Newspaper article THE JOURNAL RECORD

Wall Street Rallies in Heavy Trading

Newspaper article THE JOURNAL RECORD

Wall Street Rallies in Heavy Trading

Article excerpt

NEW YORK (AP) _ Stocks rallied in heavy trading Wednesday after government reports indicated the economy continues to gain strength but that inflation remains low.

The Dow Jones industrial average rose 30.95 to 3,746.29.

Advancing issues outnumbered declines by about 2 to 1 on the New York Stock Exchange.

Volume on the floor of the Big Board came to a heavy 354.98 million shares as of 4 p.m., up from 309.37 million the previous session.

The Federal Reserve reported that industrial production rose a strong 0.5 percent in November. That pushed the operating rate at American factories, mines and utilities to 84.7 percent of capacity, the highest level since April 1989.

Meanwhile, the Labor Department said consumer prices rose a still relatively modest 0.3 percent in November. The CPI had risen by 0.1 percent in October and 0.2 percent in September.

A day earlier, the government said inflation at the wholesale level rose 0.5 percent last month.

"The inflation reports were not as bad as some investors had worried they might be," said Rao Chalasani, chief investment strategist at Kemper Securities. "They indicate that inflation might not be the problem going forward many had thought."

Still, because the economic data were strong, analysts were in disagreement about whether that might persuade the Federal Reserve to boost interest rates for a seventh time soon. Fed policy-makers meet for the last time this year next Tuesday.

Stocks have taken a beating recently amid concern that rising rates will stall growth. Despite the anxieties, there has been little real data indicating that inflation is a problem, analysts said. …

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