- Gap rises on upbeat forecast
- Peloton sinks on US govt subpoenas, bike price cuts
- Indexes up: Dow 0.28%, S&P 0.30%, Nasdaq 0.23%
Wall Street's main indexes edged higher on Friday ahead of Federal Reserve Chair Jerome Powell's speech that could offer clues on when the central bank will start paring back its large stimulus program.
Ten of the 11 major S&P sectors advanced in early trading, with energy, materials and real estate registering the biggest gains.
The banking index added 0.6% as investors positioned themselves for any announcements on tapering.
The healthcare sector was the sole underperfomer in early trades.
US stocks fell from all-time highs on Thursday on concerns over developments in Afghanistan and hawkish signals from Fed officials.
In an exclusive interview to Reuters, Atlanta Fed President Raphael Bostic, a voting member of Fed's policy setting committee, said it would be "reasonable" to trim bond purchases beginning in October if strong job gains continue.
Powell, who is due to speak via webcast at 10 a.m. ET (1400 GMT) at the annual Jackson Hole economic conference, may acknowledge the economy's progress toward full employment, and likely provide hints about slowing the $120 billion in monthly asset purchases, with an announcement expected before the end of 2021.
"$120 billion a month is just excessive in terms of money printing, and you're seeing that in the inflation numbers. So there's little choice that Powell has to execute the so-called tapering," said Greg Swenson, founding partner of Brigg Macadam.
"The market has become really dependent on the Fed purchases and that's something that has to be addressed, it can't go on forever."
Data showed the Fed's favored inflation gauge, personal consumption expenditure, rose largely in-line with estimates in July.
A strong corporate earnings recovery and hopes of a vaccine-driven economic rebound have pushed US stocks to record levels in recent sessions, but soaring cases of the Delta variant of COVID-19 have clouded economic outlook.
The three major indexes were set for slight weekly gains, with the tech-heavy Nasdaq looking to outperform.
At 9:37 a.m. ET, the Dow Jones Industrial Average was up 97.77 points, or 0.28%, at 35,310.89, the S&P 500 was up 13.50 points, or 0.30%, at 4,483.50, and the Nasdaq Composite was up 34.46 points, or 0.23%, at 14,980.27.
Among earnings-driven moves, apparel retailer Gap Inc jumped 3.7% after it raised its full-year net sales forecast as socializing makes a comeback with easing pandemic curbs.
Workday Inc added 7.3% as brokerages raised their price targets on the stock after the enterprise cloud applications company beat analyst estimates for second-quarter revenue.
Peloton Interactive Inc tumbled 8.3% after it issued a profit warning and said it was being probed by US regulators over an accident involving its treadmills earlier this year.
Advancing issues outnumbered decliners by a 2.92-to-1 ratio on the NYSE and by a 1.98-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and 1 new low, while the Nasdaq recorded 27 new highs and 19 new lows.