Wall Street Rallies as Data Meets Expectations

UAL Corp. and AMR Corp., the world's two largest airlines, gained as crude lost 2 percent. Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley rallied after so-called core prices climbed 0.2 percent. Microsoft rose sharply a day after it became apparent that the software titan and Yahoo would not be reaching a deal any time soon.

The Dow Jones Industrial Average jumped 126.52 points, or 1.04 percent to 12267.45 at 11:40 in New York, while the Standard & Poor's 500 index rose 15.18 points, or 1.13 percent, to 1355.05 and the Nasdaq Composite Index picked up 42.36 points, or 1.76 percent, to 2446.59.

The Labor Department said consumer prices jumped 0.6 percent in May, the largest rise since January, the latest inflation data was not as low as what Wall Street had been preparing for. When food and energy costs are stripped from the calculation, "core" CPI rose a more modest 0.2 percent last month.

Economists surveyed by Dow Jones Newswire expected that CPI rose 0.5 percent in May, while "core" was expected to rise 0.2 percent. The data comes as inflation has overtaken weak growth as the top concern for financial markets and for some officials at the Federal Reserve.

US Airways rose 16 percent to $3.15. After Thursday's market close, the carrier said its cutting capacity on routes by up to 8 percent and shedding 1,700 employees.