After the closing bell, the earnings news was mixed. Intel (INTC) delivered an above-consensus quarter but lowered its top-line growth forecast for fiscal 2012. The stock was marginally lower in after-hours action.
The market's early weakness on Tuesday came after Fed Chairman Bernanke stayed mum on the possibility of QE3 and offered a downbeat assessment of the economy.
Some of the impact of Bernanke's comments, which were part of his semi-annual testimony to Congress on monetary policy, was mitigated by an earlier report indicating inflation remains subdued in the United States, a trend that economists said could perhaps provide a bit of a cushion for further Fed easing.The Labor Department reported before the markets open that the consumer price index was flat in June, as expected by economists polled by Thomson Reuters, after falling 0.3% in May. The core figure, excluding volatile food and energy prices, rose 0.2% in June, also as expected, and matched the prior month's rise. "Overall, the report confirmed the very favorable inflationary backdrop for monetary policy, providing some cover for the Fed if they decide to pursue further monetary easing," said Millan Mulraine, senior U.S. strategist, TD Securities. "However, with the prolonged U.S. drought likely to push food prices higher in the coming months, the inflation outlook (in isolation) is unlikely to be sufficient to justify Fed action."
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