Stocks Pull Back Following Inflation Data
Mike Taylor
08/14/08 - 08:59 AM EDT
Updated from 7:43 a.m. EDT
Premarket futures were indicating a lower open for U.S. stocks Thursday as the release of demoralizing inflation numbers outstripped a positive earnings statement from retail colossus
Wal-Mart (WMT Quote).
Futures for the
S&P 500 were down 4 points at 1281 and were 5.5 points below fair value.
Nasdaq futures were lower by 6.5 points at 1935 and were 10 points short of fair value.
On Wednesday, the major indices spent nearly all day in negative territory, pounded by somewhat discouraging retail sales data and an uptick in crude-oil prices.
Ahead of the new session, several economic data releases served to dampen investor enthusiasm. The Bureau of Labor Statistics' July consumer price index showed a 0.8% increase, down from 1.1% in June but much higher than economists' expectations for a 0.4% bump in prices. Year over year, prices rose 5.6%, the largest such increase since January 1991. The core inflation rate came in at 0.2%, less than 0.3% in June and in line with consensus estimates.
Offering further selling pressure, the Department of Labor's initial jobless claims for the week ended August 9 came it at 450,000, a higher unemployment reading than forecast by analysts. The figure for the previous week was revised upward to 460,000 from 455,000.
Before the data release, traders had shown optimism on Wal-Mart's report of second-quarter earnings that beat estimates and raised its full-year profit outlook.
Meanwhile,
InBev the Belgian brewer slated to buy
Anheuser-Busch (BUD Quote), reported improved earnings and said it expected to increase its profit margins for the remainder of the year.
Garment vendor
Urban Outfitters (URBN Quote) also announced growth in second-quarter profits and said same-store sales were swinging upward.
As for commodities, the price of crude oil was rising 4 cents to $116.04 a barrel, and gold was adding $3.10 to $834.60 an ounce.
U.S. Treasury securities were falling. The 10-year note was losing 6/32 to yield 3.95%, and the 30-year was tacking on 8/32, yielding 4.57%. The dollar was adding value against the euro, but falling vs. the yen and pound.
Across the seas, foreign markets were mostly gaining ground. London's FTSE, Frankfurt's DAX and Hong Kong's Hang Seng were all strengthening, while the Nikkei in Japan was ticking down.
