U.S. stocks fall on higher prices, somber fedspeak
BNN Bloomberg
Wall Street equity indexes all opened in the red and Treasury yields spiked after data showed U.S. producer prices rebounded in January by more than expected, underscoring persistent inflationary pressures that could push the Federal Reserve to pursue further interest-rate increases.
The producer price index for final demand jumped 0.7 per cent last month, the most since June, and was up 6 per cent from a year earlier, bolstered by higher energy costs. After the data release, Federal Reserve Bank of Cleveland President Loretta Mester said in prepared remarks that she saw a “compelling economic case” for rolling out another 50 basis-point hike earlier this month.
The S&P 500 Index and Nasdaq 100 each dropped more than 1 per cent. Yield on the benchmark 10-year Treasury rose to 3.84 per cent, the highest since Dec. 30.
The data picture was mixed. New U.S. home construction retreated for a fifth month in January as elevated mortgage rates continue to keep a lid on housing demand, but weekly jobless claims fell to 194,000, below expectations of 200,000.
