Stocks Hold to Inflation-Data Boost
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?"
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV