NEW YORK (CNNMoney.com) -- Strong news on the earnings front, including reports from Procter & Gamble and Time Warner, could boost stocks Wednesday, ending a two-day losing streak.
At 7:45 a.m. ET, Nasdaq and S&P futures were higher, indicating a positive start for the major indexes.
AP Stock Prices Fall on Inflation Fears Tuesday August 1, 10:21 am ET By Michael J. Martinez, AP Business Writer
Stock Prices Fall on Inflation Fears; Dow Industrials Drop 75 in Early Trading
NEW YORK (AP) -- Heightened fears of inflation prompted investors to sell off stocks Tuesday as a key price index climbed to an 11-year high and an improving manufacturing sector raised the likelihood of another interest rate hike by the Federal Reserve. In midmorning trading, the Dow Jones industrial average fell 75.48, or 0.67 percent, to 11,110.20.
Broader stock indicators also fell. The Standard & Poor's 500 index lost 10,43, or 0.82 percent, to 1,266.23, and the Nasdaq composite index dropped 30.65, or 1.47 percent, to 2,060.82.
While inflation-adjusted consumer spending rose a sluggish 0.2 percent in June, the Commerce Department also reported that consumer prices are up 2.4 percent year over year, the highest rate of inflation since April 1995.
A strong rise in the Institute for Supply Management's manufacturing index deepened investors' interest rate worries, as a strong economy would make it easier for the Fed to raise rates without cutting off growth. The index rose to 54.7 in July, far better than the 53 reading economists had expected.
The Fed meets next Tuesday to gauge whether more interest rate hikes are needed to clamp down on inflation. The Commerce and ISM reports could push policy makers toward another quarter percentage point increase, which would put the benchmark rate at 5.5 percent. That would make capital more expensive for corporations -- and hurt corporate earnings and share prices.
Bonds slumped alongside stocks, with the yield on the benchmark 10-year Treasury note rising to 5.01 percent from 4.98 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.
Rising crude oil and natural gas futures added to Wall Street's worries, since the Fed has signaled that high energy prices could further feed inflation. Crude prices rose 40 cents to $74.80 per barrel due to multiple crises in the Middle East, while natural gas futures built on Monday's 14 percent surge based on higher U.S. electrical demand in a nationwide heat wave.
Rising oil prices, concerns about rate hikes, among the factors making investors cautious.
By Alexandra Twin, CNNMoney.com senior writer
July 31 2006: 6:27 PM EDT
NEW
YORK (CNNMoney.com) -- Stocks edged lower Monday after last week's big
rally on worries about a fresh rise in oil prices and about how much
longer the Federal Reserve will keep raising interest rates.
The Dow Jones industrial average (down 34.02 to 11,185.68, Charts) lost about 0.3 percent .The broader Standard & Poor's 500 (down 1.89 to 1,276.66, Charts) index and the tech-heavy Nasdaq composite (down 2.67 to 2,091.47, Charts) both lost around 0.1 percent.
Comments from a pair of Fed officials called into question when the
Fed's rate-hiking campaign might end. Meanwhile, escalating Mideast
tension added to the latest run-up in oil prices.
Treasury prices
crept higher, pushing the yield on the 10-year note further below 5
percent, while the dollar slipped versus other major currencies.
Tuesday trade is likely to be influenced by the heavy spate of economic news due in the morning.
In
particular, investors will be attuned to the June personal income and
spending report, due at around 8:30 p.m. ET, and the report's core PCE
deflator - a key measure the Federal Reserve is known to monitor for
signs of inflation.
A read on construction spending is due around
10 a.m. ET. At the same time, the Institute for Supply Management
releases its manufacturing index.
Stocks
surged Friday after a weaker-than-expected read on gross domestic
product growth in the second quarter sparked hopes that the Federal
Reserve's interest-rate-hiking campaign is nearly done.
The gains helped give the Dow industrials its best week since May 2005.
After that run, stocks were a little vulnerable Monday, particularly amid comments from two Fed officials that suggested an end to interest-rate hikes may not happen as soon as had been hoped. Rising oil prices amid ongoing tension in the Mideast added to the pressure.
Major gauges retreat in early going as investors step back after last week's stellar run up.
July 31 2006: 9:51 AM EDT
NEW
YORK (CNNMoney.com) -- Stocks declined Monday morning, as investors
took a step back after the best week on Wall Street in more than a year.
The Dow Jones industrial average (down 30.50 to 11,189.20, Charts) lost around 0.3 percent in the early going, while the broader Standard & Poor's 500 (down 2.76 to 1,275.79, Charts) index fell 0.3 percent. The tech-heavy Nasdaq composite (down 8.59 to 2,085.55, Charts) lost around 0.5 percent.
Dow & Nasdaq opened RED now .... Lets see what happen in half hour time when:
"At 10 a.m. Eastern, the market will view the Chicago purchasing managers report for this month. The MarketWatch forecast, based on a poll of economists, is for a reading of 55.7%, which would be down from 56.5% in June."
Next week is full of activities with below's scheduled reporting .... Think a rally could happen if the reports are 'positive' (or negative) - with the Fed meeting 2 weeks later on 8th Aug? Buckle up, guys! (Btw, when does summer vacation ends in US? Trading volume is low now)
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