US STOCKS-Wall Street slides as hot producer price data crimps rate cut bets

Vulcan Materials Co

16/02/2024 21:00

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      Rising services costs boost US producer inflation in Jan
    

        * 
      Roku slides on forecasting bigger first-quarter loss
    

        * 
      Coinbase surges after first profit in 2 years
    

  
 (Updates with preliminary close of stock indexes)
    By Carolina Mandl, Amruta Khandekar and Ankika Biswas
       Feb 16 (Reuters) - 
    U.S. stocks fell on Friday after a hotter-than-expected
producer prices report eroded hopes for imminent interest rate
cuts by the Federal Reserve.
    A Labor Department report showed producer prices increased
more than expected in January, feeding fears inflation was
picking up after months of cooling.
    The data could encourage the Fed to wait before cutting
rates. Earlier this week, a hot consumer prices report sparked a
selloff in equity markets although a slump in January retail
sales on Thursday stoked hopes of rate cuts.
    "The inflation data this week are definitely going to keep
the Fed at least on pause until summer," said Carol Schleif,
chief investment officer at BMO family office. "Data is bumpy,
it's not a straight line." 
        Treasury yields spiked after the report as traders added
to bets that the Fed may defer the first rate cut until after
June.
    "The theme of higher for longer is really the continuing
market narrative" for interest rates, said Greg Bassuk, Chief
Executive Officer at AXS Investments.
     Two Fed officials set the tone for caution. Atlanta Fed
President Raphael Bostic said he needed more evidence that
inflation pressures are falling, but is open to lowering rates
at some point in the next few months. San Francisco Fed
President Mary Daly said "there is more work to do" to ensure
stable prices, despite remarkable progress.
        According to preliminary data, the S&P 500
 .SPX  lost 24.18 points, or 0.49%, to end at 5,005.15 points,
while the Nasdaq Composite  .IXIC  lost 132.38 points, or 0.83%,
to 15,775.65. The Dow Jones Industrial Average
 .DJI  fell 149.48 points, or 0.39%, to 38,623.64.
  
    Most megacap stocks dropped, with Meta Platforms  META.O 
falling and dragging the S&P 500 communication services
 .SPLRCL  index down.
    Robust corporate earnings and surging enthusiasm around
artificial intelligence has helped the S&P 500 close above the
5,000-point mark for the fourth time this year.
        Applied Materials  AMAT.O  jumped after the
semiconductor equipment supplier forecast better-than-expected
second-quarter revenue on strong demand for advanced chips used
in AI.
    Vulcan Materials  VMC.N  gained after forecasting a higher
full-year profit, aiding a rise in the S&P 500 materials sector
index  .SPLRCM .
    Roku  ROKU.O  slumped after forecasting a bigger
first-quarter loss, while crypto exchange Coinbase Global
 COIN.O  jumped on posting its first quarterly profit since
2021.
    DoorDash  DASH.O  dropped as the delivery firm forecast a
quarterly profitability metric below expectations, hurt by
higher labor costs.

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Monthly change in US Producer Price Index    https://reut.rs/3SX7WUp
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 (Reporting by Carolina Mandl, in New York, Amruta Khandekar and
Ankika Biswas in Bengaluru; Editing by Maju Samuel, Chizu
Nomiyama and David Gregorio)
 ((Amruta.Khandekar@thomsonreuters.com))