NEW YORK (AP) _ Stocks opened sharply higher today, drawing strength from a consumer price report that calmed investor fears about inflation.

At 10 a.m. on Wall Street, the Dow Jones industrial average was up 134.24 at 10,729.23.

Broader stock indicators also higher. The Standard & Poor's 500 index was up 21.87 at 1,323.03, and the Nasdaq composite index was up 62.43 at 2,477.10.

The Labor Department reported that May consumer prices excluding the volatile energy and food categories rose a modest 0.1 percent. Clothing and auto prices declined, and medical and housing costs edged up.

The markets had been anxiously awaiting today's report, which is seen as a gauge of inflation in the prospering economy, after a surge in April's Consumer Price Index helped prompt the Federal Reserve to warn it would might boost interest rates. The Fed's policy-setting Open Market Committee next meets June 29-30.

Today's report helped alleviate some of the markets' concerns.

So far this year, the annual rate of inflation felt by consumers is 2.6 percent, compared to a 1.6 percent rise for all of 1998, the smallest in a dozen years.

Advancing issues outnumbered declining by a 8-to-3 margin on the New York Stock Exchange, where volume came to 116.34 million shares.

The NYSE composite index was up 7.92 at 630.20, and the American Stock Exchange composite index was 3.12 at 767.04.

Overseas, Japan's Nikkei stock average fell .32 percent. In afternoon trading, Germany's DAX index was up 1.40 percent, Britain's FT-SE 100 was up .33 percent, and France's CAC-40 was up 1.05 percent.