Dow gains 43.47
Bullish data on US inflation and the housing market sent stocks mostly higher on Wall Street today, with the Dow Jones industrials and Standard & Poor’s 500 index posting nearly five-year highs for the third trading session in a row.
A jump in oil prices moderated the gains, however, and the Nasdaq composite index finished lower.
Wall Street welcomed the latest report from the Labour Department, which showed consumer prices rising just 0.1% in February, far less than the 0.7% jump in January. Core CPI, with food and fuel prices removed, also rose 0.1%, down from 0.2% the previous month.
Combined with better-than-expected housing construction in February, investors were reassured that the US economy continues to grow while inflation remains in check.
That would allow the economy to withstand further interest rate increases from the Federal Reserve, which is expected to approve another quarter percentage point rate hike when it meets on March 28.
“The consumer price index rise was very modest. It suggests, as I think many of us have been forecasting, that inflation is in the process of moderating,” said Hugh Johnson, chairman and chief investment officer at Johnson Illington Advisors.
“The good news is investors can feel somewhat more comfortable about monetary policy.”
The Dow Jones industrial average rose 43.47, or 0.39%, to 11,253.24, its highest close since May 22, 2001 when it finished at 11,257.24.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index added 2.31, or 0.18%, to 1,305.33, its best close since May 22, 2001. The Nasdaq composite index slid 12.28, or 0.53%, to 2,299.56.
