Wall Street steamed higher Wednesday after a better-than-expected report on consumer prices tempered some of the market's concerns about inflation.

The Labor Department's report that consumer prices advanced 0.2 percent in April after rising 0.3 percent in March appeared to alleviate worries about a big spike in prices due to the recent surge in energy costs. The moderation in prices comes despite the largest jump in food prices in 18 years.

Wall Street has been concerned that higher food and energy costs are cutting into consumers' ability to spend. Any pullback is an unnerving prospect for investors because consumer spending accounts for more than two-thirds of U.S. economic activity.

Marc Pado, U.S. market strategist for Cantor Fitzgerald, said the tame consumer prices reading, along with recent figures on productivity, indicate that businesses are swallowing some of the rising costs they face and not passing all of them to consumers. That's welcome news as consumers are facing higher prices in some key areas, like energy and food.

"You have higher input costs but you're getting more out of your workers so therefore you're able to control your output costs," he said. "The economy is lean and mean and doing well even though on the demand side it's slumping."

According to preliminary calculations, the Dow rose 66.20, or 0.51 percent, to 12,898.38. A late sell-off in technology stocks caused the market to pare its gains, with the blue chip index at times up more than 150 points.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 5.62, or 0.40 percent, to 1,408.66. The Nasdaq composite index rose 1.58, or 0.06 percent, to 2,496.70.