Stocks in U.S. Hit the Ground Running
Updated from 8:06 a.m. EDT
Stocks in the U.S. were climbing at the open Wednesday amid cooler-than-expected inflationary data and improved results at Freddie Mac (FRE).
The Dow Jones Industrial Average was rising 42 points to 12,875, and the S&P 500 was adding 6 points to 1409. The Nasdaq Composite was tacking on 7 points to 2502.
Stock index futures had been signaling a decline prior to the opening bell, but reversed course after the Labor Department said that, despite a 0.9% jump in food costs -- the biggest advance in nearly two decades -- April consumer prices rose only 0.2% from the prior month. The core consumer price index, which excludes food and energy, ticked up 0.1%, half of the expected increase. The overall number was estimated to have risen 0.3%.Year over year, core consumer inflation was up 2.3%, a hair lower than anticipated, while the overall CPI climbed 3.9% from a year ago. Energy prices, the government said, were unchanged from March. On the equities side, among the early winners was government-sponsored mortgage buyer Freddie Mac, which said its first-quarter loss narrowed to $151 million, or 66 cents a share, from the prior quarter's loss of $3.97 a share. The stock rose 7.3%. However, chipmaking-equipment seller Applied Materials (AMAT) slipped 2.2% after reporting dwindling earnings. Revenue nonetheless topped analyst expectations. In a conference call, CEO Mike Splinter predicted more softness in chip-related spending, but predicted that "this is the bottom." Electronic Arts (ERTS), a video-game publisher, offered a weaker full-year profit outlook than that targeted by Wall Street. The company also came in well ahead of expectations for the fiscal fourth quarter with adjusted earnings of $30 million, or 9 cents a share, on 50% higher sales. Still, shares lost 0.7%.
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