Markets Decline on Inflation and Oil

123jump.com Staff
30 Nov, -0001
New York City

Cosumer Price Index dips by 0.1% on the decline in oil prices by 3.4% in the month of May. Industrial Production increase as businesses build inventories. Markets sell-off as tech, health care, casinos sell-off but home builders jump.

The Consumer Price Index for All Urban Consumers decreased 0.1 percent in May, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The May level of 194.4 was 2.8 percent higher than in May 2004.

On a seasonally adjusted basis, the CPI-U declined 0.1 percent in May, following an increase of 0.5 percent in April. Energy costs, which advanced sharply in each of the preceding three months, declined 2.0 percent in May. Within energy, the index for petroleum-based energy decreased 4.2 percent while the index for energy services increased 0.8 percent. The index for food rose 0.1 percent, following a 0.7 percent increase in April. The index for all items less food and energy, which was virtually unchanged in April, increased 0.1 percent in May.

The housing index has recently come under pressure as many people find it odd that index does not reflect the consistent price increase in existing and new home prices across the country.

Shelter costs were virtually unchanged for the second consecutive month as a decline in the index for lodging while away from home offset increases in the indexes for rent and owners’ equivalent rent.

The index for housing rose 0.1 percent in May. For the second consecutive month, shelter costs were virtually unchanged, again largely as a result of a decline in the index for lodging away from home. The index for lodging away from home declined 2.4 percent in May, following a 1.2 percent decrease in April.

In May, the indexes for rent and owners' equivalent rent increased 0.2 and 0.3 percent, respectively. The index for fuels and utilities rose 0.6 percent, following a 2.1 percent increase in April. Declines in the indexes for fuel oil and for natural gas--down 2.3 and 0.2 percent, respectively--were more than offset by a 1.4 percent increase in the index for electricity.

Medical care costs rose 0.3 percent in May to a level 4.3 percent higher than a year ago. The index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies--increased 0.5 percent in May. The index for medical care services rose 0.3 percent in May, with the indexes for professional services and for hospital and related services each up 0.3 percent.

The U.S. Census Bureau announced today that the combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $998.6 billion, up 1.2 percent from March and up 8.3 percent from April 2004.

Manufacturers’ and trade inventories adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,299.5 billion, up 0.3 percent from March and up 7.6 percent from April 2004.

The total business inventories/sales ratio based on seasonally adjusted data at the end of April was 1.30. The April 2004 ratio was 1.31.

Industrial production increased 0.4 percent in May after a decline of 0.3 percent in April. Manufacturing output rose 0.6 percent in May. Mining production edged up 0.1 percent, and the output of utilities declined 0.7 percent.

At 118.6 percent of the 1997 average, overall industrial output was 2.7 percent above its May 2004 level. The rate of capacity utilization for total industry rose 0.3 percentage point, to 79.4 percent, a rate 1.6 percentage points below its 1972--2004 average.



Bear Sterns, banking and brokerage firm, reported 2Q earnings rise of 3% which translates to $2.56 per share compared with $2.49 last year. The net income rose 5% to $365 million.

Crown Media, cable television operator, reported 1Q net loss of 49 cents per share compared with 40 cents in the prior-year period. The quarterly revenue increased 21%, from $33.4 million to $40.6 million.

AMIS Holdings, parent company of AMI Semiconductor, updated its 2Q outlook stating earnings of 12 cents per share to 14 cents including 2 cents a share tax charge. The company expects higher revenue and gross margins on strong target markets.

Tommy Hilfiger, fashion designer, sees its 2006 pretax earnings from 30% to 35% higher but revenue lower. Preliminary 2005 earnings fell 46% to $92 million, revenue declined to $492 million from $510 million.

Haemonetics, blood processing systems maker, backed its 2006 outlook for earnings of $1.73 to $1.83 on higher revenue. The shares traded 3 cents up, at $42.12.

Publisher John Wiley & Sons posted 4Q 25% earnings increase to 20 cents a share excluding taxes and a 4% revenue rise to $241.6 million on strong sales. The publisher released 2006 revenue and earnings growth outlook.

Lazard, investment bank, posted 281% increase in earnings for the first quarter, or 31cents per share vs. 8 cents a year ago. The results reflect structural changes after the bank went public last month. On Tuesday shares climbed 96 cents to $23.10.

Chiron, biotech developer, cut its 2005 earnings guidance due to reduced production forecast. The company expects earnings to be between $1.20 and $1.45 per share vs. earlier forecast of $1.40 to $1.50 a share. The stocks closed down 22 cents at $37.95 on Tuesday.

ITW lowered its income outlook for the second quarter to $1.22 or $1.26 per share as well as for 2005 to $4.90 to $5 a share. The company lost 2 cents and closed at $82.41 on Tuesday.

Stocks in Europe finished down although banks and insurers gained on M&A speculations. Markets were dragged on climbing oil prices which topped $56 a barrel and expectations of weak consumer spending. Averages fell 0.9% in Germany, 0.3% in France and 0.5% in the U.K.

Most Asia-Pacific markets closed higher as Japanese stocks advanced further up after the Nikkei hit a two-month high the previous session. The index added 0.7% led up by banking and export-related stocks. Taiwan’s index ended up 0.8%, Seoul’s Kospi was up 1.9% whereas China’s Shanghai Composite index closed down 1.9%. The U.S. dollar bought 109.34 yen in late U.S. trading.