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.
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.
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.
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.