Stocks climbed on Wednesday, pushing the Dow to a recovery high, after a benign February inflation reading buttressed the Fed's renewed vow of low interest rates.
Data from the Labor Department prior to the market open showed a steeper-than-expected drop in the February Producer Price Index, indicating inflation pressure was minimal and further supporting the near-zero interest rates that have helped propel the rally in equities.
The Dow industrials rose for a sixth consecutive session on Tuesday to reach a 17-month high, and the S&P 500 and the Nasdaq Composite also hit fresh multi-month highs.
It doesn't appear as if there is any inflation fears out there -- the market is not spooked at all, said Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.
The course of least resistance is up, the trend is up, people are stepping up to the plate whenever the market pulls back.
The winning streak for the blue-chip Dow is the longest since an eight-day run in August 2009, which saw the index rise 4.9 percent. In the last seven session to Wednesday's intraday high, the Dow is up 2.04 percent.
Investors expect the S&P 500 to rise 10 percent during 2010, according to a quarterly Reuters poll published Wednesday.
The Dow Jones industrial average <.DJI> gained 80.64 points, or 0.75 percent, to 10,766.62. The Standard & Poor's 500 Index <.SPX> rose 10.14 points, or 0.87 percent, to 1,169.60. The Nasdaq Composite Index <.IXIC> climbed 19.88 points, or 0.84 percent, to 2,397.89.
Coal miner Massey Energy Co
U.S. crude oil futures rose 1.5 percent to 82.90 a barrel after the latest inventory data, which showed fuels inventories fell more than forecast last week.
Hartford Financial Services Group Inc
Discover Financial Services
Federal Reserve Chairman Ben Bernanke has begun his defense before a Congressional committee of the central bank's role in supervising smaller banks, which it would lose in regulatory reform proposals.
(Editing by Padraic Cassidy)