NEW YORK: Wall Street stocks finished little changed on Thursday (Aug 14) as markets absorbed a disappointing inflation report, while oil prices shot higher on the eve of a US-Russia summit on Ukraine.
After a negative start, major US indices worked their way back up to even following July wholesale price data.
The producer price index rose 0.9 per cent on a month-on-month basis, much greater than analysts expected following benign consumer pricing data earlier this week.
“The large spike in the Producer Price Index (PPI) this morning shows inflation is coursing through the economy, even if it hasn’t been felt by consumers yet,” said Chris Zaccarelli, chief investment officer for US-based Northlight Asset Management.
Zaccarelli called the report a “most unwelcome surprise”, adding that it is “likely to unwind some of the optimism of a ‘guaranteed’ rate cut next month” from the Federal Reserve.
However, futures markets still were betting on a quarter point interest rate decrease, but the PPI data likely means a large half-point rate cut is “off the table”, said Jack Ablin of Cresset Capital Management.
All three major US indices finished within 0.1 per cent of their start points.
In Europe, the main markets in Paris, Frankfurt and London registered positive figures by the close of trading.
