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.

In the health care arena, the Chairman of the Senate Finance Committee unveiled a summary of his long-awaited health care plan. Sen. Max Baucus’ plan would cost $865 billion over 10 years and mandate insurance coverage for all Americans, report David M. Herszenhorn and Robert Pear for The New York Times.  One major change is that the measure drops the public health insurance option favored by President Barack Obama and instead calls for non-profit health-care cooperatives.  The plan aims to make it easier for small groups and individuals to have health care coverage.  The news sent the Healthcare Select SPDR (NYSEArca: XLV) up about 0.5% in morning trading.

Overall, all three major U.S. indexes were up in morning trading.  The Dow Jones Industrial Average added 0.8%, while both the S&P 500 and Nasdaq added 1.1% each.

For more stories on health care, visit our health care category.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.