Stocks Open Higher as Inflation Gauge Falls

The Dow rose for a seventh straight day Wednesday as a renewed pledge from the Fed for low rates and a drop in inflation at the producer level helped fuel the market's momentum.

The Dow was up about 30 points at the open, led by Aloca , General Electric and Bank of America .

Merck and Pfizer were among the handful of Dow decliners.

This comes after the Nasdaq closed Tuesday at its highest since August 2008 and the S&P reached its highest since October 2008.

The S&P 500 and Nasdaq both rose to fresh 18-month highs this morning, raising questions about whether this is a full-on breakout for the market from the recent trading range.

"I do believe we're going to break out [of the recent range] here a little bit," Jeffrey Phillips, chief investment officer at Rehmann Financial, said on CNBC this morning. "I think we're going to see some strong earnings numbers coming out here at the end of the first quarter ... I think we've got some momentum that's going to carry us on the domestic side and we are excited about the international equity side as well ... we believe that's more undervalued than on the domestic side."

Art Cashin, director of floor operations at UBS, said he thinks the market may get the luck o' the Irish today and keep going — on one condition.


"A lot will depend upon what happens with the euro, though — that's been the single, solitary driver of gold and oil and also stocks, so it'll be all about currencies," Cashin said on CNBC this morning. "If we stop to watch the parade, maybe take a minute to listen to Bernanke's testimony but the concentration will be on the currencies."

Fed Chairman Ben Bernanke will be testifying before a House Panel at 2pm ET today on the central bank's role in supervising smaller banks.

(Watch Becky Quick's interview with Art Cashin this morning.)

Producer prices fell 0.6 percent last month, the largest decline since July, following a 1.4-percent rise in January.

Federal Reserve Chairman Ben Bernanke is back in the spotlight, testifying before Congress on why the Fed should keep the powers it currently has in any financial regulation reform. That comes a day after the Fed's policy statement that retained the "exceptionally low rates for an extended period" language.

That language notwithstanding, a new Reuters poll does show 59 percent of banks predicting that the Fed will raise rates sometime before the end of this year.

It's an extremely light day on the earnings calendar but one report of note will come after the bill, when athletic footwear and apparel maker Nike issues its quarterly numbers.

Microsoft may be a stock to watch after the company lost a $106 million patent verdict in a case involving internet communication methods. Microsoft does say it will appeal.

The war of words between the U.S. and China over the yuan continues, with Chinese officials saying they "could not be any clearer" in their repeated commitment to a stable exchange rate. That comes after Congress threatened to levy duties on Chinese exports unless the currency is revalued.

And the Bank of Japan has eased monetary policy by doubling the amount of money available to banks for three-month loans. The move came in a split vote.

This Week:

WEDNESDAY: St. Patrick's Day; weekly crude inventories
THURSDAY: March Madness begins; CPI; weekly jobless claims; Fed's Hoenig, Lacker & Pianalto speak; current account; leading indicators; Philly Fed; earnings from FedEx
FRIDAY: Quadruple witching; S&P index rebalancing

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