U.S. Stocks Holding On To Modest Gains In Afternoon Trading

Stocks continue to see modest strength in afternoon trading on Tuesday, extending the upward move seen over the past few sessions. While buying interest has remained somewhat subdued, the major averages have once again reached their best intraday levels in well over a year.

Currently, the major averages are hovering near their best levels of the day. The Dow is up 111.90 points or 0.3 percent at 36,516.83, the Nasdaq is up 50.16 points or 0.4 percent at 14,482.64 and the S&P 500 is up 9.75 points or 0.2 percent at 4,632.19.

The modest strength on Wall Street comes following the release of a highly anticipated Labor Department report showing U.S. consumer prices inched up in line with economist estimates in the month of November.

The Labor Department said its consumer price index crept up by 0.1 percent in November after coming in unchanged in October. The uptick matched expectations.

Excluding food and energy prices, core consumer prices rose by 0.3 percent in November after edging up by 0.2 percent in October. The increase in core prices also came in line with estimates.

The report also said the annual rate of consumer price growth slipped to 3.1 percent in November from 3.2 percent in October, while the annual rate of core consumer price growth was unchanged at 4.0 percent.

The data has added to optimism about the outlook for interest rates ahead of the Federal Reserve’s monetary policy announcement on Wednesday, although traders seem reluctant to make more significant moves.

While the Fed is widely expected to leave interest rates unchanged, traders will be looking to the accompanying statement and projections for signs the central bank could begin cutting rates next year.

“The market remains steadfast in its belief that the Fed will cut rates as early as this spring, although the Fed may want to keep its options open if its campaign to quell inflation hasn’t completed the more difficult ‘last mile,'” said Quincy Krosby, Chief Global Strategist for LPL Financial.

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