3-13-18 10:14 AM EDT | Email Article
By David Hodari 
   -- U.S. inflation data in focus 
   -- Dow, S&P 500, Nasdaq climb 
   -- Trading calm in Europe, Asia-Pacific 

U.S. stocks opened higher Tuesday after the latest round of inflation data showed consumer prices rose modestly in February and President Donald Trump said he would nominate CIA director Mike Pompeo as secretary of state to replace Rex Tillerson.

The Dow Jones Industrial Average rose 182 points, or 0.7%, to 25360. The S&P 500 climbed 0.6% and the Nasdaq rose 0.6%.

Consumer prices rose moderately in February, although at a slightly slower pace than in the prior month. The consumer-price index, which measures what Americans pay for everything from shampoo to hotel stays, rose 0.2% in February after climbing a seasonally adjusted 0.5% in January, the Labor Department said. Economists surveyed by The Wall Street Journal expected a 0.2% increase.

A lack of inflationary jitters during 2017 allowed U.S. stock indexes to leap to multiple records early in 2018, while investors kept long-term bond yields subdued.

Since the start of February, however, rising inflation in both the U.S. and Europe has prompted investors to second-guess central-bank guidance, fueling speculation about tighter monetary policy.

The inflation data was released against a fraught trading backdrop, with the Trump's administration's announcement of tariffs on steel and aluminum imports having provoked rebukes from China and the European Union in recent days. How those trading partners now respond may have broader implications for global economic growth, analysts say.

"Trade and GDP growth are intimately linked. You've seen a big pickup in trade in the past six months, but now, that growth rate is slowing," said Edmund Shing, global head of equity derivative strategy at BNP Paribas. "The chances of a global recession in the next year or two are already rising and if you add to that a slowdown in the rate of trade -- not just a slowdown in trade growth -- it could have repercussions for global economies."

The market responded positively despite Mr. Tillerson's departure. He has had public and private differences with Mr. Trump over key national-security issues, including the 2015 Iran nuclear agreement, the administration's talks with North Korea, a dispute among Persian Gulf countries, and the Paris climate accord.

The yield on U.S. 10-year Treasurys edged down to 2.844%, according to Tradeweb, from 2.870% on Monday.

In corporate news, shares of chip maker Qualcomm fell 2.8% after President Trump on Monday blocked Broadcom's $117 billion hostile takeover bid on national security grounds.

Elsewhere, the Stoxx Europe 600 slipped 0.2%, after Asia-Pacific indexes shrugged off early pressure.

In Asia, Japanese stocks closed up 0.7%, paring earlier losses. The Shanghai Composite was down 0.5% after news that China plans to merge its banking and insurance regulators.

Allison Prang and Kenan Machado contributed to this article.

Write to David Hodari at David.Hodari@dowjones.com


(END) Dow Jones Newswires

March 13, 2018 10:14 ET (14:14 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
Add a Comment

Try Premium Membership today. Your first 14 days are free of charge. Start my Premium Membership Trial.
Sponsored Links
Buy a Link Now
Sponsor Center
Content Partners