The markets perked up after the core Consumer Price Index fell within expectations and Fed chairman Alan Greenspan said inflation isn't a short-term threat.
Some soothing news about inflation and the economy helped to ease investor tension on Tuesday. Although the Labor Department's Consumer Price Index rose 0.6% in May, higher than expected, the core CPI of 0.2%--without energy or food prices--was within analysts' expectations, showing that economic growth, and accompanying inflation, may be manageable.
And at his reconfirmation hearing before Congress, Federal Reserve chairman Alan Greenspan said that inflation posed no major concern in the near future. It remained unclear, however, whether the Fed would raise the nation's benchmark interest rate by a quarter percentage point or a half point when it meets June 29, and Greenspan offered no hints.
That combination sent stocks higher for the day, with tech stocks posting the biggest gains. Our InformationWeek 100 index rose 4.28, or 1.4%, to close at 316.40. The Nasdaq rose 25.61, or 1.3%, to 1,995.60. The Nasdaq tracking stock rose 47 cents, or 1.29%, to close at $36.79 on lower than average volume of roughly 92 million shares.
The Dow Jones industrials rose 45.70, or 0.4%, to 10,380.43 after being up more than 90 points earlier in the day, and the S&P 500 rose 6.72, or 0.6%, to 1,132.01.
Linux vendor Red Hat fell $2.24 to $22.06 one day after it said its CFO, Kevin Thompson, is leaving the company to pursue other interests.
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