NEW YORK (AP) — Stocks edged higher in morning trading Wednesday following a better-than-expected report on industrial production.
Major indexes rallied throughout the spring and summer on signs that the economic downturn was easing, but investors are now looking for signs of actual growth to push stocks higher. Federal Reserve Chairman Ben Bernanke said Tuesday that the recession was likely over.
Wednesday’s industrial output report provided evidence of a rebound. The Fed said industrial activity surged 0.8 percent in August, better than the 0.6 percent increase economists had forecast. The Fed also revised July’s figures to a 1 percent increase, twice as much as originally reported.
In midmorning trading, the Dow Jones industrial average rose 10.28, or 0.1 percent, to 9,693.69. The Standard & Poor’s 500 index rose 1.63, or 0.2 percent, to 1,054.26, while the Nasdaq composite index rose 3.51, or 0.2 percent, to 2,106.15.
Investors were little swayed by the latest report on consumer prices. The Commerce Department said its Consumer Price Index, a measure of inflation at the retail level, rose 0.4 percent in August, just above the 0.3 percent rise economists polled by Thomson Reuters expected.
Excluding volatile energy and food prices, the index rose 0.1 percent, in line with expectations. With most of the increase tied to more volatile energy and food prices, the results showed potential inflation appears to be contained.
The mild price jump at the retail level came a day after the Commerce Department said prices at the wholesale level jumped 1.7 percent in August, more than double the rise predicted by economists.
Stocks rose Tuesday, getting a boost from Bernanke’s comments as well as improving reports on retail sales and manufacturing. A government report showed retail sales rose by more than expected in August, while Fed’s index of manufacturing in the New York region rose to its best level since late 2007. The Dow rose 57 points, its seventh gain in eight days.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note edged up to 3.47 percent from 3.46 late Tuesday.
Two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 234.6 million shares compared with 202.1 million traded at the same point Tuesday.
The Russell 2000 index of smaller companies rose 2.93, or 0.5 percent, to 607.77.
The dollar fell against other major currencies, while gold prices rose.
Overseas, Japan’s Nikkei stock average rose 0.5 percent. In afternoon trading, Britain’s FTSE 100 gained 1.6 percent, Germany’s DAX index rose 1.1 percent, and France’s CAC-40 surged 1.5 percent.
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