United States stocks up despite higher inflation

United States stocks up despite higher inflation

Apple jumped 4 percent and led a rally in technology companies, while industrial companies, banks, and consumer-focused companies like retailers also rose.

Investors said data on US consumer prices and retail sales due out on Wednesday will be key to where stocks move in the short term.

On the other hand, mining heavyweights BHP Billiton and Rio Tinto ended slightly higher, and blood products company CSL soared 5.1 percent after lifting its full-year profit guidance and half-year dividend.

Some market watchers say the recent bout of turbulence may not be over.

The Labor Department said its consumer price index climbed by 0.5 percent in January after edging up by a revised 0.2 percent in December.

Much of the recent market turmoil came after United States wages growth was stronger than expected, prompting talk of rising inflation and the prospect of central banks increasing interest rates and withdrawing financial stimulus more quickly than previously expected.

The monthly Labor Department report on the price of everything from gas to groceries was closely watched Wednesday, with Wall Street investors suddenly very concerned about inflation. The MSCI world stock index was 1.2 percent higher.

As a results, Dow e-minis were up 224 points, or more than 1 percent, by 6:49 a.m. ET.

The Nasdaq Composite surged 1.86 per cent to 7,143.62.

Swiss bank Credit Suisse has jumped after revealing that its fourth quarter net loss narrowed from previous year.

The two-week sell-off pushed the Dow and S&P 500 into the red from their record peaks, down 0.5 percent and 0.7 percent for the year, respectively as of Monday. That includes several drops that were far larger than anything the market endured a year ago. However, the year-on-year rise was unchanged at 1.8 per cent. Chipmakers Broadcom and Qualcomm each climbed after CNBC reported that the companies will meet this week to discuss Broadcom's $121 billion offer to buy Qualcomm.

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Benchmark U.S. crude gained 9 cents to $59.29 a barrel in NY. Brent crude, used to price worldwide oils, gained $1.64, or 2.6 percent, to $64.36 a barrel in London.

Wall Street opened the day on a downward trajectory after the consumer price index (CPI), which tracks the costs of household goods and services, was released, showing a 0.5 per cent increase in January, overshooting analyst expectations.

Defense contractor General Dynamics will spend nearly $7 billion to buy internet technology company CSRA. Tiffany added $2.13, or 2.1 percent, to $103.09.

Advancing issues outnumbered declining ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 2.94-to-1 ratio favoured advancers. Disney agreed to buy Fox's movie and television studios and some cable and worldwide TV businesses in December for $52.4 billion.

Following Wall Street's recent swings, the S&P 500 is down 0.4 per cent for the year.

Bond prices were little changed.

Higher bond yields boosted bank shares, with JPMorgan Chase, Goldman Sachs and Bank of America all winning more than two per cent.

The energy group slipped 0.2 per cent, and Suncor Energy (SU.TO) fell 1.1 per cent to $41.72. Heating oil fell 2 cents to $1.84 a gallon.

NuVista Energy bucked the energy trend to rise 3 per cent to C$7.83 after Eight Capital and Raymond James raised their target prices.

The dollar rose to 108.67 yen from 108.53 yen. The euro dipped to $1.2435 from $1.2355.

METALS: Gold jumped $27.60, or 2.1 percent, to $1,358 an ounce.

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