Stocks Gain, But Caution Rules Day --- Inflation Fears Ease Yet Questions Remain On Resolve of the Fed
Investors tentatively overcame their fear of inflation and pushed stocks, bonds and the dollar modestly higher.</br></br>The Dow Jones Industrial Average rose 4.82, to 2250.36, following last week's drop of nearly 80 points on inflation worries. Bond prices rose a bit and the dollar strengthened against the mark and yen, mostly for technical reasons.</br></br>Analysts said investors approached financial markets cautiously, still uncertain about how serious the nation's inflation problem is and how resolved the Federal Reserve is to slow the economy.</br></br>"People are arguing whether the Fed is killing the market by raising rates or whether the Fed is killing the market by not raising rates enough," said Philip Roth, a market analyst at Shearson Lehman Hutton Inc.</br></br>Stock investors were particularly wary. The Dow Jones Industrial Average swung into and out of negative territory several times before rising decisively late in the afternoon, mostly on the strength of rising bond prices and a firming dollar. Activity might pick up this week as various economic reports come out. Among the most important indicators will be reports on personal income, the index of leading economic indicators and revised figures on fourth-quarter gross national product.