Dow Drops on Inflation Numbers
Stocks slipped on Thursday after a new inflation report showed that wholesale costs rose more than expected last month.
The Dow Jones Industrial Average lost 72.17 points to 44,850.10.
The S&P 500 index faded 4.07 points to 6,462.51.
The NASDAQ dropped 7.02 points to 21,706.12.
In premarket trading Thursday, shares of Cisco fell 1% on the heels of the major tech company’s fourth-quarter results narrowly beating expectations. Deere shares lost more than 7% on mixed full-year guidance.
Investors came into the session riding high, with the S&P 500 and NASDAQ posting fresh record highs in the previous session. The benchmarks got a jolt earlier this week after the release of a cooler-than-expected consumer price inflation report for July.
That report stoked hopes among investors for a rate cut from the Federal Reserve at the end of its September policy meeting.
However, investors were left feeling disappointed after July’s producer price index reading indicated that such a rate cut is far from guaranteed.
Wholesale prices rose 0.9% on the month, much more than the 0.2% economists polled by Dow Jones were expecting. The index had come in flat in June. Wholesale prices can be a leading indicator for consumer prices.
Some traders were looking past this PPI number because the report showed the increase was driven by a large gain in “portfolio management,” along with airfare. Without those factors the figures would have been much closer to estimates.
Prices for 10-year Treasury lost ground Thursday, raising yields to 4.27% from Wednesday’s 4.24%. Treasury prices and yields move in opposite directions.
Oil prices hiked 88 cents to $63.53 U.S. a barrel.
Gold prices collapsed $25.20 to $3,382.40 U.S. an ounce.
