Bulls like signals on growth, inflation

NEW YORK (CNNMoney.com) -- Stocks rallied Friday, with the Dow jumping nearly 100 points in early trading, after a series of reports signaled tame inflation and moderate economic growth, not too cold and not too hot.

The 30-share Dow industrials (up 86.90 to 13,509.18, Charts) jumped roughly 0.6 percent about an hour into the session after climbing about 100 points earlier while the broader S&P 500 (Charts) and the tech-heavy Nasdaq (Charts) gained also climbed about 0.6 percent apiece.

A government report on consumer spending showed a key inflation reading rose just 0.1 percent in May, meeting forecasts of economists surveyed by Briefing.com. That left the so-called core PCE, which measures consumer inflation excluding volatile food and energy prices, up 1.9 percent from a year earlier, just within the Fed's presumed comfort range of 1 to 2 percent.

In the report, personal spending and income both rose modestly last month, just below analysts' forecasts.

Separate reports showed construction spending jumped 0.9 percent last month, topping forecasts, while the revised University of Michigan consumer sentiment index for June also topped forecasts, though the reading was down from May.

The positive economic news kept investors' minds off the trouble in London. A stretch of road near Buckingham Palace in London was closed due to a suspicious vehicle hours after a bomb was found in a car parked in a nearby entertainment district, police said. London shares fell on the news, although the French and German exchanges remained higher.

U.S. stocks bounced around Thursday and finished little changed after the Federal Reserve left interest rates unchanged, as expected.

Bond prices rallied on Friday's tame inflation number, sending the yield on the benchmark 10-year Treasury note falling to 5.06 percent from 5.10 percent late Thursday. Bond prices and yields move in opposite direction.

Markets in Asia mostly advanced. The dollar was lower against the euro but higher versus the yen.

In corporate news, Apple (Charts, Fortune 500) is set to debut its iPhone in what is arguably the most hyped product launch in U.S. history. The iPhone, which can make calls, play music and browse the Internet, is due to go on sale nationwide at 6 p.m. local time. Shares of Apple rose about 1 percent in early trading Friday.

Research in Motion (Charts), which makes the popular BlackBerry device, reported a higher first-quarter profit that topped forecasts as it added more subscribers than expected and raised its earnings guidance. It also announced a three-for-one stock split, and its shares soared about 17 percent.

Palm (Charts) shares fell about 3 percent after it posted lower quarterly profit and weaker-than-expected revenue, even as it reported record sales of its Treo smart phones.