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U.S. stocks higher as wholesale inflation falls

2010-03-18 11:15 BJT

NEW YORK, March 17 (Xinhua) -- U.S. stocks closed higher on Wednesday as inflation at the producer level dropped more than expected, supporting the Fed's decision to keep rates low.

Renewed optimism about the economy drove investors to riskier assets including commodities and equities, pushing oil prices to settle near 83 U.S. dollars a barrel. Dow and S&P refreshed 18- month high, while Nasdaq reached 19-month high.

Wednesday's move came after the Labor Department said the producer price index (PPI) for finished goods dropped by a seasonally adjusted 0.6 percent in February, the biggest drop in seven months. The core PPI, which excludes volatile energy and food prices and rose 0.1 percent last month, in line with economists' expectation.

The readings echoed the Federal Reserve's assessment that inflation is likely to remain subdued for some time, giving Fed more reason to keep interest rates at record lows for an extended period of time.

The Dow Jones industrial average gained 47.69, or 0.45 percent, to 10,733.67. The Standard & Poor's 500 index advanced 6.75, or 0. 58 percent, at 1166.21 and the Nasdaq rose 11.08, or 0.47 percent, to 2,389.09.

Editor: Du Xiaodan | Source: Xinhua