- The Washington Times - Friday, April 13, 2007

NEW YORK (AP) — Wall Street closed out a bumpy week with a moderate gain yesterday as investors, heartened by new inflation data, bought optimistically ahead of next week’s rush of earnings releases. The Dow Jones Industrial Average had its 11th advance in 12 sessions, and all the major indexes closed out the week higher.

After some wavering early in the day, investors ultimately decided to extend the climb yesterday, encouraged by the Labor Department’s Producer Price Index coming in flat for March, once volatile prices for energy and food were stripped out. Including energy and food, wholesale prices rose 1 percent, a smaller rise than the 1.3 percent jump in February.

The stock market’s advance was dampened only slightly by the University of Michigan’s consumer sentiment index, which weakened in early April and raised worries that consumers could rein in spending. The report also suggested that consumers are more uneasy about inflation than they were last month.

“Inflation is a little higher than investors would want, and the economy is a little weaker,” said Michael Strauss of CommonFund. “The equity market is put in a difficult position. The Fed might lower interest rates, but until we get closer to the easing process, stocks will see more gyrations up and down.”

The Dow closed up 59.17, or 0.47 percent, at 12,612.13.

The blue chip index was helped yesterday by news from Merck & Co., which rose $3.85, or 8.3 percent, to $50.21. The drug maker soared after a federal judge dismissed a lawsuit related to its discontinued arthritis pain reliever Vioxx, and after the company raised its profit outlook for 2007.

The broader Standard & Poor’s 500 Index gained 5.05, or 0.35 percent, to 1,452.85, and the Nasdaq Composite Index rose 11.62, or 0.47 percent, to 2,491.94. The Russell 2000 index of smaller companies rose 4.33, or 0.53 percent, to 819.38.

Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.77 percent from 4.74 percent late Thursday.

A Commerce Department report that the trade deficit improved for a second straight month gave some support to stocks, as did a turnaround in oil prices. Crude retreated slightly, falling 22 cents to $63.63 a barrel, after surging earlier in the day.

Analysts predict that the next few weeks will show that U.S. companies are still posting profit overall, but that growth in the first quarter will be slower than in past years.

General Electric Co. rose 20 cents to $35.38 after it posted first-quarter results that matched projections. However, the conglomerate said profit in one of its businesses was “tempered” by problems with subprime mortgage loans.

Apple Inc. said it would delay the release of Leopard, the next upgrade of its Mac operating system, until October. Apple fell $1.95, or 2.1 percent, to $90.24.

The Dow ended the week up 0.41 percent. The S&P; 500 advanced 0.83 percent. The Nasdaq rose 0.83 percent. The Russell 2000 rose 0.74 percent.

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