U.S. stocks close higher on economic data and earnings

U.S. stocks gained on Wednesday after a round of economic data and strong earning reports.


The Labor Department announced early in the morning that the Producer Price Index rose 0.8 percent in January, basically in line with market expectations.


The core PPI, which excludes volatile food and energy costs, was up 0.5 percent, significantly higher than the 0.2 percent economists were expecting, suggesting that higher prices of commodities such as crude oil might be spilling over to other products. The core rate was at its highest since October 2008 when it climbed 0.8 percent.


For months, investors have been keeping a close watch on inflation data. Most investors believe that interest rate risk is a major threat to markets. Actually, rising inflation figures around the world, with higher energy and food costs, have raised investors' expectations that the super-loose phase in global monetary policy is about to end.


Meanwhile, housing starts in January increased by 14.6 percent to an annual pace of 596,000, higher than the expected level of 535,000, according to the Commerce Department.


The market on Wednesday was also lifted by the latest batch of strong earnings. Dell's shares soared about 10 percent after the PC maker beat expectations with a fourth-quarter EPS (earnings per share) of 53 cents, compared with estimates for 37 cents.


Likewise, Deere & Co., the world's largest tractor maker, said its fiscal first-quarter net income more than doubled, thanks to growing sales of large farm machinery in the U.S. and Canada.


Moreover, according to the U.S. Federal Reserve's minutes of their January meeting released on Wednesday, Fed officials were increasingly confident of the economic recovery but remained unsatisfied with the healing of the job market.


The Dow Jones industrial average rose 61.53 points, or 0.50 percent, to 12,288.17. The Standard & Poor's 500 Index was up 8.31 points, or 0.63 percent, to 1,336.32. The Nasdaq gained 21.21 points, or 0.76 percent, to 2,825.56.
(Source:http://news.xinhuanet.com)