Late Selling Limits Wall Street's Gains
Updated from 2:40 p.m. EDT
Stocks in the U.S. closed to the upside, but selling pressure in the final hour left the major averages well below their best levels of the day.
For most of the session, the indices rallied amid cooler-than-expected inflationary data and results at Freddie Mac (FRE) that weren't nearly as bad as analysts had predicted. However, by the close, the Dow Jones Industrial Average had given up half its gains and was ahead by 66 points, or 0.5%, to 12,898.
The S&P 500 added 6 points, or 0.4%, to 1409, and the Nasdaq Composite, which outperformed for much of the session, edged up 2 points, or 0.1%, to 2497, as big tech names Google (GOOG), Apple (AAPL) and Amazon.com (AMZN) saw weakness."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. 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?" said Jim Paulsen, chief investment strategist with Wells Capital Management, "How long have we had this story about how oil prices are going to bleed out?"
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