Russell higher as upbeat earnings reaction offsets CPI

Small-cap stocks staged a modest rally shortly after the open, underpinned by decent earnings news that helped counter rising inflation data. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was up 5.87, or 0.89%, at 668.22.

Federal Reserve Chairman Ben Bernanke moved his testimony on the economy over to the House today and his pre-Q&A text was the same as Tuesday’s Senate version. The market remained in the green as the hearings began, but could see some volatility from the Q&A later.

News on the inflation front remained troubling as the headline figure for CPI came in at plus 1.1%, which was the largest monthly advance in 26 years. What’s more, the year-over-year increase was at a whopping 5%, which is the largest rise in consumer prices since 1991. The headline CPI figure was forecast at 1.1%, so this figure was every bit as bad as Tuesday’s PPI report. However, the market was able to shrug off the PPI report, and investors appear to be more focused on earnings news and individual company stories at this stage. Offsetting the bad inflation report a tad was the industrial production report, which came in at 0.5%, well above the forecast of 0.0%.

Crude oil prices were lower early on this morning, providing some relief to the market on a day when American Airlines (NYSE:AMR) and Delta Air (NYSE:DAL) reported massive quarterly losses spurred by soaring jet fuel costs. However, huge losses in the air carrier business aren’t exactly fresh news, and both AMR and DAL were solidly higher, while the AMEX Airline Index was up about 6% shortly after the opening.

The biggest single influence on stocks early this morning was clearly Well Fargo & Co. (NYSE:WFC), which posted quarterly results and announced a 10% increase in dividends that sparked a 10-handle turnaround in S&P 500 stock index futures ahead of the regular opening. WFC shares were up 15% after the open, and . . .

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