Business

Stocks rise moderately on benign inflation data

Petroleum IndustryConsumersMoney and Monetary Policy
Stock prices rise after report shows inflation is in check
Higher gasoline prices could weigh on consumer confidence

Stocks opened moderately higher Friday as benign inflation data counter-balanced a downtick in consumer confidence.

As of 8 a.m. Pacific time, the Dow Jones industrial average had risen 40.98 points, or 0.2%, to 16,775.17.

The Standard & Poor's 500 index was up 5.75 points, or 0.3%, to 1,935.86.

Still, share prices appear to be headed for their first weekly decline in four weeks after falling each of the last two days.

Stocks advanced Friday after a report showed that inflationary pressures remain in check, suggesting that stagnant wages are offsetting recent improvement in the job market.

Wholesale prices fell 0.2% last month and are up a modest 2% in the last 12 months, according to a Labor Department report. Economists had expected a 0.1% increase in May.

It’s unclear, however, whether prices will remain subdued if the turmoil in Iraq escalates. The clash between militants and the government has pushed crude-oil prices higher in recent days.

“Consumers should brace for some additional wallet-withdrawals in doing their weekly errands as higher gasoline prices will probably join higher food prices very shortly,” Michael Montgomery, an economist at IHS Global Insight, wrote in a report Friday morning.

Consumer confidence already is showing a bit of wariness. Sentiment fell to a three-month low after unexpectedly slipping in June, according to a Thomson Reuters/University of Michigan index.

Even as the economy has added jobs at a decent clip in recent months, recent data, such as sluggish retail sales, suggest that growth is choppy.

Follow Walter Hamilton on Twitter: @LATwalter

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