Import data helping US Stocks to rise (MarketWatch) (16-03-2010)

NEW YORK (MarketWatch) -- U.S. stocks opened slightly higher on Tuesday while investors await the rate decision by the Fed and after a reported drop in import prices last month calmed inflationary concerns that might cause the Fed to raise rates earlier.

The Dow Jones Industrial Average was up 8 points, or 0.1%, at 10650 in early trading. General Electric, one of the most economically-sensitive components, rose 1% to top the measure. Alcoa gained 0.7% and Wal-Mart rose 0.8%, extending its gains from Monday.

Welcoming the morning's economic data, investors were relieved to see U.S. import prices last month drop 0.3%, their first monthly drop since July 2009, reducing the specter of inflationary pressures.

With the recent strength in the dollar, "people were worried the import prices would begin to move higher and that would be another catalyst for the Fed to possibly raise rates sooner, or at least signal raising rates sooner to counter inflation, but we clearly didn't get that," said Burt White, chief investment officer at LPL Financial.

Separately, the Commerce Department said housing starts decreased 5.9% to a seasonally adjusted 575,000 annual rate compared to the prior month. Economists had expected an annual rate of 563,000.

February's decline was the biggest in four months, larger than the 4.7% drop predicted by economists, but it followed an upward revision in the previous month's data, when starts staged a 6.6% gain. January starts were originally reported up 2.8%.

Tuesday's session will be heavily focused on the Federal Open Market Committee decision due at 2:15 p.m., EDT, and on the language employed to describe the economy and outlook for interest rates. Market watchers will have an eye on whether dissent grows beyond one voter, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City.

Source: MarketWatch