Futures Move Lower After Inflation Report
Stocks index futures continued to move lower Tuesday after wholesale inflation rose more than expected in November.
Futures were already trending lower following European stocks Tuesday, but the market is heading for year's end in bullish style, with the Dow and the S&P 500 both riding four-session winning streaks.
The Dow, the S&P 500 and the Nasdaq all closed at 2009 highs Monday, with the Nasdaq now up more than 40 percent for the year.
Inflation at the wholesale level surged in November, reflecting price jumps in energy and other products. The bigger-than-expected increase is certain to raise the attention of Federal Reserve policymakers beginning a two-day meeting on interest rates.
The Labor Department says wholesale prices jumped 1.8 percent in November, more than double the 0.8 percent gain analysts expected. Core inflation, which excludes energy and food, rose 0.5 percent, the biggest increase in more than a year.
Separately, New York state manufacturing weakened unexpectedly in December, according to a report from the New York Federal Reserve. The so-called Empire State index fell 2.55 in December from 23.51 in November.
This was the biggest monthly decline on record and the lowest reading since July 2009 when it was at minus 0.55.
Shares of Wells Fargo climbed in pre-market trading as it became the last of the major banks to repay its TARP funds, reaching an agreement with the government late Monday on paying back the $25 billion it received under the program.
The payback will come after Wells Fargo completes a $10.4 billion stock offering. That follows similar news from Citigroup earlier on Monday.
Though the earnings calendar is light, Best Buy reported its third-quarter results. The electronic retailer topped estimatesin the latest period, but its shares moved lower as the company's forecast fell short, reflecting a lower-than-expected profit margin. Best Buy has been cutting prices in an attempt to lure shoppers, but it is hurt its bottom line.
Another report of note comes after the closing bell when software maker Adobe Systems issues its numbers.
The Federal Reserve's Open Market Committee begins a two-day meeting today, with its latest pronouncement on interest rates and the economy coming Wednesday afternoon at about 2:15 pm New York time.
The Federal Reserve releases November industrial production and capacity utilization numbers at 9:15am, with economists expecting readings of 0.5 percent and 71.1 percent respectively. Both would constitute improvements over the October numbers.
At 1pm, the National Association of Home Builders will release its monthly sentiment index.
Dow component and NBC Universal parent General Electric holds an investor outlook meeting, starting at 3 pm, which may generate some stock-moving headlines before the closing bell rings.