Reported U.S. Inflation Measure Falls, Home Builders Confidenc at 9-year High

Nichole Harper
17 Sep, 2014
New York City

Stocks on Wall Street edged higher and reported measure of inflation declined for the first time in eighteen months. Home builder

[R]12:10 PM New York – Stocks on Wall Street edged higher and reported measure of inflation declined for the first time in eighteen months. Home builder’s confidence increased to a nine-year high. China steps up courting India to bolster trade ties following Modi’s visit to Japan.[/R]

Stocks on Wall Street gained and consumer price index fell in August, the monthly decline in a measure of inflation since April 2013.

The U.S. Labor Department said its Consumer Price Index fell 0.2% in August after rising 0.1% in July. The decline in price was largely driven by a fall in energy prices offsetting an increase in food and housing cost.

S&P 500 index increased 0.87 to 1,999.88 and the Nasdaq Composite Index added 5.31 to 4,558.07.

Federal Reserve is scheduled to release its policy statement and revised economic projections this afternoon at 2 p.m. today in Washington.

Homebuilder’s confidence reached to highest level since November 2005, according to the data released by the National Association of Home Builders.

The index increased for the fourth month in a row to 59, the highest in nearly nine years and any reading above 50 is considered positive.

In a statement, NAHB Chief Economist David Crowe said, “While a firming job market is helping to unleash pent-up demand for new homes and contributing to gradual, upward trend in builder confidence, we are still not seeing much activity from first-time home buyers.”

U.S. Movers

Rackspace Hosting, Inc ((RAX)) plunged 16% to $33.08 after the company issued a statement after the market close that it has ended its plan to be acquired and the company will remain independent.

Skechers USA Inc plunged 8.1% to $58.51 after the company sued California based retailer DB Shoe Company for selling shoes that infringes on its seven separate design patents.

Tivo Inc ((TIVO)) traded unchanged at $13.71 after the company finalized its price for the $200 million convertible note offering.

European Markets

In London trading, FTSE 100 index slid 0.1% or 9.83 to 6,782.41 and in Frankfurt the DAX index jumped 0.4% or 40.64 to 9,673.57.

In Paris, CAC 40 index climbed 0.6% or 26.70 to 4,435.85.

Spain-based Inditex net slipped 2% to €928 million but sales jumped 6%. JD Sports, the U.K. based sportswear retailer said profit climbed 154% and revenue surged 27% to £722 million.

Smiths Group, the U.K. based industrial conglomerate said profit plunged 26% to £235 million after dropped 5% to £2.9 billion.

Asian Markets

China’s Premier Xi Jinping began his three-day visit to India to bolster trade ties and increase investment in infrastructure projects. Jinping’s visit is the first by a Chinese premier in eight years to India.

China is expected to announce investments to improve vast rail network in India and also set up two industrial parks in Gujarat and Maharashtra states. China and India are two neighbors and two most populous nations in the world.

In Mumbai trading, the Sensex Index gained 138.78 or 0.5% to close at 26,631.29 The CNX Nifty increased 42.60 to 7,975.50.

Stocks in Tokyo declined for the second day in a row and the broader Topix index edged down after gaining for five days in a row.

Markets in Asia gained higher after China announced a surprise move to pump 500 billion yen or $81 billion in its banking system.

The People’s Bank of China is expected to pump 100 billion yen in five largest bank over the next three-month period, according to a senior official at the central bank.

The additional credit is expected to ward off the coming liquidity crunch in the next few weeks and is also likely to spur off more lending to bolster industrial production. However, banks in China are addicted to property lending.

The Nikkei 225 Stock Average fell 22.86 to 15,888.67 and the broader Topix index slid 5.90 to 1,304.96.

The yen declined to close at 107.25 against one U.S. dollar.