Updated from 10:07 a.m. EDT
Stocks in the U.S. were deepening their losses Tuesday as traders dealt with a slew of bad tidings, including warmer-than-expected inflationary data, negative news on the corporate side and another record for oil prices.
Dow Jones Industrial Average
tanked 167 points, or 1.3%, to 12,861, and the
was down 10 points, or 0.7%, to 1417. The
was off 23 points, or 0.9%, at 2493.
Before the opening bell, the Labor Department said that prices of goods at the wholesale level, excluding the volatile effects of energy and food, rose 0.4% in April from the prior month. That's double the 0.2% increase that economists were expecting, and also twice the price pickup of the prior month. The core index was up 3% in April from the year before, the biggest gain since December 1991 and topping the 2.8% high set in July 2005.
Still, wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics, "Over time, core finished goods prices follow core raw materials, where the
year-over-year rate of increase, 24.6%, sounds alarming but is consistent with 2%
year-over-year core finished goods a year from now. Not much to worry about."
The overall producer price index registered a 0.2% price rise from the prior month, half the consensus estimate and down sharply from March's 1.1% jump.
Tony Crescenzi, chief bond market strategist with Miller Tabak and contributor to
, a sister site to
, said, "The only solace in these horrendous figures is the fact that the financial markets have already largely digested the idea that producer prices are rising rapidly, a fact that can't be missed when watching commodities prices on a day-to-day basis."
At the same time, June's crude-oil contract, which is due to expire today, shot up to a new all-time high of $129.58 a barrel. Recently, futures were soaring $2.34 to $129.39. Gold futures were up $11.30 to $917.10 an ounce.
The currency markets were another early drag, with the dollar tumbling by 1% against both the euro and the British pound while losing 0.7% to the yen at 103.60. The dollar index, which stacks the greenback against a basket of its major counterparts, was off 0.8%.
An analyst note from Brown Brothers Harriman identified one of the main culprits in Germany's Centre for Economic Research, which suggested that the European Central Bank might bring up interest rates in the near term. That would further compound the dollar's slide against the euro, and the statement also runs contrary to the ECB's own recent remarks suggesting it has shifted to a neutral stance.
On the corporate side,
was one of the day's worst-performing Dow components after saying its
plunged by two-thirds to $356 million, or 21 cents a share, as the home-improvement goods retailer continued to suffer from housing-sector woes. Excluding a one-time charge related to store closings and paring back of store-growth plans, earnings came to a better-than-expected 41 cents a share. Nonetheless, shares slumped 5.8%.
Also, last night Standard & Poor's cut
risk-to-the-government ranking, though the ratings agency upheld Fannie's ratings for senior unsecured debt, subordinated debt, and preferred stock. Shares were down 3.2%.
Back in earnings,
beat Thomson Reuters's analyst estimates for 71 cents a share by 3 cents, though same-store sales dipped 0.7% and overall revenue
despite booking a rise from a year earlier. Shares were down 0.9% to $54.43.
said its bottom line swelled by two-thirds from last year, but that missed Street expectations, and the fashion retailer's shares surrendered 6.7%.
Having a better day was office-supplies retailer
, meanwhile, said its profit picked up a bit to $212 million in its most recent quarter as the company benefited from its international exposure.
That came a day after Staples went hostile with its bid for Dutch-based
, bringing a takeout offer of $2.34 billion (1.5 billion euros) straight to the company's shareholders with its claim that Corporate was unwilling to negotiate a transaction. Staples shares rose 0.8%.
Among those set to release earnings after the market closes is Dow component
Treasury prices were on the rise. The 10-year note added 6/32 in price to yield 3.81%, and the 30-year bond was up 8/32 in price, yielding 4.56%..
Overseas markets were mostly losing ground. Tokyo's Nikkei 225 shed 0.8% overnight, and the Hang Seng Index in Hong Kong sank 2.2%. In Europe, London's FTSE 100 was plummeting 2.4%, and Germany's Xetra Dax gave up 1.6%. The Paris Cac was falling 1.7%.