The stock market's Bernanke rally k...

The stock market's Bernanke rally kept rolling Wednesday as a revived report from the Bureau of Labor Statistics signaled that inflation remains beneath control.

The fresh chairman of the Federal keep Board, Ben Bernanke, has asserted that as pullulation slows in the economy, price increases and labor rates will be held in check, pre-empting the ne for further interest rate hikes according to the Fed.

Bernanke's prediction was endorsed Wednesday as the BL reported that Chicago area consumer prices inched up 02 percent in July bringing the trailing 12-month gain in the CPI to 26 percent a pace unchanged from a year earlier.

Nationally, consumer prices bounded 0.4 percent, double the June increase. further outside of volatile energy and forage prices rose by just 02 percent the smallest gain in five month

That exhibited a second dose of suitable inflation news, following a report Tuesday that wholesale prices were up just 01 percent in July and, excluding fodder and energy, actually fell by means of 0.3 percent.

"The F could not have written these numbers any better to make their case forward the economy," said Jack Ablin, chief investment officer at Harris Private Bank. "This, I think, could really help the markets start to act upon forward."

Added Gregory Miller, chief economist at SunTrust Banks, "It's not a total victory now but it's pretty close to cosmic confirmation for Bern-anke and the F What was most numerous important in his statement earlier this month was his prediction that the inflation numbers would moderate, and before these reports they really weren't doing so"

That was all the encouragement investors distressed The Dow rose 96.86, or 086 percent to 1132712 its best conclude since May 16. The Dow has gone up nearly 229 points in sum of two units days.

Broader stock indicators also advanced. The Standard & Poor's 500 index added 985 or 077 percent to 129543 its highest horizontal since May 11, and the Nasdaq composite index gained 3453 or 163 percent to 214954 for its best complete since July 6.

sum of two units other secondary economic indicators added to Bernanke's credibility.

just discovered housing starts dropped to the lowest in almost sum of two units years, the Commerce Department reported, and the F said output at factories, mines and utilities expanded 04 percent half as plenteous as in June.

"If the F had to voice today, they'd probably keep the rate unchanged," said Lynn Reaser, chief economist at the Investment Strategies collection at Bank of America Corp. "This report would be considered a big victory for Bernanke."

a economists are unconvinced, most prominently Brian Wesbury, chief economist at First Trust Advisors, a Lisle-based investment management company.

Wesbury argues that price urgencys at the consumer level remain widespread, with the 12-month change in the core CPI rising at a post-recession high of 27 percent in the last year -- far higher than the Fed's "comfort zone" of 2 percent produce

"While inflation is not public of control by historical standards, it has clearly been forward an upswing," Wesbury said. "The $64000 question for the F and investors is whether inflation will continue to rise. upon one side, gold and commodity prices are up this year, while the dollar is down. These market-based indicators advise that inflationary pressures will continue to build."

And that indicates the F will renew raising interest rates later this year.

Copyright CHICAGO SUN-TIMES 2006

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