US Stocks Climb on Inflation Report

(AP) -- Stocks rose early on Wall Street Friday as investors appear relieved that the latest government reading on consumer prices contained no surprises, although it did show inflation is at a four-decade high.

The S&P 500 was up 0.5% as of 10:00 a.m. The benchmark index has now recovered most of the losses incurred after the discovery of the omicron variant of COVID-19 was announced last month. It's also close to the all-time high set on Nov. 18.

The Bureau of Labor Statistics said prices for U.S. consumers jumped 6.8% in November compared with a year earlier. Surging costs for food, energy, housing and other items have left Americans enduring their highest annual inflation rate since 1982. Core prices, which exclude food and energy prices, rose 4.9% year over year.

Those figures were right in line with the market's expectations.

"Many have felt the effects of inflation in their day-to-day, so this likely isn't a huge shocker to the market," said Mike Loewengart, managing director, investment strategy at E-Trade.

Federal Reserve Chair Jay Powell has suggested the central bank could move more quickly to pare back, or taper, the amount of bonds it's been purchasing each month to keep long-term interest rates low.

Analysts say the elevated inflation figures ramp up the pressure on the Fed to follow through on Powell's comments. Many investors also expect the Fed to start raising interest rates from current ultra-low levels starting in the middle of next year.

"The inflation print from this morning will reinforce the Fed's resolve to accelerate tapering. With the strength in the economic recovery, it is time to take the crutches away," said Anu Gaggar, global investment strategist for Commonwealth Financial Network.

The Dow Jones Industrial Average rose 149 points, or 0.4% to 35.903. The Nasdaq composite added 0.3% and the Russell 2000 index of small-company stocks gained 0.9%.

Technology stocks led the way. Business software maker Oracle surged 17.6% after reporting strong quarterly results. Microsoft rose 1.4%.

The yield on the 10-year Treasury note fell to 1.46% from 1.51% just before the inflation report came out. The yield on the two-year note dropped to 0.66%.