(Corrects fourth paragraph to note Russell 2000 neared a record
* Dollar falls, commodities climb on QE3
* Retail sales, CPI rise
* Indexes up: Dow 0.5 pct, S&P 0.6 pct, Nasdaq 0.9 pct
By Chuck Mikolajczak
NEW YORK, Sept 14 (Reuters) - Commodity-related stocks led a
rally in U.S. equities Friday, putting the S&P 500 on track for
a fourth straight day of gains as investors cheered an
aggressive plan by the Federal Reserve to stimulate the economy.
The Federal Reserve launched another stimulus program
Thursday, its third quantitative easing measure, saying it would
pump $40 billion into the U.S. economy each month until the jobs
market showed sustained growth.
The Fed announcement lifted the benchmark S&P 500 index to
its highest intraday level since Jan. 2, 2008.
Big-cap giants Apple Inc and Exxon Mobil,
the two largest companies in the U.S. by market value, continued
to scale multi-year highs, and the small-cap Russell 2000
nea red a record peak.
U.S. retail sales rose 0.9 percent in August, advancing for
a second straight month, boosted by automobiles and high
gasoline prices, but the underlying tone pointed to modest
economic growth in the third quarter.
"When you start to decompose the look of what happened in
the retail number, people are going to start to back away a
little bit; although the numbers weren't any surprise, they were
pretty much on consensus," said Sandy Lincoln, chief market
strategist at BMO Asset Management U.S. in Chicago.
"It (also) adds a little bit of additional credibility and
validity, if anybody needed it, for what (Fed Chairman Ben)
Bernanke did yesterday."
U.S. consumer prices rose 0.6 percent in August, the most in
three years as the cost of gasoline jumped, but there was little
sign of a pick-up in underlying inflation pressures.
The Dow Jones industrial average gained 73.50 points,
or 0.54 percent, to 13,613.36. The Standard & Poor's 500 Index
rose 9.31 points, or 0.64 percent, to 1,469.30. The
Nasdaq Composite Index climbed 29.42 points, or 0.93
percent, to 3,185.24.
S&P Dow Jones Indices said UnitedHealth Group Inc
will replace Kraft Foods Inc in the Dow Jones Industrial
Average after the close of trading Friday, Sept. 21. Kraft is
being removed as a result of its decision to spin off its North
American grocery business. UnitedHealth shares rose 1.1 percent
to $54.48 and Kraft slipped 0.3 percent to $40.03.
U.S. industrial output fell 1.2 percent in August, the most
in more than three years as production slowed in factories and a
hurricane temporarily shut down oil and natural gas rigs in the
Gulf of Mexico. Analysts polled by Reuters had expected
industrial output to be flat last month.
The Fed announcement also pushed the dollar down 0.5
percent, boosting commodities by raising the allure of those
priced in a weaker U.S. currency. Freeport-Mcmoran Copper & Gold
Inc rose 3.7 percent to $42.32 and Alcoa Inc
advanced 2.6 percent to $9.88. The PHLX gold/silver index
climbed 3.2 percent to its highest since early March.
The Thomson Reuters/University of Michigan's preliminary
September consumer sentiment index rose to 79.2, its highest
level in four months, as Americans were more upbeat about their
economic and job prospects.
Lastly, U.S. business inventories increased 0.8 percent in
July, the largest gain in six months in July.
Staples Inc gained 4.5 percent to $12.50 after
Fortune reported several private equity firms, including Bain
Capital, were considering a buyout offer for the office
(Editing by Kenneth Barry)