Investing.com – Though U.S. stocks began Friday by following the
global downturn in stocks, they begin to recover territory just
before midday on Wall Street, in a session where U.S. inflation
racked up its largest rise in four-and-a-half years and oil
continued to move to the downside.
In a session with a sparse economic calendar, investors focused
on the U.S. Commerce Department's consumer price index (CPI) that
showed inflation registered its largest gain in four-and-half
The that consumer prices remained flat from a month earlier in
January, compared to expectations for decline of 0.1%.
Year-over-year, consumer prices were 1.4% higher from the same
month a year earlier, above expectations for a 1.3% increase and
after having risen 0.7% in December.
Consumer prices, excluding food and energy costs, increased by a
seasonally adjusted 0.3%, above forecasts for a gain of 0.2%. This
same measure had also risen 0.2% in December.
Core CPI increased at annualized rate of 2.2% last month,
slightly above expectations for a 2.1% rise.
Core prices are viewed by the Federal Reserve (Fed) as a better
gauge of longer-term inflationary pressure because they exclude the
volatile food and energy categories. The central bank usually tries
to aim for 2% core inflation or less.
This firming of the inflation data could add to the likelihood
that the Fed will hike interest rates this year.
Indeed, Cleveland Fed president Loretta Mester reiterated her
outlook that the US economy would improve and the normalization of
monetary policy would be gradual this year depending on the
"Thus, the actual path normalization takes could very well turn
out to be either less gradual or more gradual than what we
anticipate it to be today," she said in a speech delivered in
The Fed's next policy decision meeting will take place on March
15 and 16 and will be accompanied by updated forecasts from its
members as well as a posterior press conference with Fed Chair
Meanwhile, profit taking in crude after a 14% rally continued to
take its toll on the barrel of black gold and its corresponding
effect on U.S. stocks related to the sector.
The turnaround began on Thursday after the Energy Information
Administration said U.S. crude inventories rose by 2.1 million
barrels last week, to a peak of 504.1 million barrels.
March future contracts which expire on Friday slumped -5.43%, to
$29.10, at 16:21GMT or 11:21AM ET.
Crude oil futures for April delivery, priced two dollars above
the March contract, plummeted -3.77% to $31.69.
Brent oil traded down -3.47% to $33.09.
On the business front, Nordstrom (N:JWN) plunged almost 8% as
the apparel retailers quarterly earnings missed estimates.
Along the same lines, Deere & Company (N:DE) slumped 3.7%
after the farming and construction equipment maker reported a drop
in quarterly profit and lowered its 2016 forecast.
In the positive, Applied Materials (O:AMAT) jumped more than 8%
and led the gainers on the Nasdaq 100 as the world's largest maker
of machinery for the fabrication of semiconductor chips reported
earnings that beat consensus and gave an upbeat forecast.
Also worth noting in the tech sector, Yahoo (O:YHOO) rose 1.6%
as it announced that it would explore strategic alternatives,
alongside its plan to reorganize and spin off its Internet
Though the tech-heavy NASDAQ Compositemanaged to gain 0.39% to
4,505 points , the blue-chip Dow 30 sank 0.20% to 16,380, while the
benchmark S&P 500 attempted to regain ground, shedding only
0.02%, to 1917 points.
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