Off The Wire
Wall St set for gains as economic data allays growth worries
May 27 (Reuters) - U.S. stocks were set to open higher on Friday as data showed strength in consumer spending and signs of peaking inflation, providing relief for investors worried about a sharp slowdown in economic growth.
The Commerce Department's report showed consumer spending rose by a more-than-expected 0.9% in April, while March numbers were revised higher to a 1.4% gain from 1.1% as previously reported. read more
Although inflation continued to increase in April, it was not at the same magnitude as in recent months. The personal consumption expenditures price index, the Fed's preferred inflation gauge, gained 0.2% last month after shooting up 0.9% in March.
"If the consumer is able to keep spending and the prior number was revised up, that's good news," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
"Right now it's just a rally in a bear market ... the market has just got extremely oversold and people are looking for bargains."
Wall Street's main indexes closed sharply higher on Thursday after some optimistic retail earnings outlook, mixed economic data and less-hawkish minutes from the U.S. Federal Reserve's meeting brought back buyers into the market on waning concerns about aggressive interest rate hikes.
The three major indexes are on track to snap their longest weekly losing streaks in decades. The benchmark S&P 500 (.SPX) and the blue-chip Dow (.DJI) have gained more than 4% each so far this week, while the tech-heavy Nasdaq (.IXIC) rose 3.4%.
All three of them are tracking their best weekly gain since mid-March.
"The market needs a lot more buying power to seriously reverse and get back into an uptrend. I don't see that happening anytime soon," Julius de Kempenaer, a senior technical analyst at StockCharts.com, said.
At 8:57 a.m. ET, Dow e-minis were up 102 points, or 0.31%, S&P 500 e-minis were up 26.75 points, or 0.66%, and Nasdaq 100 e-minis were up 128.75 points, or 1.05%.
Ulta Beauty (ULTA.O) gained 8.1% in premarket trading after the beauty products retailer forecast strong first-quarter results on fewer COVID-19 restrictions.
Gap Inc (GPS.N) and American Eagle Outfitters (AEO.N) sank 19.0% and 10.8%, respectively, after the clothing retailers trimmed their annual profit forecasts in the face of decades-high inflation. read more
The CBOE volatility index (.VIX) fell for the third straight session and was last at 27.18 points.