U.S. Stocks May Come Under Pressure On Renewed Inflation Worries

Renewed inflation concerns may weigh on Wall Street in early trading on Thursday following the release of a report showing a bigger than expected increase in producer prices.

The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.8 percent.

The futures came under pressure after the Labor Department said its producer price index for final demand climbed by 0.7 percent in January after edging down by a revised 0.2 percent in December.

Economists had expected producer prices to increase by 0.4 percent compared to the 0.5 percent drop originally reported for the previous month.

Meanwhile, report said the annual rate of producer price growth slowed to 6.0 percent in January from 6.5 percent in December. The year-over-year growth was expected to slow to 5.4 percent.

Following the consumer price inflation and retail sales data released earlier this week, the report may add to worries about the outlook for interest rates.

Traders have recently expressed concerns the Federal Reserve will raise rates higher than currently anticipated in an effort to combat inflation.

A separate Labor Department report showed first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended February 11th.

The report said initial jobless claims slipped to 194,000, a decrease of 1,000 from the previous week’s revised level of 195,000.

Economists had expected jobless claims to inch up to 200,000 from the 196,000 originally reported for the previous week.

The Commerce Department also released a report showing new residential construction in the U.S. tumbled by much more than expected in the month of January.

After an initial move to the downside, stocks regained ground over the course of the trading session on Wednesday. The major averages climbed well off their worst levels of the day and eventually closed in positive territory.

The major averages all finished the day higher, with the tech-heavy Nasdaq leading the advance. While the Nasdaq jumped 110.45 points or 0.9 percent to 12,070.59, the S&P 500 rose 11.47 points or 0.3 percent to 4,147.60 and the Dow inched up 38.78 points or 0.1 percent to 34,128.05.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index is up by 0.8 percent, the German DAX Index is up by 0.2 percent and the U.K.’s FTSE 100 Index is up by 0.1 percent.

In commodities trading, crude oil futures are edging down $0.05 to $78.54 a barrel after falling $0.47 to $78.59 a barrel on Wednesday. Meanwhile, after tumbling $20.10 to $1,845.30 an ounce in the previous session, gold futures are inching up $1.70 to $1,847 an ounce.

On the currency front, the U.S. dollar is trading at 134.26 yen versus the 134.16 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0670 compared to yesterday’s $1.0689.

Source: Read Full Article