By Sruthi Shankar
(Reuters) - Wall Street was higher on Thursday after U.S. consumer prices increased modestly in April, cooling worries of accelerating inflation that would have made a case for faster interest rate hikes.
A Labor Department report showed its consumer price index (CPI) rose 0.2 percent, below the economists' expectation of 0.3 percent, as rising costs for gasoline and rental accommodation were tempered by a moderation in healthcare prices.
Excluding the volatile food and energy components, consumer prices rose 2.1 percent year-on-year in April, matching March's increase.
U.S. Treasury yields added to their earlier decline after the data.
The stock market has been riding an oil rally for the past two days following President Donald Trump's decision to withdraw the United States from a nuclear deal with Iran.
Oil prices were on track for their biggest weekly increase in a month on expectations of potential disruption to crude flows from major exporter Iran as the United States plans to reimpose sanctions.
Rising oil prices have helped the S&P 500 energy index outperform other major sectors in the quarter with gains of 12.6 percent.
"The market wants to see a breakout in a particular sector," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. "So far, we've had in energy."
"If the kind of gains we saw yesterday holds over, people will move into the market. The next level of resistance to watch is probably around where we closed 2,700."
At 9:53 a.m. EDT the Dow Jones Industrial Average was up 94.74 points, or 0.39 percent, at 24,637.28, the S&P 500 was up 11.44 points, or 0.42 percent, at 2,709.23 and the Nasdaq Composite was up 27.53 points, or 0.38 percent, at 7,367.43.
Among stocks, Wells Fargo rose 1.1 percent after the lender said it expects efficiency efforts to cut expenses by $2 billion annually in 2018 and 2019.
Qualcomm rose 2.3 percent after the chipmaker approved a new $10 billion share buyback program that replaces the previous $15 billion program.
Nvidia, which is set to report earnings after the closing bell on Thursday, was up 1.2 percent.
Macy's dropped 4.9 percent after Morgan Stanley downgraded the retailer's stock to "underweight".
Advancing issues outnumbered decliners by a 2.49-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded 25 new 52-week highs and 2 new lows, while the Nasdaq recorded 78 new highs and 11 new lows.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)
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