NEW YORK, Oct 15 (AFP): US stocks eked out modest gains in late morning trade Friday as the market sifted through a pile of data on inflation, output and consumer sentiment for clues on the direction of the economy.
The Dow Jones Industrial Average climbed 26.18 points (0.26 per cent) to 10,242.77 while the tech-heavy Nasdaq composite added 5.74 points (0.28 per cent) to 2,052.96 at 1530 GMT.
The broad-market Standard and Poor's 500 index drifted up 3.62 points (0.31 per cent) to 1,180.46.
The market was digesting several economic reports offering contrasting pictures of the economy, and an earnings report from conglomerate General Electric seen as upbeat.
The headline inflation figure surged 1.2 per cent -- the fastest pace in more than 25 years -- but the "core" inflation reading in the consumer price index (CPI), excluding food and energy prices, climbed just 0.1 per cent, below economists' expectations.
"The CPI numbers are a bit of a surprise," said John Hughes, managing director at Epiphany Equity Research.
"Excluding food and energy, the figures are pretty tame which means the recent inflationary worries are probably not as big a concern as they were."
The mainly positive report on inflation was offset by a weak reading in the University of Michigan consumer sentiment index, which fell to 75.4 from 76.9 in September, suggesting a possible pullback in spending.
"You saw some short covering and some buyers coming in this morning looking for a quick trade, but the disappointing University of Michigan number was used as an excuse or an opportunity to sell some of that early strength," said Michael Malone, trading analyst at SG Cowen.
Malone said the trend is for the market is to sell into strength because of deteriorating fundamentals.
"The Fed has made it clear they are going to continue raising interest rates, energy prices remain high and there is a lot of evidence to suggest they are beginning to impact the consumer. We're also entering the winter season and there has been a lot noise that heating bills are going to be up 30 per cent at least over the last year."
Other economic data was largely ignored. The Federal Reserve reported US industrial production fell 1.3 per cent in September as hurricanes Katrina and Rita and a strike at an aircraft producer dented output. US retail sales rose 0.2 per cent in September as high gasoline prices offset slumping auto sales, the Commerce Department estimated.
Among active shares, General Electric rose 22 cents to 34.24 after the company, often seen as a harbinger of the overall economy, reported a 15 per cent jump in quarterly profit and strong growth at all six business units.
Ford Motor Co. slid 33 cents to 8.66, pressured by a Citigroup downgrade amid concerns about the entire auto industry's problems with pensions and suppliers.
Texas Instruments fell 60 cents to 30.29 after Bear Stearns cut its rating on the chipmaker to peer perform from outperform due to increased competition, pricing pressure and a slower expected growth rate.
Continental Airlines meanwhile rose 50 cents to 11.67 as Lehman Brothers upgraded the carrier, saying industry fundamentals are improving.
The bond market fell slightly. The yield on the 10-year US Treasury bond rose to 4.477 per cent from 4.475 per cent Thursday and that on the 30-year bond to 4.708 per cent against 4.705 per cent. Bond yields and prices move in opposite directions.