LIVE MARKETS-Unofficial end-of-summer session kicks off with Fed-friendly data

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LAST UNOFFICIAL TRADING DAY OF SUMMER KICKS OFF WITH FED-FRIENDLY DATA

U.S. stocks gained ground in early trading on Friday as investors gave their seal of approval to the Commerce Department's PCE report, the cherry on the cake of a pre-Labor Day week.

All three major U.S. stock indexes were green, with the Nasdaq, boosted by a tech rebound, leading the pack.

For the week, which exhibited the sort of heightened volatility associated with light trading volumes, the Nasdaq and the Dow are on course to gains, while the S&P 500, if it closes where it sits, would show a slight Friday-to-Friday decline.

The PCE data was largely in line and contained few surprises, with the exception of cooler-than-forecast annual inflation readings and slightly stronger-than-expected income growth.

At any rate, the report had in it to upset anyone, and did very little to move the with respect to the anticipated rate cut at the conclusion of the Fed's policy meeting month.

There remains some discussion regarding the size of that cut, however.

"A 25 basis point interest rate cut is pretty much set in stone in September, but the Fed will still hope the jobs report week does to pile on the pressure for a 50 basis point cut," says Olu Sonola, head of U.S. economic research at Fitch Ratings.

Among the 11 major sectors of the S&P 500, tech .SPLRCT was up the most while energy shares .SPNY were the sole losers.

Early outperformers include chips .SOX (with an assist from an Nvidia NVDA.O rebound) and airlines .SPCOMAIR.

U.S. markets are closed on Monday.

Here's where things stood at 09:49 EDT:

(Stephen Culp)

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