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Stocks edge up in early trading on earnings reports, hope for European stimulus; Yahoo surges

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NEW YORK — Good news on corporate earnings nudged U.S. stocks mostly higher in early trading Wednesday, a day after the Standard and Poor's 500 index had its best day of the year. Investors were also encouraged by a government report showing U.S. inflation is low and by hopes for new stimulus measures from the European Central Bank.

KEEPING SCORE: The Dow Jones industrial average rose 14 points, or 0.1 percent, to 16,628 as of 10:15 a.m. Eastern time. The S&P 500 rose a point to 1,942 and the Nasdaq composite fell four points, or 0.1 percent, to 4,415.

YAHOO SURGE: Yahoo jumped $2.58, or 6 percent, to $42.77 after reporting encouraging third-quarter results late Tuesday. Yahoo got a windfall from the recent IPO of Alibaba, the giant Chinese online retailer that Yahoo owns a stake in. Revenue rose slightly from the previous year, a welcome change for a company that has been posting quarterly declines for most of the past five years.

DOW RISE: Dow Chemical rose 87 cents, or 1.8 percent, to $49.08 after the specialty chemical maker reported third-quarter earnings that beat analysts' estimates.

PHOTO: Wall Street is etched in the facade of a building in New York's Financial District, Thursday, Oct. 2, 2014. Hopes for fresh stimulus from the European Central Bank and China's steady growth bolstered Asian stocks Wednesday Oct. 22, 2014 after the S&P 500 had its best day of the year. European markets drifted lower.  (AP Photo/Richard Drew)
Wall Street is etched in the facade of a building in New York's Financial District, Thursday, Oct. 2, 2014. Hopes for fresh stimulus from the European Central Bank and China's steady growth bolstered Asian stocks Wednesday Oct. 22, 2014 after the S&P 500 had its best day of the year. European markets drifted lower. (AP Photo/Richard Drew)

LOW INFLATION: The government reported consumer prices rose 1.7 percent in the year to September, below the 2 percent target set by the Federal Reserve. The figures suggest the central bank will not come under any further pressure to raise interest rates soon. Benign inflation has allowed the Fed to keep rates at record lows to help the economy be encouraging lending and hiring.

EUROPE STIMULUS: As the region teeters on the brink of recession again, speculation is growing that the European Central Bank will step up its purchases of bonds, which puts downward pressure on interest rates. Analysts say the ECB is believed to be buying Italian bonds and might be planning to expand that program to other nations.

"Considering the weakness in Europe, the prospect of an increase (in bond purchases) is real as it looks to increase access to financing, and even more stimulus," said IG strategist Evan Lucas.

EUROPEAN STOCKS: Germany's DAX France's CAC 40 were both up 0.4 percent. Britain's FTSE 100 gained 0.2 percent.

ASIA'S DAY: Asian stocks indexes rose sharply. Japan's Nikkei 225 soared 2.6 percent. Hong Kong's Hang Seng added 1.4 percent. Australia's S&P/ASX 200 climbed 1.1 percent.

ENERGY AND BONDS: Oil prices edged higher after weeks of declines. The benchmark U.S. crude contract rose six cents to $82.54 a barrel in New York. The yield on the 10-year Treasury note rose to 2.24 percent from 2.22 percent.

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