Updated from 11:42 a.m. EDT
Stocks in the U.S. were tracking higher early Wednesday amid cooler-than-expected inflationary data and results at Freddie Mac (FRE) that weren't nearly as bad as analysts had predicted.
The Dow Jones Industrial Average shot up 99 points to 12,931, and the S&P 500 added 12 points to 1415, for gains of 0.9% apiece. The Nasdaq Composite bounced 24 points, or 1%, to 2519.
"Obviously there's been a lot of fear tilting towards higher inflation, so we're seeing a relief rally," said Steven Sheldon, CFA and principal with SMS Capital Management."The fear that's dominated things for so long is not only starting to diminish," said Jim Paulsen, chief investment strategist with Wells Capital Management, "but people are moving away from being afraid of catching a falling knife to thinking, 'I'd hate to be out of this.'" "Fear is turning into greed," he said. This morning the Labor Department reported 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. Economists had been looking for a 0.3% uptick. The core consumer price index, which excludes food and energy, rose 0.1%, or half of the expected increase. Energy prices, the government said, were unchanged from March. 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. "People know the headline numbers are going to be bad, but they're saying, 'So what, if it doesn't bleed out and take in core numbers?'" Paulson said. "How long have we had this story about how oil prices are going to bleed out?"