New York — Stocks bounded higher Wednesday as investors shrugged off a fresh indicator of rising inflation and welcomed an $11 billion deal that combines retailers Kmart Holding Corp. and Sears, Roebuck and Co.
The merger -- the largest such transaction involving U.S. retailers -- along with strong data on industrial production and a jump in housing construction overshadowed a worrisome reading of the Consumer Price Index, the government's most closely watched inflation barometer.
Kmart to acquire Sears for $11B"This is a terrific rebound, and startling in the face of the twin jumps in inflation that we've had over the last couple of days," said Ken Tower, chief market strategist for Schwab's CyberTrader. "The market is definitely saying that inflation is not the problem right now, it's still a question of growth.
"Mergers are bullish in general, because they show business confidence. ... I think the merger just backs up the economic stuff. It's part of the same growth-in-the-economy theme."
The Dow Jones industrial average finished up 61.92, or 0.59 percent, at 10,549.57, after surging more than 100 points earlier in the day. The broader gauges also were higher.
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