By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Consumer prices rise in February for the first time in four
months
NEW YORK (MarketWatch) -- U.S. stocks switched between small
gains and losses on Tuesday as investors assessed a batch of
stronger-than-expected economic reports.
Ahead of the opening bell, data showing the first increase in
inflation in four months pushed the dollar higher, and put pressure
on stock futures. A jump in new-home sales briefly boosted
confidence, as did a strong initial reading on manufacturing
activity in March. Moves have been muted, however.
The S&P 500 (SPX) was flat at 2,105 with five of its 10 main
sectors trading higher.
The Dow Jones Industrial Average (DJI) added 12 points to
18,067. About two-thirds of the 30 components were trading
higher.
The Nasdaq Composite (RIXF) outperformed other benchmarks,
adding 17 points to 5,027.
The dollar (DXY) resumed its march higher after a brief pause on
Monday, putting pressure on oil and gold prices.
Randy Frederick, managing director at the Schwab Center for
Financial Research, said markets appear to be puzzled about
economic indicators.
"The post-Fed rally we had indicates that expectations for the
first rate hike have been pushed back to July or August. Between
now and the next earnings season, there is not much to prompt
investors to change their positions," Frederick said.
Pointing at low levels of implied volatility measured by the
CBOE volatility index, he said that institutional investors are not
anticipating big downside moves. The CBOE Vix has been falling
since it spiked in January and, at 13, is hovering around its
lowest levels of this year.
Economic data: The U.S. consumer-price index climbed a
seasonally adjusted 0.2% in February, as gas prices rebounded and
the cost of food and shelter increased again, the Labor Department
said Tuesday.
Higher inflation is one of the metrics that the Federal Reserve
would like to see before committing to raising interest rates and
an uptick in February's CPI reminded investors that the first rate
hike may come as soon as June.
New U.S. homes sold at an annual rate of 539,000 in February to
mark the best month of sales in seven years, the government
reported Tuesday. Separately, U.S. house prices rose a seasonally
adjusted 0.3% in January, the Federal Housing Finance Agency said
Tuesday.
The flash reading of the Markit manufacturing purchasing
managers index unexpectedly rose in March to 55.3 from 55.1 in
February, to mark the highest reading since October.
Speaking at CityWeek in London on Tuesday, St. Louis Federal
Reserve President James Bullard said that the Fed's zero-rate
interest policy is no longer appropriate and that a rate hike this
summer wouldn't strangle the U.S. economic recovery. However, he
warned the reaction to the first rate hike may be 'violent',
because of mismatch in expectations.
Fed's Williams makes case for not delaying rate hike
(http://www.marketwatch.com/story/feds-williams-makes-case-for-not-delaying-rate-hike-2015-03-24)
Stocks to Watch: Whiting Petroleum Corp.(WLL) shares plunged 20%
after the oil and gas company announced a secondary stock
offering.
McCormick & Co.(MKC) shares jumped after quarterly results
that came in above expectations.
Chesapeake Energy Corp.(CHK) rose 3.6%. The company cut its
outlook for 2015 capital expenditure
(http://www.marketwatch.com/story/chesapeake-energy-cuts-2015-capex-production-outlook-2015-03-23)
due to continued weak commodity prices.
Shares of Freeport-McMoRan Inc.(FCX) slid 2.8% after the world's
largest copper producer slashed its quarterly dividend by 84% in
response to the negative impact of lower commodity prices.
More on notable movers in Movers & Shakers column
(http://www.marketwatch.com/story/mccormick-ihs-sonic-earnings-in-focus-2015-03-24).
Other markets: European stocks inched higher on the upbeat news
out of Germany.
Hong Kong's Hang Seng Index
(http://www.marketwatch.com/story/japanese-hong-kong-stocks-retreat-after-weak-chinese-data-2015-03-24)
fell after the Chinese factory data, while Japan's Nikkei broke a
two-day winning streak with a 0.2% fall.
Oil prices (CLK5) swung between losses and gains, with U.S. May
crude flat at $47.46 a barrel, though investors are watching for
supply data due later. Gold (GCK5) pared earlier gains and was flat
at $1,188.20 an ounce.
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