Stocks Inch Their Way Up

(Click below to hear my entire interview with Strauss, including his takeaways from earnings and economic data, and why he expects improvement in the second half of the year.)

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Stocks initially advanced after the early earnings reports but slunk back after the latest economic data.

The producer price index, the cost of goods at the wholesale level, jumped 1.8% in June, marking the largest increase since November 2007 and well above the consensus estimate of 0.2% growth. Core PPI rose 0.5%, vs. the consensus expectation of a 0.1% decline.

Meanwhile, the Department of Commerce said retail sales rose by a slightly higher than expected 0.6%, and business inventories fell 1%, also slightly more than expected.

Late Monday, Novellus Systems (NVLS Quote) posted a wider-than-expected second-quarter loss on weakened demand, but also forecast a sharply improved third quarter. CSX(CSX Quote) also suffered from the weak economy, reporting a 20% decline in second-quarter profit, but the railroad company managed to top Wall Street expectations.

Novellus rose 1.3% to $18.90, while CSX surged 7% higher to $34.80.

In other news, Bloomberg reported that the U.S. Justice Department is investigating the market for credit-default swaps, citing Markit Group, the London-based data provider that is majority-owned by Wall Street's largest banks.

Also, the Financial Times reported that Goldman Sachs executives sold almost $700 million worth of stock following the collapse of Lehman Brothers last September.

Elsewhere, crude oil futures closed flat at $59.69 a barrel after gaining more than $1 earlier in the day. Gold rose 30 cents to $922.80 an ounce.