U.S. stocks and exchange traded funds (ETFs) gained ground this morning on upbeat economic news, which included promising news about industrial production.

The Federal Reserve announced that industrial activity rose 0.8% in August, beating the 0.6% forecast by economists.  The Fed also revised July’s numbers to a rise of 1%, twice as much as previously reported.  The news sent the PowerShares Dynamic Basic Materials ETF (NYSEArca: PYZ) up 0.8% in morning trading.

The Labor Department reported that consumer prices rose in August. In fact, the “core” consumer price index rose by 1.4% over the 12 months ending in August.  This could be good news in that this rise means the central bank faces little pressure to raise its benchmark interest rate, a step it takes to ward off high inflation, report Christopher S. Rugaber and Jeaninne Aversa of the Associated Press.

U.S. long-term securities are not as attractive to foreign investors as they once were.  Foreigners purchased $15.3 billion more assets than they sold in July, compared to $90.7 billion more assets than sold in June.  China, however, is still highly attracted to U.S. securities, as the emerging nation increased its holdings of U.S. Treasuries from $776.4 billion in June to $800.5 billion in July.  These holdings are a direct result of the huge trade deficits the United States runs with the emerging Asian power.