Stocks fall on news of rising producer prices

Stocks fell in early trading Tuesday after wholesale inflation rose more than expected in November, led by a surge in energy costs.
DEC 15, 2009
Stocks fell in early trading Tuesday after wholesale inflation rose more than expected in November, led by a surge in energy costs. The increase likely will be discussed as Federal Reserve policymakers begin a two-day meeting on interest rates. The Fed is expected to keep rates unchanged when it releases a policy statement following the meeting Wednesday. The Labor Department said wholesale prices jumped 1.8 percent last month, 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. A number of investors see a rate hike coming within the next year as the Fed takes a pre-emptive strike to keep inflation at bay. That would help shore up the value of the dollar, but also could trip up a rally that has pushed stocks sharply higher over the past nine months. Investors also turned cautious after Best Buy said its fourth-quarter profit margins will face pressure as shoppers look for less expensive items. The comments came as the electronics retailer said its third-quarter earnings more than quadrupled. Stocks fell overseas as the dollar rose against the euro amid continuing worries about Greece's debts and the financial health of Austria's banks. In midmorning trading, the Dow Jones industrial average fell 38.84, or 0.4 percent, to 10,462.21. The broader Standard & Poor's 500 index fell 4.99, or 0.5 percent, to 1,109.12, and the Nasdaq composite index fell 10.10, or 0.5 percent, to 2,202.00. Later Tuesday, investors will get a fresh assessment on the housing market. The National Association of Home Builders is expected to release its housing market index for December. The index tracks builders' perceptions of market conditions around the country. Investors know that any market gains could slip in this last full trading week of the year, as traders may try to lock in profits made since March. Major stock indexes closed at new highs for the year Monday as Abu Dhabi's $10 billion in aid to help Dubai eased concerns over the emirate's debt problems. A takeover deal by Exxon Mobil Corp. raised optimism about mergers and acquisitions activity. Late Monday, Wells Fargo & Co. became the last of the big banks to strike a deal to repay U.S. government assistance. The San Francisco-based bank said it would sell $10.4 billion in new stock to help repay all $25 billion in bailout aid it received from the government at the height of the market meltdown last fall. Earlier in the day, Citigroup Inc. said it would repay $20 billion worth of taxpayer funds. Wells Fargo rose 29 cents to $25.78, while Citigroup fell 6 cents to $3.64. Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.59 percent from 3.56 percent late Monday. The dollar rose against other major currencies, while gold prices fell. Crude oil rose $1.26, to $70.77 per barrel on the New York Mercantile Exchange. Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 159.4 million shares, compared with 191.6 million shares traded at the same point Monday. Overseas, Japan's Nikkei stock average fell 0.2 percent. In afternoon trading, Britain's FTSE 100 fell 0.8 percent, Germany's DAX index fell 0.4 percent, and France's CAC-40 lost 0.6 percent.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.