NEW YORK — Wall Street closed out a bumpy week with a moderate gain Friday as investors, heartened by new inflation data, bought optimistically ahead of next week's rush of earnings releases. The Dow Jones industrials had their 10th advance in 11 sessions, and all the major indexes closed out the week higher.
After some wavering early in the day, investors ultimately decided to extend the climb Friday, encouraged by the Labor Department's Producer Price Index coming in flat for March, once volatile prices for energy and food were stripped out.
The stock market's advance was dampened only slightly by the University of Michigan's consumer sentiment index, which weakened in early April and raised worries that consumers could rein in spending. The report also suggested that consumers are more uneasy about inflation than they were last month. Inflation is a concern for the stock market if it gets so high that the Federal Reserve raises rates to curb it.
Though investors decided to buy ahead of next week's first-quarter results, which the market anticipates will show slowing corporate growth, inflation concerns are likely to keep factoring into stocks' performance — especially with the Consumer Price Index slated for next week.
"Inflation is a little higher than investors would want, and the economy is a little weaker," said Michael Strauss, chief economist at CommonFund. "The equity market is put in a difficult position. The Fed might lower interest rates, but until we get closer to the easing process, stocks will see more gyrations up and down."
The Dow closed up 59.17, or 0.47 percent, at 12,612.13.
The broader Standard & Poor's 500 index gained 5.05, or 0.35 percent, to 1,452.85, and the Nasdaq composite index rose 11.62, or 0.47 percent, to 2,491.94.
A report from the Commerce Department that the U.S. trade deficit improved for a second straight month gave some support to stocks. Also easing some inflation jitters, crude prices retreated slightly on the New York Mercantile Exchange, falling 22 cents to $63.63 a barrel after surging earlier in the day.
Analysts predict that the next few weeks will show that U.S. companies are still posting profit overall, but that growth in the first quarter will be slower than in past years.
"The U.S. economy is weak, and margins have compressed a bit," said Brian Gendreau, investment strategist for ING Investment Management. "Earnings cannot continue at a double-digit rate forever."