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
( FRE) that weren't nearly as bad as analysts had predicted.
Dow Jones Industrial Average
shot up 99 points to 12,931, and the
added 12 points to 1415, for gains of 0.9% apiece. The
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?"
Sheldon suggested that, as oil and food spikes deplete discretionary spending, the higher commodities prices may even be having the effect of keeping a lid on the rest.
"It does make sense that, if you're having a weaker economy, traditionally that will translate into muted inflation," he added. "And I think that's what we're seeing today."
In less upbeat economic data, RealtyTrac said that foreclosures reached 243,353 in April, which the report noted will add pressure to housing prices that are already dismally low. The report said areas of California, Florida, Nevada and Arizona continue to be "particularly hard-hit."
On the equities side,
narrowed to $151 million, or 66 cents a share, from a $3.97 shortfall in the fourth quarter -- far better than the average Street projection of 93 cents a share, as per Thomson Reuters. The loss is also nearly double than that of last year, and the company plans to raise $5.5 billion "in the near future," but the stock still ramped up 9.6%. Fellow government-sponsored mortgage buyer
( FNM) was ahead by 7%.
Elsewhere in the financial space,
could fire 4,000 of its own workers as the brokerage combines its operations with
( BSC) and deals with the blustery investment-banking environment, according to a person familiar with the matter.
Roughly 2,000 employees would be replaced by Bear-derived newcomers, said the report. JPMorgan shares dipped 8 cents to $45.40.
, meanwhile, posted a surprise adjusted profit of 2 cents a share and reiterated its bullish full-year earnings forecast. When counting in substantial one-time restructuring and litigation charges, the company swung to a quarterly loss, but the stock still moved up 5.1%.
Elsewhere, chipmaking-equipment seller
, though the company beat on both top and bottom lines. Also, in a conference call, CEO Mike Splinter predicted more softness in chip-related spending while also offering his prediction that "this is the bottom." Shares were off 1.1% following a brief morning nudge into positive territory.
( 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 shed 2.6%.
Away from the tech patch,
( WFMI) plunged 12.5% after the organic-foods mart said costs from its Wild Oats buyout ate into its fiscal second-quarter profit, which slid 13%, even as revenue soared by 27.6%. Same-store sales, or those from locations open a year or more, climbed 6.7%.
Deere & Co.'s
fiscal second-quarter income, which surged amid strong demand for the company's farm equipment, came in just short of consensus. The tractor maker also said that rising commodity prices will probably drag on its results for the rest of the year. Shares slumped 8.9%
Late in the trading day Tuesday,
Clear Channel Communications
with Thomas H. Lee Partners and Bain Capital worth $36 a share, or $17.9 billion. That's $3.20 a share lower than what the companies had previously agreed on, but shares closed Tuesday higher and added 1.6% in the new session.
Among commodities, crude oil sank $1.06 to $124.74 a barrel as the Energy Information Administration reported that crude stockpiles rose by 200,000 barrels last week. Gold futures gave up $5.10 to $864.50 an ounce. The U.S. dollar firmed slightly against the euro to $1.5472, while adding 0.4% against the yen at 105.18.
Still, Treasury prices clawed their way up from early losses. The 10-year note was flat in price to yield 3.91% and the 30-year bond lifted by 8/32 in price, yielding 4.62%.
Markets abroad were almost uniformly rising. In Asia, Hong Kong's Hang Seng Index slipped 0.1% overnight, but the Nikkei 225 in Tokyo climbed 1.2%. As for Europe, London's FTSE 100 ticked up 0.1% and Germany's Xetra Dax gained 0.3%. The Paris Cac jumped 1.1%.