* July U.S. producer prices rise; industrial output up
* King Digital, El Pollo Loco slump as results disappoint
* J.C. Penney, Nordstrom rise after strong results
* Indexes up: Dow 0.2 pct, S&P 0.1 pct, Nasdaq 0.03 pct (Updates to open)
By Tanya Agrawal
Aug 14 (Reuters) - Wall Street was slightly higher on Friday as a raft of positive data pointed to a bullish signal for third-quarter economic growth.
The Dow and the S&P 500 were on track to post slight gains for the week, but the Nasdaq was poised to close flat in a choppy week that saw China devalue its currency, hitting markets and derailing predictions of a rate hike.
U.S. producer prices rose for a third straight month in July, suggesting the drag on inflation from weaker oil prices was easing, while industrial output advanced at its strongest pace in eight months in July.
Inflation has been persistently running below the Fed’s 2 percent target.
Most traders and economists are expecting a September rate hike, but macro concerns have prompted some to argue that the Fed may wait until December to hike interest rates for the first time in nearly a decade.
“We just need to see if the yuan is going to stay halfway stable over the next few days, then confidence is going to come back,” said Markus Huber, senior equity sales trader at Peregrine & Black.
At 10:07 a.m. ET (1407 GMT) the Dow Jones industrial average was up 33.98 points, or 0.2 percent, at 17,442.23. The S&P 500 was up 2.84 points, or 0.14 percent, at 2,086.23 and the Nasdaq Composite was up 1.57 points, or 0.03 percent, at 5,035.13.
Nine of the 10 major S&P sectors were higher, with the materials index’s 0.4 percent rise leading the advancers.
Wall Street had ended flat on Thursday as a drop in energy shares offset a rebound in retail sales and Cisco’s stronger-than-expected results.
With the second-quarter earnings season drawing to a close, Corporate America’s profit is estimated to have increased 1.2 percent, while revenue is expected to have slipped 3.5 percent, according to Thomson Reuters estimates.
King Digital’s shares slumped 9.8 percent to $13.69, while El Pollo Loco fell 17.3 percent to $15.18 a day after the companies reported quarterly results.
J.C. Penney was up 8.5 percent at $8.76 after the department store operator reported a smaller-than-expected quarterly loss.
Nordstrom shares rose 6 percent $79.44 after the upscale department store chain posted better-than-expected quarterly results.
Advancing issues outnumbered decliners on the NYSE by 1,586 to 1,119. On the Nasdaq, 1,328 issues rose and 1,090 fell.
The S&P 500 index showed 6 new 52-week highs and 7 new lows, while the Nasdaq recorded 22 new highs and 57 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D‘Souza)