Wednesday February 14th


Dow futures fall more than 200 points after inflation data shows faster-than-expected rise

U.S. stock index futures erased earlier gains on Wednesday after data showed inflation rising more than expected. Dow Jones industrial average futures dropped more than 200 points, while S&P 500 and Nasdaq 100 futures declined 30 points and 81 points, respectively. The futures pointed to strong gains prior to the data release. The consumer price index rose 0.5 percent in January. Economists polled by Reuters expected a gain of 0.3 percent. Investors also digested weaker-than-expected retail sales for last month. "You got the worst-case scenario with this economic data," said Art Hogan, chief market strategist at B. Riley FBR. "You got a hotter-than-expected CPI number and weaker retail sales. Unfortunately, CPI gets much more focus than normal because of the wage growth number we saw" in the last jobs report. The 10-year note yield spiked higher to trade around 2.87 percent on the back of the data release at 8:30 a.m. ET. It traded near 2.82 percent before then. Concerns of rising inflation have recently sent jitters down Wall Street. Last week, all three major U.S. indexes finished the five-day trading period more than 5 percent down each, with the Dow delivering its worst performance since January 2016. But stocks tried to recover from those steep losses. During Tuesday's session, indexes bounced back from correction levels seen last week, with stocks posting a three-day winning streak. Asian markets closed mixed and the dollar slid to multi-month lows against the yen on Wednesday. The Nikkei 225 closed lower by 0.43 percent, or 90.51 points, at 21,154.17 after reversing gains seen earlier. Across the Korean Strait, the Kospi advanced 1.11 percent to close at 2,421.83, with Samsung Electronics extending gains and climbing 3.07 percent. Greater China markets were in positive territory, although trade was thin ahead of the Lunar New Year holidays. Hong Kong's Hang Seng Index rose 1.73 percent by 3:00 p.m. HK/SIN, with financials logging a strong performance. Mainland markets carved out moderate gains ahead of the long Lunar New Year holiday despite slight declines seen earlier in the day. The Shanghai composite tacked on 0.46 percent to close at 3,199.48 while the Shenzhen composite gained 0.48 percent to end at 1,739.15. Mainland China markets will close from Feb. 15 to Feb. 21 while Hong Kong markets will be shut from Feb. 16 to Feb. 19 for the Lunar New Year. Oil prices extended losses on Wednesday, dropping in tandem with stock market futures after U.S. government data showed consumer prices rising faster than expected in January. Crude futures were already under pressure from concerns about rising U.S. production and its impact on efforts by OPEC and its partners to control global supplies. U.S. West Texas Intermediate crude futures fell 86 cents, or 1.5 percent, to $58.33 a barrel at 8:39 a.m. (1339 GMT), after ending the previous day's session at a seven-week low. Brent crude futures were down 64 cents, or 1 percent, at $62.08 per barrel, after touching a two-month intraday low in the previous session. Gold sunk after two straight days of gains on Wednesday, after a newly published report of rising U.S. consumer prices sparked fears of rising inflation among investors. The Consumer Price Index rose 0.5 percent last month against projections of a 0.3 percent increase. Markets reversed earlier gains following the news. Spot gold was down 0.18 percent at $1,327.20 an ounce at 8:58 a.m. EST, while U.S. gold futures for April delivery erased earlier gains, flat-lining around $1,330.80 per ounce.