11:40AM New York – U.S. stocks surged after the release of benign inflation data and rebound in investor’s confidence.

U.S. stocks opened higher after a smaller than expected rise in inflation index. The government data suggested that April inflation, seasonally adjusted rose at a slower pace than estimated despite a sharp rise in energy and food costs.

Deere & Company fell $7.82 to $82.42 after it reported second quarter earnings per share of $1.74 or 22% increase to $763.5 million from a year ago. Macy’s added $1.35 to $25.41 after it reported earnings

CPI increases at a slower pace

On a seasonally adjusted basis Consumer Price Index rose 0.2% in April following a rise of 0.3% in March according to the data released by the U.S. Department of Labor. The CPI rose 0.6% in April, without adjusting for seasonality and was 3.9% higher than in April 2007.

During the first four months of 2008, the CPI measure rose at 3% compared to 4.1% in the same period a year ago.

The index of energy costs in the first four months rose at 6.3% compared to 17.4% rise in the period in 2007. Gasoline prices rose 5.6% in April and jumped 21% from a year ago.

Earnings in review

Deere & Company, the world''s largest maker of tractors and combines reported second quarter revenues rose 18% to $8.1 billion from $6.8 billion a year ago. Net income in the quarter rose 22% to $763.5 million or $1.74 per diluted share compared to net income of $623.6 million or $1.36 per share, a year ago.

Deere & Company stock (DE: chart) fell $7.51 to $82.68.

Applied Materials, Inc semiconductor equipment maker said second quarter revenues slipped 15% to $2.15 billion from $2.53 billion a year ago. Net income in the quarter falls 36% to $302.5 million or 22 cents per diluted share compared to net income of $411.4 million or 29 cents per share, a year ago.

Applied Materials, Inc stock (AMAT: chart) fell 22 cents to $19.63.

Electronic Arts Inc publisher of interactive software games said fourth quarter revenues jumped 84% to $1.13 billion from $613 million a year ago. Net loss in the quarter was $94 million or 30 cents per diluted share compared to net loss of $25 million or 8 cents per share, a year ago. For the year the publisher reported net loss of $454 million compared to net income of $76 million or a loss per share of $1.45 compared to 24 cent per share income. Revenue in the fiscal year ended in March 2008 was $3.66 billion, up 19% from a year ago.

Electronic Arts stock (ERTS: chart) fell $1.45 to $53.15.

Whole Foods Market, Inc, operator of expensive organic supermarket stores reported second quarter revenues rose 28% to $1.9 billion from $1.5 billion a year ago. Net income in the quarter dropped 13% to $40 million or 29 cents per diluted share compared to net income of $46 million or 32 cents per share, a year ago.

Whole Foods Market, Inc stock (WFMI: chart) dropped $4.26 to $29.38.

TAM S.A., Brazil based airline reported first quarter revenue increased to R$1.32 billion compared to R$1.09 billion for the same quarter of 2007.

Gross revenue climbed 22.7% to R$2.35 billion from R$1.92 billion for the quarter of 2007. Block hours/day per aircraft decreased from 13 hours to 12.6 hours. The number of passengers transported increased to 7.6 million.

TAM stock (TAM: chart) 14 cents to $22.19.