Traders Cheer Tame Inflation

Stocks rose Friday on a tame consumer inflation report that reinforced expectations that the Federal Reserve is done raising interest rates for now.

Stocks neared multi-year highs before pulling back to close with modest gains, weighed down by weakness in the auto sector.

The Federal Reserve meets again Wednesday to set interest rate policy, a day after a wholesale inflation report that’s also expected to show restrained inflation.

Shares of Adobe Systems surged 10% on third-quarter results that beat Wall Street forecasts.

California Micro soared 20% after raising guidance, while Tektronix slumped 3.4% after lowering expectations.

Applied Micro fell 9% after the company said it will restate results after a review of stock option practices.

After the close, Freescale shares jumped 6% on a buyout offer.

The Nasdaq rose 6 to 2235, the S&P 500 added 3 to 1319, and the Dow gained 33 to 11,560. Volume soared to 3.15 billion shares on the NYSE, and 2.55 billion on the Nasdaq. Advancers led 19-13 on the NYSE, and 15-14 on the Nasdaq. Upside volume was 53% on the NYSE, and 54% on the Nasdaq. New highs-new lows were 274-56 on the NYSE, and 201-85 on the Nasdaq.

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