NEW YORK - Stocks rose on Wednesday as a strong profit outlook from Hewlett-Packard Co lifted technology shares and the Federal Reserve signaled its intention to keep cutting rates.

Hewlett-Packard shares jumped nearly 8 percent while International Business Machines Corp rose 2.7 percent as investors bet strong overseas sales will sustain profits in the computer industry. HP shares led the major advancers in both the Dow and the S&P 500.

The broader market slipped in early trading after data showing a surge in consumer prices last month, raising concern that the Fed may have to hold back on further rate cuts.

"Policy is already in an exceptionally accommodative mode, in my view. I think any further cuts are total overkill here, but appears willing to go down that path," said Michael Darda, chief economist at MKM Partners LLC, in Greenwich, Connecticut. "They basically suggested that policy is likely to remain easier for a while."

The Dow Jones industrial average shot up 90.04 points, or 0.73 percent, tot 12,427.26. The Standard & Poor's 500 Index <.SPX> gained 11.25 points, or 0.83 percent, to 1,360.03. The Nasdaq Composite Index <.IXIC> advanced 20.90 points, or 0.91 percent, to 2,327.10.

Both the Dow and Nasdaq snapped a three-day losing streak.

Oil's record settlement above $100 a barrel for a second day boosted energy companies' shares and helped drive the market's advance Wednesday afternoon. Earlier in the day, U.S. oil futures set an intraday record above $101. In contrast, Tuesday's record high in oil, however, caused a late-day sell-off in stocks.

Shares of Chevron Corp , which began trading as a Dow component on Tuesday, rose 1.8 percent to $86.34 on the New York Stock Exchange. Chevron was among the major advancers in both the Dow and the S&P 500.

Shares of HP, which reported quarterly profit that beat Wall Street's estimates late on Tuesday, climbed to $47.44, while IBM shares rose to $107.85.

On the Nasdaq, shares of mobile phone chip maker Qualcomm Inc led advancers with a gain of 3.4 percent to $43.37.

Minutes from the Fed, which cut the target for its benchmark rate by half a percentage point to 3 percent at the January meeting, said it had lowered its growth forecast for 2008.

Labor Department data before the market opened showed the U.S. Consumer Price Index increased to an unexpectedly strong 4.3 percent annual rate in January from an already elevated 4.1 percent in December.

Trading was moderate on the New York Stock Exchange, with about 1.5 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.3 billion shares traded, above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones on the NYSE by about 5 to 3 and on the Nasdaq by about 4 to 3.

Is this article useful to you?