Wall St. worries about inflation

Futures slip on bigger-than-expected PPI reading, while Intel's results may weigh on Nasdaq; oil hits 20-month low.


NEW YORK (CNNMoney.com) -- Stock futures pointed to a lower open Wednesday morning following a larger-than-expected increase in wholesale inflation and lower earnings from the tech giant Intel.

At 8:40 a.m. ET, both S&P and Nasdaq futures were down, indicating a lower start for both the tech-laden exchange and the broader market.

The Producer Price Index, or the rate of price increases at the wholesale level, slowed in December after a spike the previous month, the government reported Wednesday, but the inflation pressure topped Wall Street expectations.

PPI showed a 0.9 percent rise in the most recent report after jumping 2 percent in November. Economists surveyed by Briefing.com had forecast a 0.5 percent rise in the most recent reading.

The more closely watched core PPI, which strips out often volatile food and energy prices, was up 0.2 percent, compared to November's 1.3 percent increase. Economists had forecast a 0.1 percent rise in the core PPI.

Oil continued to slump, hitting a 20-month low, falling towards the $50 mark. U.S. light crude eased 65 cents to $50.56 a barrel in electronic trading. A sharp decline in oil prices Tuesday helped lift U.S. stocks, taking the Dow Jones industrial average to its third straight record high.

Treasury prices were unchanged. The 10-year note yield held at 4.75 percent.

Intel (Charts) shares fell in after-hours trading Tuesday after it reported gross margins that were thinner than analysts had hoped.

The stock could also be hit Wednesday by news that European Commission staff have again asked the EU's antitrust chief for permission to prepare formal charges against the world's largest chip maker, according to published reports.

Earnings reported early Wednesday morning were mixed.

Dow component JP Morgan Chase (Charts), the nation's No. 3 financial services firm, reported a 47 percent rise in earnings and revenue that easily topped forecasts, while Southwest Airlines (Charts), the nation's largest airline in terms of market value, saw a narrow earnings gain that met forecasts.

AMR (Charts), parent of American Airlines, the largest carrier based on passenger traffic, is due to report later Wednesday.

Leading home builder Lennar (Charts) reported a bigger-than-expected loss in the fourth quarter but said that it should be able to meet or top 2006 full-year earnings in the current fiscal year, which would put it well above forecasts.

Tech bellwether Apple (Charts) reports after the market close.

In non-earnings corporate news, the board of cable operator Cablevision (Charts)rejected a raised $30 a share cash offer by the founding Dolan family, which controls 70 percent of its voting shares.

CVS (Charts) said late Tuesday it would pay a special cash dividend to shareholders of Caremark Rx in an answer to the improved bid from rival Express Scripts.

Just before the market opens comes reports on industrial production and capacity utilization, while at 2 p.m. ET the Federal Reserve is set to release its beige book, which includes the take on economic activity by the Fed banks around the country.

Markets in Asia closed mostly higher on new doubts that the Bank of Japan will raise interest rates there. Stocks in Europe were mixed in early trading.


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.