The US markets ended sharply higher on Thursday, with Nasdaq settling higher over seven percent, following the release of a report from the Labor Department showing a smaller than expected monthly increase in consumer prices as well as a bigger than expected slowdown in the annual rate of price growth. The Labor Department said its consumer price index rose by 0.4 percent in October, matching the increase seen in September. Street had expected consumer prices to climb by 0.6 percent. The annual rate of growth in consumer prices also slowed to 7.7 percent in October from 8.2 percent in September. The year-over-year increase was the smallest since January and came in below estimates for an 8.0 percent jump.
The report also showed core consumer prices, which exclude food and energy prices, edged up by 0.3 percent in October after advancing by 0.6 percent in September. Street had expected core prices to rise by 0.5 percent. The annual rate of growth in core prices also slowed to 6.3 percent in October from 6.6 percent in September, coming in below estimates for 6.5 percent growth. The data suggests the Federal Reserve's efforts to contain inflation are having an effect, reinforcing recent optimism the central bank will slow the pace of interest rate hikes as early as next month. On the sectoral front, interest rate-sensitive housing stocks moved sharply higher on the day, with the Philadelphia Housing Sector Index skyrocketing by 10.3 percent to its best closing level in well over two months.
Dow Jones Industrial Average surged 1,201.43 points or 3.7 percent to 33,715.37, Nasdaq rose 760.97 points or 7.35 percent to 11,114.15 and S&P 500 was up by 207.8 points 5.54 percent to 3,956.37.
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