Wall Street Ends Week With Rally

Stocks react positively to a government report that consumer prices rose 0.6% last month, slightly ahead of forecast.
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Updated from 4:14 p.m. EDT

Stocks in New York finished on the upside Friday after the newest round of government inflation data came in essentially as economists were expecting, easing for the moment worries about the effects of high commodity prices filtering down to the retail level and leading to rate hikes.

The

Dow Jones Industrial Average

closed up 165.77 points, or 1.4%, at 12,307.35, and the

S&P 500

added 20.16 points, or 1.5%, to 1360.03. The

Nasdaq

jumped 50.15 points, or 2.1%, to 2454.50.

The mood on Wall Street got a lift after the Labor Department said the consumer price index rose 0.6% last month, just slightly ahead of what had been forecast. The bad news is that was the steepest climb since November as gas prices jumped. Still, the core rate, which excludes food and energy, matched estimates with a 0.2% uptick.

Taking the longer view, the CPI was up 4.2% year over year and was on the warm side, but the core rate again was in line, increasing 2.3%.

Following the report, the dollar climbed against the euro, the yen and the pound. The dollar index, which measures the dollar against a basket of major currencies, was up 0.2% to 74.03.

Treasury prices fell. The 10-year note was down 11/32, yielding 4.26%, and the 30-year bond was off 13/32, yielding 4.79%.

The Dow was led higher by stocks such as

Alcoa

(AA) - Get Report

,

Intel

(INTC) - Get Report

,

Microsoft

(MSFT) - Get Report

and

DuPont

(DD) - Get Report

.

As for the Nasdaq, it climbed thanks to names including

Cisco

(CSCO) - Get Report

and

Oracle

(ORCL) - Get Report

despite another down day for

Yahoo!

(YHOO)

, which fell 10% in the prior session after word came down that Microsoft would halt its attempt to take over the Internet portal.

Providing something of an offset was news that Yahoo! will, however, pursue a search pact with

Google

(GOOG) - Get Report

. After falling as much as 5% during the day, Yahoo! closed off 5 cents, or 0.2%, at $23.47.

On the commodities side, crude oil lost $1.88 to $134.86 a barrel. Gasoline was down 6 cents at $3.46 a gallon.

Airlines stocks soared as crude fell.

US Airways

(LCC)

shares rocketed up 17% after the company announced cost-cutting measures and Merrill Lynch upgraded its stock. The stock gave back some of those gains to eventually close up 6.3% at $2.86.

Shares of

Continental Airlines

(CAL) - Get Report

, United operator

UAL

(UAL) - Get Report

and American Airlines' parent

AMR

(AMR)

advanced, as well.

The home stocks were also showing modest strength, even as a report from RealtyTrac said that last month foreclosure filings rose 48% from the previous year and 7% from April. All told, 261,255 homes across the nation were subject to at least one foreclosure filing.

The

SPDR S&P Homebuilders

ended up 2.8% to 18.37.

Lowe's

(LOW) - Get Report

and

Lennar

(LEN) - Get Report

, holdings of the index, finished in positive territory.

Basic materials companies were also in the green.

BHP Billiton

(BHP) - Get Report

announced that it would be temporarily shutting one of its nickel mines, sending nickel futures soaring. Fellow miners

Freeport-McMoRan

(FCX) - Get Report

and

Rio Tinto

(RTP)

each closed up by more than 4%.

This article was written by a staff member of TheStreet.com.