US stocks close slightly higher as inflation data weighs

Traders work on the floor of the New York Stock Exchange. PHOTO: AFP

NEW YORK - Wall Street stocks finished modestly higher on Wednesday, regaining some of the ground lost in the prior session, though with the impact of disappointing US inflation data still reverberating through the markets.

The benchmark Dow Jones Industrial Average rose 0.1 per cent to finish the session at 31,135.09.

The broad-based S&P 500 was up 0.3 per cent to 3,946.01, while the tech-rich Nasdaq Composite Index climbed 0.7 per cent to 11,719.68.

"Early gains for US equities moderated in late-day action, but stocks were able to finish modestly higher, with yesterday's surprising consumer price inflation report remaining an overhang," Charles Schwab analysts said.

The consumer price index report Tuesday showed widespread inflation pressures, even though the annual CPI pace slowed in August.

That drove steep losses in equities, and data Wednesday showing only a modest slowing in the producer price index due to falling energy costs did little to ease immediate concerns.

The disappointing inflation data has left investors bracing for the Federal Reserve to continue its tough anti-inflation fight with another massive interest rate hike next week.

Among individual companies, Starbucks closed up 5.5 per cent after announcing plans to enhance its US stores and upgraded its revenue and profit outlook over the next three years.

Meanwhile, Union Pacific dropped 3.7 per cent as a major strike by US freight railroad workers loomed this weekend, with negotiations ongoing. AFP

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