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* CPI and core CPI rises less-than-expected in September
* Indexes dip: Dow 0.11 pct, S&P 0.27 pct, Nasdaq 0.05 pct
* Treasury yields extend drop after CPI data
* Tech and FAANG stocks lead market gainers
* Walgreens and Delta climb after quarterly results (Updates to open)
By Shreyashi Sanyal
Oct 11 (Reuters) - U.S. stocks steadied slightly after their worst day in eight months on Thursday as a smaller-than-expected rise in consumer prices suggested inflationary pressures were easing, weakening the case for an aggressive campaign of further interest rate rises.
The Consumer Price Index (CPI) increased 0.1 percent last month, Labor Department data showed, as did core CPI, which excludes volatile food and energy components. Both were below economists' forecasts of a 0.2 percent climb. main U.S. stock indexes were still slightly lower after opening, but U.S. Treasury yields, whose rise above 3 percent has been a key factor weakening demand for U.S. stocks, retreated further after the numbers.
"At least for right now, inflation fears seem to be taking a pause. There is a tendency in the markets to overact in both-ways in the short-term which is what we saw last week," aid Art Hogan, chief market strategist at B. Riley FBR in New York.
Five of the 11 major S&P sectors rose, with some of the biggest losers from Wednesday's slump leading the gainers.
The two sectors house four of the five high-growth FAANG stocks. Facebook FB.O , Apple AAPL.O , Netflix NFLX.O and Alphabet GOOGL.O were up between 1 percent and 1.9 percent. Amazon AMZN.O , part of consumer discretionary, was down 0.6 percent.
At 10:20 a.m. ET the Dow Jones Industrial Average .DJI was down 28.70 points, or 0.11 percent, at 25,570.04, the S&P 500 .SPX was down 7.61 points, or 0.27 percent, at 2,778.07 and the Nasdaq Composite .IXIC was down 3.93 points, or 0.05 percent, at 7,418.12.
Walgreens WBA.O was up 0.4 percent, reversing premarket losses, after the drugstore chain's profit soared 88.5 percent as more people brought prescription medicines and it benefited from its acquisition of Rite Aid stores. Air Lines DAL.N rose 4.6 percent after reporting a third-quarter profit that beat estimates as strong demand for air travel and tight control over costs helped the airline battle rising fuel expenses. issues outnumbered advancers for a 1.57-to-1 ratio on the NYSE and a 1.08-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 36 new lows, while the Nasdaq recorded 5 new highs and 154 new lows.
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