Share this article

print logo


Stocks rose today, lifting the Nasdaq composite index into record territory, after the government's report of a drop in wholesale prices eased investor concerns about higher interest rates.

At 3 p.m., the Dow Jones industrial average was up 25.33 at 11,104.73. The blue-chip index had backed off from a gain of 62 points.

The Nasdaq composite index was up 42.50 at 2,894.52, moving past its closing high of 2,864.48, set July 16. The Standard & Poor's 500 index was up 7.27 at 1,354.93.

The Labor Department said rising energy costs pushed wholesale prices up a higher than expected 0.5 percent during August. But when the volatile energy and food categories are excluded, wholesale prices actually fell 0.1 percent.

Financial markets tend to set aside food and energy price changes and focus on the figure known as core inflation. The 0.1 percent drop in core inflation last month was better than economists expected.

The markets have been uneasy lately amid concerns that the Federal Reserve, which has already raised interest rates twice this year, would push rates higher a third time because of the economy's continuing strength. Today's report helped alleviate some of those concerns.

"This was pretty much the icing on the cake," said David Orr, chief economist at First Union Capital Markets Group in Charotte, N.C. "The market is correct to now relax, at least temporarily."

EBay Inc. shares climbed 9 to 153 7/1 6 on optimism that demand for the No. 1 Internet auctioneer's service is growing heading into the holiday shopping season, analysts said.

Jamie Kiggen, an analyst at Donaldson, Lufkin & Jenrette Inc., reiterated his "buy" rating on eBay, saying the stock could reach 300 within 12 months.

A "Free Listing Day" resulted in a 50 percent increase in listings in a 24-hour period with no problems to eBay's computer infrastructure, he said.

AppNet Systems Inc., an Internet consulting and services company, rose 16 9/1 6 to 32 1/1 6 after Wayne Segal, an analyst with Credit Suisse First Boston, said its services are in high demand as electronic commerce over the Internet increases.

National Semiconductor Corp. rose 3 to 35 after the maker of chips for phones and video equipment reported a first-quarter loss from operations of 1 cent a share, narrower than the 14 cents expected by analysts polled by First Call/Thomson Financial. Sales of its chips for mobile phones, communications equipment and television set-top boxes improved.

American Express, rising on the prospect of stable interest rates, led the Dow higher, rising 3 3/1 6 to 141 1 3/1 6. IBM was up 3/4 at 135 1/2 .

Advancing issues outnumbered decliners by a 5-to-4 margin on the New York Stock Exchange, where volume came to 558.4 million shares, up from Thursday's pace.

The Russell 2000 index was up 2.27 at 440.04.

There are no comments - be the first to comment