Dow climbs 253 as stocks rise for 4th straight day

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Prices of U.S. Treasuries fell on the inflation data.

A closely watched barometer of "core" US consumer prices, which excludes the volatile categories of food and energy, rose 0.3 percent from December to January, the Labor Department said Wednesday. Lower retail sales could point to lower inflation-which complicates a decision to raise interest rates. Food prices barely rose overall, but tomato prices shot up 16% compared with a year ago, the largest increase since 2014.

What do the inflation numbers mean for the markets?

The stock market's rise Wednesday coincided with a big drop in Wall Street's "fear gauge", known as the VIX.

MSCI's all-country world index of stocks in 47 countries gained 1.42 per cent while the pan-European FTSEurofirst 300 index of leading regional shares rose 1.03 per cent to close at 1,469.00.

Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after dropping 0.2 percent in December.

In January 2018, food inflation on a year-on-year basis was highest in Kwara (24.46%), Nasarawa (22.77%) and Bayelsa (22.60%), while Bauchi (13.34%), Anambra (14.63%) and Benue (14.78%) recorded the slowest rise in food inflation.

The fed funds rate is now at 1.42 percent. Feroli now expects the economy to expand at a 2.5 percent annual rate in the first quarter, down from an earlier estimate of 3 percent.

Engineering and industrial services business Bilfinger surged 5.77 percent after narrowing its Q4 loss.

The market's positive reaction to today's stronger-than-expected CPI could be due to the fact that the spike wasn't massive, and also came on a day when January retail sales came in weaker than expected, said Mike Loewengart, VP of investment strategy at E-Trade. The company intends to sell part of its 21.3 percent stake in Japan-listed Yakult Honsha Co.

Wall Street recovered some of the loses from the previous week
Disney agreed to buy Fox's movie and television studios and some cable and global TV businesses in December for $52.4 billion. Inflation in particular will be of interest as it could affect expectations of more rate increases the Federal Reserve.

Man United, Celtic mourn former player Liam Miller
Mourners heard how Miller was known by Billy, a Scot from Motherwell and a passionate Celtic fan, as "my little Stanley Matthews". FORMER Man Utd and Celtic footballer Liam Miller's funeral has taken place today after the star's tragic cancer death on Friday.

Esteban Loaiza was reportedly dealing cocaine near preschool
Earlier today, former Yankees right-hander Esteban Loaiza was arrested in San Diego with almost 50 pounds of cocaine and heroin. In addition to the possession charge, Loaiza was also charged with two counts of transporting and possessing narcotics to sell.

Trump's $US4.4 trillion budget proposal suggests Congress could cut the federal budget deficit by $US3 trillion over 10 years. The bank posted double-digit growth in the fourth quarter despite a one off tax surcharge in France. The funds rate now is 1.42 percent. I still think we're going to go above 3 percent, but not now.

While inflation decreases consumer purchasing power, a certain level of inflation is considered a reflection of a strengthening economy and the impact on consumers can be offset by rising wages.

Galliford Try plunged 18.99 percent on equity dilution worries after the construction group and homebuilder announced a £150m capital raising to help cover the impact of Carillion's liquidation.

Yields continued to move higher in afternoon trading, with the 10-year touching 2.91 percent, the highest since January 2014.

Retail giant H&M dropped 4.63 percent in Stockholm after saying 2018 will be challenging.

But why did inflation expand faster than expected?

Markets initially turned lower after data on Wednesday morning showed that inflation surpassed expectations for a second straight month, triggering nervousness the uptick in price pressures could force the Federal Reserve to accelerate its pace of tightening. Inflation rose 2.1 percent from a year earlier and core prices increased 1.8 percent.

The report released today should give more confidence that inflation pressures are rising in the US economy.

Economists polled by Reuters had forecast the CPI increasing 0.3 percent in January and the core CPI rising 0.2 percent.

Meanwhile, the yield on the U.S. 10-year Treasury, was up 4.2 basis points to 2.871 per cent, while that on the more policy sensitive 2-year was up 4.7 basis points to 2.151 per cent. Yields move inversely to price.

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