Dow adds 130
but can it hold?

NEW YORK » Wall Street posted big gains for the third straight day yesterday as a benign reading of consumer inflation relieved investors. The Dow Jones industrial average jumped more than 130 points, giving the indicator a gain of more than 300 points so far this week.

Investors were also encouraged by a decline of nearly $2 a barrel in oil prices, which alleviated another source of persistent concern, and Dow component Hewlett-Packard Co. turned in a solid earnings report.

Despite the pronounced upturn, however, it was not clear that the market had completely shaken off the lingering worries about inflation and rising interest rates that have dogged it over the past several weeks.

Investors focused on the consumer price index data released early yesterday, particularly after a report on Tuesday showed an unexpected spike in prices at the wholesale level, which had put a damper on stocks early in Tuesday's trading.

Todd Leone, head of listed trading at SG Cowen & Co., said that while investor sentiment has been positive over the past few days, especially with falling oil prices and a favorable reading on consumer inflation, "people are cautious."

"It's been a very tough market," Leone said. "It seems like we've done this before -- it's rallied and then sold off again. I'd like to see a sustained rally before we get too excited, say getting to 11,000. And I don't see that happening until the Fed stops raising rates."

The Dow rose 132.57, or 1.28 percent, to close at 10,464.45 after rising more than 191 points over the previous two days.

Broader stock indicators also advanced. The Standard & Poor's 500 index closed up 11.76, or 1.00 percent, at 1,185.56 and the Nasdaq composite index rose 26.50 or 1.32 percent, to 2,030.65.

It was the highest level for the Dow and the S&P 500 since April 12, and the highest level for the Nasdaq since March 15. The last time all three indexes posted three consecutive days of gains was Feb. 23-25.

The Labor Department reported before the market opened that the consumer price index, the most closely watched barometer of inflation, rose 0.5 percent in April, led by higher energy and food prices.

But without the swings in those two volatile price categories, inflation in what's known as core prices was flat in April, a major improvement from March, when that measure shot up by 0.4 percent, its largest gain in more than two years.