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Friday June 22nd, 2018 6:44PM

Stocks rise as consumer price report soothes inflation fears

By The Associated Press
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NEW YORK (AP) — U.S. stocks are moving higher Tuesday morning after the Labor Department said inflation remained in check last month. Technology and health care companies are leading the way. Qualcomm is skidding after President Donald Trump blocked a bid for the chipmaker by Singapore-based rival Broadcom. Trump said he opposed the deal because it could have been detrimental to national security.

KEEPING SCORE: The S&P 500 index climbed 16 points, or 0.6 percent, to 2,799 as of 10 a.m. Eastern time. The Dow Jones industrial average rose 173 points, or 0.7 percent, to 25,351. The Nasdaq composite added 33 points, or 0.4 percent, to 7,621. The Russell 2000 index of smaller-company stocks picked up 4 points, or 0.3 percent, to 1,605.

PRICES RIGHT: The government said prices paid by consumers rose 0.2 percent in February, matching estimates. Excluding food and energy costs, prices have risen 1.8 percent in the last year. Prices had jumped in January. Over the last month investors have worried about the prospect of faster inflation, but Tuesday's price report and the monthly jobs report on Friday suggest inflation isn't moving any more rapidly than it did in the recent past.

With investors expecting slower gains in rates, bond yields headed lower. The yield on the 10-year Treasury note slipped to 2.85 percent from 2.87 percent. Faster inflation would likely result in the Fed raising interest rates more quickly. Investors feared that could significantly slow the economy and the market's gains.

LEADERS: Among technology companies, chipmaker Nvidia rose $3.82, or 1.5 percent, to $253.58. Micron Technology jumped $2.93, or 4.9 percent, to $62.30. The chipmaker has gotten a big boost from analyst comments this week.

Health care products maker Johnson & Johnson climbed $2.66, or 2 percent, to $135.29 while drugmaker AbbVie gained $1.63, or 1.4 percent, to $119.93.

BROADCOM BLOCKED: Broadcom had been trying to buy Qualcomm for several months, most recently offering $117 billion. The deal would have been the largest in the history of the technology industry, although Qualcomm was trying to fend it off. While Trump's decision followed a recommendation from the Committee for Foreign Investment in the U.S., analysts said the move was unusual: Daniel Ives of GBH Insights called it "unprecedented" and said Qualcomm stock may be stuck around $60 for an extended period.

Qualcomm slid $1.74, or 2.8 percent, to $61.07. Broadcom picked up $8.54, or 3.3 percent, to $271.38. Intel, a competitor that was reported to be interested in trying to stop the deal, surged $1.91, or 3.7 percent, to $53.43.

Qualcomm is one of the biggest makers of processors that power smartphone and other mobile products, and the deal comes with other countries getting ready to build faster "5G" networks.

"Details of the security risk are likely around 5G cellular technology which Qualcomm, in our view, is well ahead of foreign and domestic competitors," said Stifel analyst Kevin Cassidy.

Qualcomm also holds critical patents in mobile technology and has been accused by Apple and some government regulators of abusing those patents to stifle competition and charge excessive royalties.

Trump also cited national security risks this month in announcing tariffs on imported aluminum and steel.

EARNINGS: Dick's Sporting Goods slumped after the chain reported disappointing holiday sales. Like many companies, Dick's is trying to fend off competition from Amazon.com and other online sports gear sellers. The stock lost $2.18, or 6.7 percent, to $30.38.

Shoe retailer DSW rose $1.01, or 5.2 percent, to $20.62 after investors were pleased with its quarterly report.

ENERGY: Benchmark U.S. crude added 18 cents to $61.54 a barrel in New York. Brent crude, used to price international oils, gained 22 cents to $65.17 per barrel in London.

CURRENCIES: The dollar rose to 106.87 yen from 106.35 yen. The euro rose to $1.2372 from $1.2336.

OVERSEAS TRADING: Britain's FTSE 100 lost 0.5 percent while the CAC 40 in France added 0.1 percent. Germany's DAX shed 0.3 percent.

The Japanese Nikkei 225 index gained 0.7 percent and the Kospi of South Korea added 0.4 percent. In Hong Kong, the Hang Seng was unchanged.

____

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay .

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets
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