CPI Up, so Gas Up, Fatten Up and Stock Up

If the inflationary environment in which we live is beginning to tear away at your pockets, it's due time to buy some stocks. Everything is going up, and mostly, energy. I suggest you purchase some shares of your local utility company and at least one of the big oil companies - Exxon/Mobil, Chevron, British Petroleum or Royal Dutch Shell (if you're feeling a bit foreign). An agrifood conglomerate like ADM might also make your list.

With prices rising, the companies which supply the energy and foodstuffs of our nation are passing those higher prices on and making healthy profits. Owning some shares of the right companies will keep you somewhat even with them. Somewhat...

Dow 13,639.48 +85.76; NASDAQ 2,626.71 +27.30; S&P 500 1,532.91 +9.94; NYSE Composite 10,013.93 +87.14

The Consumer Price Index rose 0.7% in May, but stripping out food and energy, the core index was up only 0.1%. Translated, that means food and motor fuel (gas) was much costlier than in April. No surprise there for anyone who drives and pays for their own gas. Motor fuels were up a nifty 10.4%, which pretty much overshadowed any increases anywhere else, though prices for meats have been rising steadily. Through the first five months of 2007, beef prices are up 5.1%, poultry, 4.3%, and pork, 3.4%. Vegans rejoice.

Stocks were also assisted by another dip in the 10-year bond yield, back to 5.171% after cresting over 5.20% earlier in the week and causing a mini-panic on Tuesday.

As weeks go, this one was stellar. The NASDAQ advanced 53 points or 2%, hitting a 6-year high on Friday. The Dow was up 215 points, or roughly 1.5% and the S&P 500 was up 26 points, about 1.7%.

On the day, advancing issues overwhelmed declining one by a 5-2 ratio, while 565 new highs subsumed the paltry 95 new lows.

Oil peaked above $69 per barrel (a 2007 high) before backing off to close up just 35 cents at $68.00.

Gold and silver were both up, but hardly anyone cares anymore.