NEW YORK (AP) — U.S. stocks are shaking off an early decline and rising Wednesday as banks climb along with bond yields. The increase in rates came after the government said consumer prices climbed in January at a rate that was faster than economists had expected. There were few signs of the worries about inflation that sent stocks falling in the last few weeks, as technology, industrial and consumer-focused companies also rose.
After they tumbled 10 percent in nine days, stocks are now higher for the fourth day in a row. They’re up about 4 percent in that time.
KEEPING SCORE: The Standard & Poor’s 500 index rose 24 points, or 0.9 percent, to 2,687 as of 1:10 p.m. Eastern time. The Dow Jones industrial average added 125 points, or 0.5 percent, to 24,766. The Nasdaq composite climbed 93 points, or 1.3 percent, to 7,107. The Russell 2000 index of smaller-company stocks rose 16 points, or 1.1 percent, to 1,511.
PRICE REPORT: Excluding volatile items like food and energy, prices paid by consumers rose 0.3 percent in January. That’s the most in a year. Stocks started slumping Feb. 1 after reports of greater wage growth caused investors to worry about faster inflation. Inflation has been very low for years, and if that changes, it could prompt the Federal Reserve to raise interest rates more rapidly. Higher interest rates act as a check on the economy by making it more expensive for businesses and individuals to borrow money.
The reaction to the gains in consumer prices was relatively calm Wednesday. The yield on the 10-year Treasury note rose to 2.90 percent, its highest mark in four years, from 2.84 percent the day before. That hurt shares of high-dividend companies like real estate investment trusts and utilities. Those stocks are often compared to bonds because of their big dividend payments and relatively steady prices, but investors find them more appealing when bond yields are falling.
RETAIL SALES: American cut back on purchases of cars, furniture and a variety of other products in January and the Commerce Department also lowered its estimate for shopping in December. The surprise slowdown comes after a three-month stretch of sizzling consumer activity, from September through November, which had fueled the most robust holiday sales in a decade.
Still, retailers mostly traded higher. Amazon rose $25.55, or 1.8 percent, to $1,440.06 and Tiffany added $2.78, or 2.8 percent, to $103.74. Target gained $2.21, or 3 percent, to $76.09….