Technology and health care companies led U.S. stocks slightly higher in morning trading Friday, recouping some of the losses from the day before. Investors welcomed new data showing U.S. inflation at the consumer level inched higher last month, suggesting that the Federal Reserve may be less likely to raise interest rates next month. That weighed on bank shares, which were down the most.
KEEPING SCORE: The Standard & Poor's 500 index rose 5 points, or 0.2 percent, to 2,443 as of 11:40 a.m. Eastern time. The Dow Jones industrial average added 39 points, or 0.2 percent, to 21,883. The Nasdaq composite gained 27 points, or 0.5 percent, to 6,244. The Russell 2000 index of smaller-company stocks slipped 2 points, or 0.2 percent, to 1,369. The major indexes were coming off their biggest single-day decline since May 17.
THE QUOTE: "Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
INFLATION: The Labor Department said consumer prices edged up 0.1 percent in July following no gain in June. Inflation has risen 1.7 percent over the past 12 months, suggesting that inflation pressures remain well under control. The Federal Reserve, which raised its key interest rate in March and June, has signaled it plans a third rate hike before the end of this year. But some economists say the Fed may stand pat for the rest of 2017 unless inflation accelerates in coming months.
TOUGH TALK: Tensions between the U.S. and North Korea continued to simmer early Friday. In a tweet, President Donald Trump warned of military action "should North Korea act unwisely," noting that the U.S. is "locked and loaded." Earlier this week, Trump said the U.S. would unleash "fire and fury" on North Korea if it continued to threaten the U.S. North Korea has announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.
There were fewer signs of anxiousness in the markets Friday. Bond and gold prices, traditional havens for nervous investors, were little changed, and the VIX, a measure of how much volatility investors expect in stocks, slid 6.7 percent following a 44.4 percent jump the day before. It's still the highest it's been since May.
UP WITH TECH: Investors bid up technology sector shares. The sector was the biggest decliner on Thursday. KLA-Tencor gained $2.22, or 2.5 percent, to $89.77, while Seagate Technology added 69 cents, or 2.2 percent, to $32.24.
BIG GAINERS: Health care stocks were among the big gainers. Perrigo rose $1.62, or 2.1 percent, to $78.46. Universal Health Services picked up $2.26, or 2.1 percent, to $107.63.
SALES SLUMP: J.C. Penney sank 17.8 percent after the struggling department store chain reported quarterly results that fell short of Wall Street's expectations. The company also said sales at its established stores declined for the fourth-straight quarter. The stock lost 84 cents to $3.87.
SLIDING: Traders sold-off financial stocks amid speculation that the Fed will decide to hold off on raising interest rates next month. Higher interest rates can help boost banks' revenue from loans. Brighthouse Financial shed $1.03, or 1.8 percent, to $57.47. Morgan Stanley fell 68 cents, or 1.5 percent, to $45.62.
OIL: Benchmark U.S. crude was down 14 cents to $48.47 a barrel on the on the New York Mercantile Exchange. Brent crude, used to price international oils, was down 16 cents to $51.74 a barrel in London.
CURRENCIES: The dollar slipped to 109.09 yen from 109.26 late Thursday. The euro fell to $1.1797 from $1.1774.
BONDS: Bond prices were little changed. The yield on the 10-year Treasury note held steady at 2.20 percent.
MARKETS OVERSEAS: Major indexes in Europe were mixed. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent. Britain's FTSE 100 was down 1.1 percent. In Asia, several indexes closed lower overnight. South Korea's Kospi lost 1.7 percent, while Hong Kong's Hang Seng slid 2 percent. Australia's S&P/ASX 200 dropped 1.2 percent. Japan was closed on a public holiday.