* CPI tops expectations, helping to lift financial stocks
* Oil falls; Obama considers military options in Iraq
* "Momentum" shares rally and help boost the Nasdaq
* Dow up 0.2 pct; S&P 500 up 0.2 pct; Nasdaq up 0.4 pct
(Updates to close)
By Ryan Vlastelica
NEW YORK, June 17 U.S. stocks rose on Tuesday as
data pointing to higher inflation lifted financial shares while
high-growth tech names attracted renewed attention.
The S&P financial sector index was the day's biggest
gainer, up 0.9 percent, though all cyclical sectors, which are
tied to the pace of economic growth, outperformed for the day.
E*Trade Financial was the S&P 500's top gainer, up 7.7
percent at $22, while Charles Schwab Corp climbed 5.5
percent to $27.30.
The Consumer Price Index rose 0.4 percent in May, the
biggest gain in more than a year, pushing investors to sell some
U.S. government debt. The yield on the 10-year Treasury note
shot up as high as 2.65 percent .
"Typically inflation accompanies economic growth, so this is
a positive, especially with people looking for any reason to
buy," said Carl Kaufman, who helps manage $7 billion at the
Osterweis Strategic Income Fund in San Francisco.
About 5.61 billion shares traded on all U.S. platforms,
according to BATS exchange data, above the month-to-date average
of 5.36 billion.
U.S. crude futures fell 0.5 percent to settle at
$106.36 a barrel after President Barack Obama considered options
for military action in response to a Sunni militant onslaught in
Iraq. Market participants are closely monitoring the violence
there, worried that it could lead to high oil prices for an
extended period. Exxon Mobil Corp fell
0.5 percent to $102.42.
The Dow Jones industrial average rose 27.48 points or
0.16 percent, to end at 16,808.49. The S&P 500 gained
4.21 points or 0.22 percent, to 1,941.99. The Nasdaq Composite
added 16.13 points or 0.37 percent, to 4,337.23.
"Momentum" stocks, marked by hyper levels of growth and
concerns about excessive valuation, gave the Nasdaq an outsized
advance. Expedia Inc rose 4.1 percent to $77.62 while
Netflix Inc added 3.1 percent to $443.65. Keurig Green
Mountain gained 4.6 percent to $125.49; the stock has
jumped 66.1 percent in 2014 so far.
Shares of Adobe Systems Inc rose 6.2 percent to
$71.74 in after-hours trading after the software company
reported its second-quarter results and gave a strong outlook.
The Fed began its two-day policy meeting at 10 a.m. (1400
GMT) as scheduled and is widely expected to conclude with
another $10 billion cut of its monthly bond purchases. Investors
are also focused on whether officials will tip their hand on
longer-term plans for interest rates.
In other economic data released on Tuesday, housing starts
and building permits fell more than expected in May.
About 60 percent of stocks traded on the New York Stock
Exchange closed higher for the day, while about 65 percent of
Nasdaq-listed names ended in positive territory.
(Editing by Jan Paschal)