NEW YORK, Jan 14 (AFP) - Wall Street bounced higher Friday, recovering from steep losses in the prior session as sentiment got a lift from news of a sharp drop in wholesale prices and a strong report on industrial production.
The Dow Jones Industrial Average climbed 27.73 points (0.26 percent) to 10,533.56 while the Nasdaq composite added 10.97 points (0.53 percent) to 2,081.53 at 1700 GMT.
The broad-market Standard and Poor's 500 index edged up 4.13 points (0.35 percent) to 1,181.58.
Analysts were expecting a a relief rally after the previous session's steep declines that pushed the Dow to its lowest level in five weeks and the Nasdaq to its lowest point in eight weeks.
"We're going to have some sort of technical rebound in the early going but it is Friday ahead of a long weekend so I would suspect that if there are any gains they will be quite limited," said Peter Cardillo, chief market analyst and strategist at SW Bach.
Setting a positive tone for stocks was the Labor Department's report that US prices of raw materials and other producers' inputs fell 0.7 percent in December. This marked the largest monthly decline in wholesale prices since April 2003.
Also, the Federal Reserve said US industrial output increased 0.8 percent in December, a report better than expected by private economists.
Some traders said the market's momentum remains to the downside for now.
"The market's been pretty much in a tailspin and I don't think the wholesale inflation number is going to be the thing that gives you a big bounce," said Stephen Massocca, president and head of trading at Pacific Growth Equities.
Massocca said market momentum could turn on reports of outperformance as earnings season unfolds.
But the market got a big disappointment from General Motors after the auto giant said its profits could miss the market's average estimate, in part on rising health-care costs.
GM shares dipped four cents to 37.28, while rival Ford edged up three cents to 14.11.
Fellow blue chip Boeing fell 11 cents to 50.11 after it canceled its production of its 717 series aircraft and announced a series of charges for ending that program as well as the canceled Air Force 767 Tanker program.
Pacing the Dow advance was a sharp climb in shares of Walt Disney, up 52 cents at 28.27 after Merrill Lynch upgraded the media and entertainment giant on expectations the company's earnings momentum will continue.
In technology, Sun Microsystems fell 36 cents to 4.22 after the group met Wall Street earnings forecasts but fell short on the revenue side.
Bonds slipped despite the tame inflation news. The yield on the 10-year US Treasury bond rose to 4.216 percent from 4.187 percent Thursday and that on the 30-year bond to 4.722 percent from 4.716 percent. Bond yields and prices move in opposite directions.
01/14/2005 17:10 GMT - AFP