NEW YORK (AFP) - Wall Street stocks finished a choppy session modestly higher on Wednesday (Jan 12), gaining for a second straight day following data showing another spike in consumer prices.

The Labour Department said its consumer price index jumped by 7 per cent last year, its fastest pace in four decades.

However, the month-on-month increase slowed to 0.5 per cent from November, indicating the price surge may be stabilising.

"Inflation is not slowing down just yet, but the peak is getting close," Oanda's Edward Moya.

The Dow Jones Industrial Average edged up 0.1 per cent to 36,290.32.

The broad-based S&P 500 advanced 0.3 per cent to 4,726.35, while the tech-rich Nasdaq Composite Index climbed 0.2 per cent to 15,188.39.

The gains extended Tuesday's rally, when markets viewed congressional testimony by Federal Reserve chairman Jerome Powell as largely in line with expectations for the central bank's response to inflation.

Analysts said the latest consumer price report did not imply the Fed would adopt a more aggressive course than the one outlined by Powell.

Later on Wednesday, a Fed report said more American businesses began seeing prices fall or stabilise as 2021 drew to a close.

Most of the people who spoke to the Fed's regional banks reported "solid growth" in prices, but the report said "some also noted that price increases had decelerated a bit from the robust pace experienced in recent months."

Among individual companies, Biogen fell 6.7 per cent after the US health officials said they would cover the company's Alzheimer's disease drug but only for a narrow subset of patients.