Wall Street steamed higher Wednesday after a better-than-expected report on consumer prices tempered some of the market's concerns about...
NEW YORK — Wall Street steamed higher Wednesday after a better-than-expected report on consumer prices tempered some of the market’s concerns about inflation.
The Dow Jones industrial average rose 66.20 to 12,898.38. A late sell-off in technology stocks caused the market to pare its gains, with the blue-chip index at times up more than 150 points.
Microsoft, one of the 30 Dow stocks, added 15 cents to close at $29.93 a share. Boeing, also a Dow stock, gained 61 cents to $85.69.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 5.62 to 1,408.66. The Nasdaq composite index rose 1.58 to 2,496.70.
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The Labor Department’s report that consumer prices advanced 0.2 percent in April after rising 0.3 percent in March appeared to alleviate worries about a big spike in prices due to the recent surge in energy costs. The moderation in prices comes despite the largest jump in food prices in 18 years.
Wall Street has been concerned that higher food and energy costs are cutting into consumers’ ability to spend.
Marc Pado, U.S. market strategist for Cantor Fitzgerald, said the tame consumer-prices reading, along with recent figures on productivity, indicate that businesses are swallowing some of the rising costs they face.
“You have higher input costs, but you’re getting more out of your workers so therefore you’re able to control your output costs,” he said. “The economy is lean and mean and doing well even though on the demand side it’s slumping.”
Steve Goldman, chief market strategist at Weeden & Co., said he remains troubled about the financial industry’s underperformance amid lingering worries that the credit crisis is still not over. He said that sector has been pulled higher by the market’s recent overall rise, but isn’t taking the leadership position needed to lead a bona fide rally.
“They led us into the crisis, but they’re not yet leading us out of it,” he said. “That’s what needs to happen.”