By Geoffrey Smith
Investing.com -- U.S. stock markets opened Friday markedly higher, shrugging off any concerns about a faster tightening of monetary policy by the Federal Reserve to rein in raging inflation.
By 9:45 AM ET (1445 GMT). the Dow Jones Industrial Average was up 153 points, or 0.4% at 35,907 points. The S&P 500 was up 0.5% and the Nasdaq Composite was up 0.3%.
Earlier, the Bureau of Labor Statistics had said the annual rate of inflation rose to its highest level in nearly 40 years in November, hitting 6.8%. While that was distorted to a degree by upheavals in prices a year ago due to the pandemic, the core rate -- which strips out more volatile food and energy prices - also hit a 30-year high of 4.9%. The headline rate rose by 0.8% on the month and the core rate by 0.5%, both chunky increases that suggest that companies are still able to pass on higher costs to their customers more or less at will.
"Airfares and hotel room rates came roaring back," said Grant Thornton Chief Economist Diane Swonk via Twitter (NYSE:TWTR). "This reflects the surge in holiday travel." She also pointed to the relative lack of Black Friday discounts this year which hit home in annual price comparisons with last year's holiday season. Apparel retailers in particular had warned in their third-quarter numbers that they were suffering shortages of product due to long factory closures in Asia in the summer because of Covid-19.
Ian Shepherdson, chief economist with Pantheon Macroeconomics, said in a note to clients that while headline inflation may have peaked (wholesale gasoline prices are down some 15% from their October peaks) but warned that core inflation has further to rise and may yet hit 7% by February. He pointed to a succession of solid increases in rents that are pushing the shelter part of the price index higher.
Among individual movers, Oracle (NYSE:ORCL) stood out with a 17% gain after a strong quarterly update after the bell on Thursday, while chipmaker Broadcom (NASDAQ:AVGO), up 9.4%, and wholesaler Costco (NASDAQ:COST),up 3.8%, also both profited from robust quarterly numbers.
Going in the other direction was Chewy (NYSE:CHWY) stock, which fell 8.5% after the company reported a second straight disappointment on the bottom line, failing to reduce its net loss as hoped. New customer numbers also disappointed as the pandemic-era pet boom began to wane.
Elsewhere, Moderna (NASDAQ:MRNA) fell heavily again, after disclosing early stage trial data for its new mRNA-based flu vaccine that indicated it would have no real competitive edge over existing flu vaccines. Moderna stock fell 9.5% to its lowest in nearly a month. Tesla (NASDAQ:TSLA) stock, meanwhile, fell another 1.4% against the backdrop of further selling by CEO Elon Musk. Musk also added a seemingly tongue-in-cheek threat to stand down from the company to his Twitter feed on Thursday.