By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Core consumer prices rise 0.3% in April
U.S. stocks struggled to push higher after a
stronger-than-expected reading of a measure of price inflation, but
the main indexes were still on track to post modest weekly
gains.
An increase in the consumer-price index along with the improving
labor market offers the Federal Reserve reserve ammunition to raise
interest rates sooner than later, even as minutes from the most
recent meeting of the Federal Open Market Committee suggested that
a June rate hike was unlikely.
Investors also are awaiting a speech from Federal Reserve
Chairwoman Janet Yellen on the economic outlook to the Greater
Providence Chamber of Commerce at 1 p.m. Eastern Time ahead of a
long holiday weekend. Read a preview
(http://www.marketwatch.com/story/why-consumers-are-so-cautious-2015-05-19).
The S&P 500 (SPX) was off about flat at 2,130.70. The Dow
Jones Industrial Average (DJI) was off by 13 points, or 0.1%, to
18,272, while the Nasdaq Composite (RIXF) was up 11 points, or
0.2%, to 5,101.89, trading above its previous record close, reached
on April 24.
As long as bond yields are moving sideways or lower, equity
investors are "happy putting money to work," said Chris Weston,
chief market strategist at IG, in a note. He added that the CBOE
Volatility index (VIX) is testing the year's lows around 12.11%,
and is now 33% below the five-year average.
"It's no coincidence then that we are back to hearing the
repetitive calls of the S&P 500 making a new all-time high,"
said Weston.
Friday could remain a quiet day for Wall Street if many traders
take off early for the Memorial Day holiday, which will see markets
closed on Monday.
In economic news, U.S. consumer prices
(http://www.marketwatch.com/story/housing-healthcare-behind-strong-rise-in-core-inflation-in-april-2015-05-22)
rose a seasonally adjusted 0.1% in April, according to the Labor
Department. Energy prices slumped 1.3% last month while food prices
were unchanged. The core CPI, which excludes volatile food and
energy costs, jumped 0.3%, driven by another increase in housing
expenses and a gain in medical care costs.
(http://www.marketwatch.com/story/why-consumers-are-so-cautious-2015-05-19)Stocks
to watch: Shares of Deere & Co.(DE) are up 3.7% after financial
results. Campbell Soup Co. (CPB) profit beat expectations
(http://www.marketwatch.com/story/campbell-soup-profit-beats-views-while-sales-slip-2015-05-22),
but sales slipped. Shares rose 2.2%.
Shares of Hewlett-Packard Co.(HPQ) rose 3.3% after earnings
squeezed past forecasts late Thursday, but the company also
provided a cautious outlook.
Marvell Technology Group Ltd. (MRVL) could see pressure. The
chip maker fell more than 2% late Thursday after saying its
financial chief will retire.
Expedia Inc.(EXPE) shares jumped 5.3% after the travel booking
company said it sold its majority stake in eLong Inc. to a group of
buyers for $671 million.
For more on notable movers read Movers & Shakers column
(http://www.marketwatch.com/story/campbell-soup-deere-foot-locker-earnings-in-focus-2015-05-21).
Other markets: European stocks were trading slightly lower,
while Asia stocks rose with the Shanghai Composite Index
(http://www.marketwatch.com/story/china-shares-hit-seven-year-high-2015-05-21)
marking its best performance since 2008.
Oil prices
(http://www.marketwatch.com/story/oil-holds-onto-recent-gains-wti-trades-above-60-a-barrel-2015-05-22)(CLN5)
slipped below $60 a barrel, falling more than 1%, while gold prices
(GCM5) gained. The dollar
(http://www.marketwatch.com/story/dollar-slips-against-yen-as-investors-await-boj-kuroda-remarks-2015-05-22)(DXY)
rose against the euro (EURUSD) and the yen (USDJPY) after the CPI
report.
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