NEW YORK: US stocks opened slightly higher on Thursday as Oracle boosted the technology sector and bank shares gained after the Federal Reserve raised interest rates for the first time this year.
The central bank on Wednesday raised rates by a quarter point to 0.75-1.00%, responding to the continued strength in the labour market and a pick up in inflation.
However, the Fed stuck to its outlook for two more rate hikes this year and three in 2018. Shares of big US banks, which slipped on the less hawkish-than-expected stance on Wednesday, were up about 0.7%.
“A less aggressive Fed was clearly the message the markets wanted to hear and indeed acted accordingly,” Peter Cardillo, chief market economist at First Standard Financial, wrote in a note.
“The Fed’s plan to stick to three rate hikes gave the green light for investors to focus on economic and corporate growth.”
Oracle gave the biggest boost to the S&P, with an 8.3% rise after the business software maker issued a better-than-expected quarterly profit.
IBM was up 1.2% and was the top stock on the Dow.
The S&P information technology sector was up 0.42%, giving the broader index its biggest boost.
At 9:37am ET (1337 GMT), the Dow Jones Industrial Average was up 28.03 points, or 0.13%, at 20,978.13, the S&P 500 was up 0.65 point, or 0.03%, at 2,385.91 and the Nasdaq Composite was up 5.09 points, or 0.09%, at 5,905.14.
The gains in technology and financial stocks helped keep the S&P in the positive territory even though seven other sectors declined.
Backing Fed chair Janet Yellen’s optimism on the economy, a report from the Commerce Department showed homebuilding jumped in February as unseasonably warm weather boosted the construction of single-family houses.
The number of Americans filing for unemployment benefits fell last week, pointing to a further tightening in the labour market, according to a report from the Labour Department.
Shares of Tesla rose 2.8% to US$262.94 after the electric carmaker said it would raise about US$1.15bil as the company speeds up the launch of its Model 3 sedan.
Biogen was off 3.3% to US$282.83 after Morgan Stanley and Leerink downgraded the drugmaker’s stock and cut price targets.
Advancing issues outnumbered decliners on the NYSE by 1,621 to 991. On the Nasdaq, 1,349 issues rose and 851 fell.
The S&P 500 index showed 41 new 52-week highs and no new lows, while the Nasdaq recorded 78 new highs and 25 new lows. - Reuters