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US close: Mild inflation helps stocks

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Date: Wednesday 14 May 2008

LONDON (ShareCast) - US stocks finished in the blue even though stocks retreated near the close as excitement over better than expected inflation figures quickly wore off.

Dow Jones finished up 66 at 12,898. S&P 500 added 5 points at 1,408. The NASDAQ Composite gained 1 point at 2,496. All indices were much higher at midday.

The Labor Department said Consumer Price Index (CPI) rose 0.2% in April after rising 0.3% the previous month. Expectations were of a 0.3% increase. Stripping out food and energy costs, the core CPI rose 0.1% versus predictions of a 0.2% increase. The decline in prices comes despite the largest jump in food prices in 18 years.

In company news, US home funding firm Freddie Mac posted a widening of first quarter losses to $151m as the housing market deteriorated, though the results were better than expected. It also said that it plans to raise $5.5bn. The shares advanced strongly on the news, dragging fellow mortgage buyer Fannie Mae along for the ride.

Department store operator Macy's posted a loss of $59m in the first quarter due to poorer sales and increased costs but it was still better than Wall Street’s expectations.

Radio broadcaster Clear Channel said late Tuesday that it has agreed to a lower buyout offer from private equity firms.

Investors turned sour on Whole Foods Market after the natural foods grocer reported a slowdown in sales growth and lower than expected second quarter profits.

Farm machinery manufacturer Deere stumbled after downgrading revenue guidance for its third quarter. Deere said Q3 revenue may top out at $575m, versus a median forecast of $654.6m among analysts covering the company.

S&P 500 - Risers
Freddie Mac (FRE) $27.25 +9.17%
Pulte Homes, Inc. (PHM) $13.77 +6.83%
Lennar Cp Cl A (LEN) $19.93 +6.46%
Novellus Systems, Inc. (NVLS) $23.26 +6.40%
Fannie Mae (FNM) $29.89 +6.29%
E Trade Financial Corp (ETFC) $4.13 +6.17%

S&P 500 - Fallers
Whole Foods Market, Inc. (WFMI) $28.96 -13.91%
Deere Co (DE) $81.21 -9.96%
Manitowoc Co. (MTW) $40.63 -5.25%
Sovereign Bancorp (SOV) $8.21 -4.53%
Range Res Corp (RRC) $68.32 -3.56%
St. Jude Medical (STJ) $39.90 -3.51%

Dow Jones I.A - Risers
Hewlett Packard Co (HPQ) $45.64 +3.09%
Verizon Commun (VZ) $38.90 +2.07%
Merck Co Inc (MRK) $39.83 +1.68%
Wal Mart Stores (WMT) $57.38 +1.29%
Home Depot Inc (HD) $29.10 +1.22%
Walt Disney-Disney C (DIS) $34.74 +1.19%

Dow Jones I.A - Fallers
Caterpillar Inc (CAT) $82.75 -1.57%
McDonald's Corporation (MCD) $60.44 -1.19%
Procter Gamble Co (PG) $65.50 -0.35%
Alcoa Inc (AA) $42.00 -0.28%
General Motors (GM) $20.19 -0.05%
Chevron Corp (CVX) $97.72 -0.01%

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