Stocks held onto early week gains after stumbling into the weekend in the wake of the Federal Reserve’s move to increase the discount rate 25 basis points to 0.75%. Markets rallied despite mixed earnings reports thanks to several encouraging economic reports.

The Dow climbed 303.21 points, or 3.0%, to close at 10,402.35. The S&P rose 33.66 points, or 3.1%, ending at 1,109.17. The NASDAQ gained 60.34 points, or 2.8%, to close at 2,243.87.

On the housing front, construction of new homes surged 2.8% in January to a seasonally adjusted rate of 591K units. The recent reading was well ahead of the 580K economists were anticipating and the highest level reached in the past six months. Still, applications for building permits slipped 4.9% during the month to a rate of 621K. Permits, which are considered a good indicator of future activity, posted its first decline in the past three months.

The nation’s industrial production advanced in January, climbing 0.9%, marking the seventh straight month of expansion. There was growing progress in the country’s manufacturing, mining and energy utilities, marking the first time since August 2009 that all three major categories posted gains.

During the month, manufacturing increased by 1%, while mining and utilities each gained 0.7%. January’s results were a welcome sign after mining activity fell 0.2% and manufacturing slipped 0.1% in December. The nation’s industries were operating at 72.6% of capacity in January, a 0.7% increase from December.

The Labor Department released a report last week showing that import prices jumped 1.4% in January, much higher than the revised 0.2% gain recorded in December. On a year-over-year basis, import prices have surged 11.5%.

The advance in import prices was a direct result of imported fuel, which saw prices jump 5.3% following a 0.6% decrease in December. Import fuel prices were greatly affected by a 4.8% increase in petroleum prices and an 18.8% gain in natural gas prices.

The report showed that export prices increased for the third consecutive month as prices rose by 0.8% in January. That followed a 0.6% increase the month before. The increase in export prices was due in large part to a 1.4% jump in agriculture prices. Compared to this time last year, export prices have increased by 3.4%.

Wholesale prices more than doubled in January, igniting worries about price increases. For the month, the Producer Price Index jumped 1.4%, doubling the 0.7% gain economists had predicted. The gains in prices were lead by a surge in costs for gasoline and other energy goods.

Excluding food and energy costs, the core inflation rate at the wholesale level advanced by 0.3%, tripling the 0.1% gain economists were projecting. Throughout the past year, wholesale prices were up 4.6%, while core prices were up a more modest 1%.

Yet inflationary fears eased after the CPI report. Consumer prices advanced at a slower-than-anticipated rate in January as the CPI rose 0.2%, while core inflation, those prices excluding food and energy costs, decreased by a modest 0.1%. It was the first time in more than 25 years that core prices dropped.

The 0.2% gain in overall prices was a direct result of a 2.8% jump in energy costs, lead by a 4.4% jump in gasoline prices and a 3.5% increase in natural gas charges. The nearly 3% surge in energy prices was the highest since last August.

With Greece’s debt problems at the forefront of market activity over the past few weeks, the U.S. debt load has come under increasing scrutiny. After the first four months of the fiscal year, the nation’s annual budget is currently running at an elevated rate. In January, the deficit totaled $42.6B, which pushed the budget into the red at $430.7B, 8.8% higher compared to the same period a year ago. President Obama announced during the week that this year’s deficit would hit $1.56 trillion and would most likely remain above the $1 trillion mark for the next three years.

The labor market remains a major source of concern for the U.S. Weekly data showed that the number of newly unemployed workers for the week ending February 13 advanced unexpectedly, increasing by 31K claims to a seasonally adjusted rate of 473K.

A forecast of future economic activity advanced for a 10th consecutive month in January as the index of leading economic indicators climbed 0.3%. The current reading comes in much weaker than the 1.2% rise in December and well short of the 0.5% gain that economists had expected. With the continued recovery within the nation’s manufacturing industry and a surge in the stock market, the index has steadily increased for nearly a year.

Data due up this week includes New Home Sales, Existing Home Sales, and the Durable Orders reports for January. Also, the second estimate readings for GDP for the fourth quarter, the Case-Shiller 20-city Index and the FHFA Housing Price Index for December is due out, along with Consumer Confidence, the Chicago PMI and the final reading for the Michigan Consumer Sentiment report for February. Weekly results for Initial Claims and Crude Inventories are scheduled as always.