Producer prices rise in January. Home Depot reports a drop in profit and misses Wall Street's estimate. Mortgage foreclosures soar. MBIA lowers its dividend.
Higher energy and food prices sent producer prices surging in January.
The Producer Price Index jumped 1% in January, the Labor Department reported this morning, much higher than the 0.4% increase economists had expected. The PPI had fallen 0.3% in December.
Core PPI, which excludes volatile food and energy prices, rose 0.4% last month, 0.1% higher than the consensus estimate.
Year-over-year, the PPI is up 7.4%.
Stocks turned around by midmorning, adding to Monday's strong rally. At 11:05 a.m. ET, the Dow Jones Industrial Average was up 45 points to 12,614 after soaring 189 points Monday. This morning, the Nasdaq Composite Index had added 4 points to 2,360, and the Standard & Poor's 500 Index was up 1 point to 1,373.
Light, sweet crude oil was down 33 cents to $98.90 a barrel this morning.
Companies from Kellogg to Hershey have been forced to raise prices on their products because of surging costs for commodities like wheat and cocoa.
The Federal Reserve has been struggling to monitor inflation growth while keeping the economy on track, but some critics worry that the Fed has cut rates too much and too quickly, and "stagflation" has returned to the economic vocabulary.
Still, former Treasury Secretary Larry Summers said worries about stagflation, when inflation rises and economic growth slows, are not a huge concern.
"I just don't see (stagflation) as anywhere near around the corner right now in the U.S. I think you have inflation expectations pretty securely anchored in the 2-plus-percent range. If you think back to the 1970s, where people were thinking they were going to lose half the value of their money in a year, I don't think we're anywhere near that kind of thing," Summers, now managing director of D.E. Shaw Group, said on CNBC this morning.
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