U.S. stock futures pointed to a higher market open on Friday after economic data supported expectations that inflation is at bay, allowing the Federal Reserve to raise interest rates over time. The Labor Department said the consumer price index, the most widely used gauge of inflation, rose 0.3 percent in June -- half the 0.6 percent jump in May. Economists on average had forecast a 0.2 percent rise. The core CPI, which strips out volatile food and energy costs, edged up a smaller-than-expected 0.1 percent following a 0.2 percent May increase. Over the past 12 months, core inflation has risen 1.9 percent. "The CPI for June, while on a total basis was just slightly above expectations, on a core basis was slightly below expectations, which is the key measure for investors and certainly shows that consumer prices remain well in check," said Tim Ghriskey, chief investment officer at Solaris Asset Management, LLC. "This should be greeted favorably by the stock market."
Technology stocks will again be an investor focus after bellwether International Business Machines Corp. posted better-than-expected results on Thursday. Computer maker Dell Computer Corp. may also help tech stocks after it raised its quarterly profit outlook due to higher operating profits and a decline in tax rates. S&P 500 futures for the September contract rose 6.1 points to 1,109, above fair value accounting for dividends, interest rates and time to expiration on the contract. Dow Jones industrial index futures rose 48 points, while Nasdaq 100 futures gained 12.5 points. Big Blue reported a higher quarterly profit for the sixth consecutive quarter as businesses bought more computers, technology services and software. Its shares rose to $85.69 on the the INET electronic brokerage system after closing at $84.02 on the New York Stock Exchange on Thursday.
IBM is often seen as an indicator for the broader technology sector because it sells everything from tiny microchips to computer software and services to extremely powerful mainframe computers. Shares of Dell Computer changed hands at $35.60 on INET after it said it was raising its quarterly profit outlook due to higher operating profits and a decline in tax rates. The stock closed at $34.87 on the Nasdaq on Thursday. In a statement ahead of its annual shareholder meeting, the Austin, Texas-based company said it expected earnings for the second quarter ending in July of 31 cents a share, up from 29 cents a year ago and two cents better than it had previously forecast.///