its best week in two months Both the S&P and the Nasdaq are on course for their fifth-straight positive week.
U.S. consumer spending increased more than expected in July. The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 1.9% last month, after jumping 6.2% in June. Economists polled by Reuters had forecast consumer spending gaining 1.5% in July.
The core PCE price index posted a rise of 0.3% versus the expected 0.5%, with an annual rate of 1.3% for July, higher than the estimated 1.2%.
Powell unveiled an update on the Fed's policy framework on Thursday, saying the central bank will adopt an “average inflation” target that could allow inflation to run above its 2% target.
Fresh stimulus from U.S. policymakers remains elusive, as House Speaker Nancy Pelosi said Thursday that the Democrats and the White House are at a “tragic impasse” after a call with White House Chief of Staff Mark Meadows.
Oil prices were largely unchanged Friday, with Hurricane Laura losing strength after blowing through Louisiana and Texas, the heart of the U.S. oil industry, without causing major damage to refineries.
Coca-Cola (NYSE:KO) rose slightly after offering voluntary separation to at least 4,000 employees as it reorganizes its business.
Dell and HP (NYSE:HPQ) rose as earnings beat expectations on strong computer demand. Gap Inc (NYSE:GPS) was higher after reporting better-than-expected results, and Ulta Beauty Inc (NASDAQ:ULTA) rose on profit that exceeded estimates.
-- Reuters contributed to this report.