U.S. equities finished mixed and near their lowest levels, losing steam in the final moments of trading, as uncertainty set in ahead of more inflation data to be released tomorrow. A revival in technology issues was hampered by some pressure among energy stocks, with crude oil prices adding to yesterday’s drop. Treasuries and the U.S. dollar were higher following a cooler-than-expected wholesale price inflation report and a surprising decline in jobless claims. On the equity front, a slowdown in digital sales at Costco overshadowed its July same-store sales growth, while Rite Aid and Albertsons ditched their merger, as did Tribune Media and Sinclair Broadcast Group, and Yelp rallied on its Q2 earnings report. Gold finished lower.
The Dow Jones Industrial Average (DJIA) fell 75 points (0.3%) to 25,509, the S&P 500 Index dipped 4 points (0.1%) to 2,854, and the NASDAQ Composite ticked 3 points higher to 7,892. In moderate volume, 650 million shares were traded on the NYSE and 2.0 billion shares changed hands on the NASDAQ. WTI crude oil fell $0.13 to $66.81 per barrel and wholesale gasoline decreased $0.02 to $2.00 per gallon. Elsewhere, the Bloomberg gold spot price lost $1.88 to $1,212.00 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.5% higher at 95.55.
The Producer Price Index (PPI) showed prices at the wholesale level in July were flat month-over-month (m/m), below the Bloomberg expectation of a 0.2% increase, and versus June’s unrevised 0.3% gain. The core rate, which excludes food and energy, ticked 0.1% higher, compared to forecasts of a 0.2% increase, and versus June’s unrevised 0.3% rise. Y/Y, the headline rate was 3.3% higher, versus projections to match June’s unrevised 3.4% gain. The core PPI rose 2.7% y/y last month, south of estimates to match June’s unrevised 2.8% increase.
The inflation data appears to be keeping concerns about accelerated Fed rate hikes under control, but tomorrow’s release of the Consumer Price Index (CPI) will likely garner more scrutiny as the markets get a glimpse at pricing pressures facing the all-important U.S. consumer. The CPI is projected to rise 0.2% m/m for last month, after June’s 0.1% rise, while the core rate is forecasted to match June’s 0.2% gain. Y/Y, the CPI and core readings are both expected to match June’s 2.9% and 2.3% rates, respectively.
Treasuries were higher following the inflation data, as the yield on the 2-year note declined 3 basis points (bps) to 2.64%, and the yields on the 10-year note and 30-year bond fell 5 bps to 2.92% and 3.07%, respectively.
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