AP
Dow Jumps 100 Points on Inflation Data
Friday June 15, 10:03 am ET
By Tim Paradis, AP Business Writer
Stocks Move Sharply Higher Following Tame Core Inflation Reading
NEW YORK (AP) -- Wall Street barreled higher Friday after the week's most
anticipated economic reading indicated that inflation excluding the price of
gas remained tepid last month, easing some concerns that have jolted stock and
bond markets in recent sessions. The Dow Jones industrials at times advanced
more than 100 points.ADVERTISEMENT
if(window.yzq_d==null)window.yzq_d=new Object();
window.yzq_d['TTozAdibyhU-']='&U=13b72hb53%2fN%3dTTozAdibyhU-%2fC%3d597633.10776713.11398326.1414694%2fD%3dLREC%2fB%3d4617424';
The consumer price index showed prices rose at the fastest pace in 20 months
last month as the cost of gas jumped. However, the so-called core personal
consumption price index, which excludes often volatile food and energy prices,
rose a lower-than-expected 0.1 percent. The figure, which the inflation-wary
Federal Reserve watches closely, was below the 0.2 percent increase Wall Street
expected.
The yield on the benchmark 10-year Treasury note fell to 5.20 percent Friday
from 5.23 percent late Thursday after release of the CPI report helped ease
emergent concerns that the Fed might raise rather than lower interest rates
this year.
The notion of a rate hike gained traction last week when inflation concerns
sent the yield on the 10-year note above 5 percent for the first time since
last summer. Subsequent spikes in bond yields, which move in the opposite
direction as prices, roiled stock markets last week and early this week.
Friday's session follows a two-day surge in stocks that arrived as inflation
worries eased. Friday could see added volatility because of the expiration of
four types of options contracts -- an occurrence known as quadruple witching.
In early trading, the Dow jumped 98.12, or 0.72 percent, to 13,651.84.
The climb puts the Dow back near its trading high of 13,692.00, reached June 1.
The move higher follows sharp gains Wednesday and Thursday that marked the
Dow's best two-day advance since last July after figures on wholesale prices
excluding food and energy costs showed inflation rose at a modest pace.
Broader stock indicators also rose Friday. The Standard & Poor's 500 index rose
11.74, or 0.77 percent, to 1,534.71. The index approached its trading high of
the year of 1,540.56 and advanced toward its record trading high of 1,552.87
set in March 2000. The Nasdaq composite index rose 24.88, or 0.96 percent, to
2,624.29.
The dollar rose against other major currencies; gold prices also rose.
Among other economic news, a reading on the current account deficit, which
reflects not only trade in goods and services but also investment flows between
countries, showed an increase as oil prices climbed. The Commerce Department
said the imbalance in the current account increased 2.5 percent to $192.6
billion in the January-to-March period, compared to $187.9 billion in the
fourth quarter. The increase was slightly below what analysts had been
expecting.
Light, sweet crude rose 24 cents to $67.89 per barrel on the New York
Mercantile Exchange.
In corporate news, Goldman Sachs raised its rating on chip maker Intel Corp. to
"buy" from "neutral," sending the stock up 74 cents, or 3.2 percent, to $23.97.
Monsanto Co. jumped $3.63, or 5.8 percent, to $66.94 after the world's largest
seed company raised its full-year earnings forecast based on a preliminary
review of third-quarter performance.
Gun maker Smith & Wesson Holding Corp. rose 87 cents, or 5.8 percent to $15.78
after reporting stronger-than-expected fiscal fourth-quarter profit and sales.
The company also raised its full-year profit and sales forecasts.
Advancing issues outnumbered decliners by about 6 to 1 on the New York Stock
Exchange, where volume came to 501 million shares.
The Russell 2000 index of smaller companies rose 12.19, or 1.46, or 849.31.
Overseas, Japan's Nikkei stock average rose 0.72 percent after the Bank of
Japan left interest rates unchanged as expected. In Europe, stocks extended
gains after the U.S. market opened higher. In morning trading, Britain's FTSE
100 rose 1.15 percent, Germany's DAX index rose 2.07 percent, and France's
CAC-40 rose 0.82 percent.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
---------------------------------
Park yourself in front of a world of choices in alternative vehicles.
Visit the Yahoo! Auto Green Center.
