Treasury Yields Halted Advance After Producer Price Inflation Slowed In December

Barry Adams
14 Jan, 2025
Select

Wall Street indexes advanced, and investors reviewed the first of two inflation reports amid heightened attention to underlying drivers after a strong jobs market report. 

The S&P 500 index increased 0.4%, and the Nasdaq Composite advanced 0.5% after the producer price index rose less than expected in December. 

The measure of the wholesale price index rose 0.2% from the previous month, and the core index, which excludes volatile food and energy prices, was flat, according to a report released by the Bureau of Labor Statistics Tuesday. 

On an annual basis, producer price inflation accelerated to 3.3% in December from 3.0% in the previous month, and the core rate of inflation advanced to 3.5%. 

Market participants are sensitive to inflation reports after nonfarm payrolls expanded by faster-than-expected 256,000 in December, confirming that the jobs market is too strong for the Federal Reserve to lower rates at its next meeting, later in the month. 

Investors now shifted their attention to the release of the consumer price inflation report on Wednesday, which could provide deeper insights into the policymakers' options on rate policy. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.5% to 5,885.53, the Nasdaq Composite rose 0.6% to 19,168.15, and the Russell 2000 index inched up by 0.4% to 2,199.08. 

The yield on 2-year Treasury notes edged higher to 4.41%, 10-year Treasury notes inched up to 4.79%, and 30-year Treasury bonds increased to 4.98%.

WTI crude oil decreased $0.11 to $78.11 a barrel, and natural gas prices edged down 11 cents to $3.74 a thermal unit.

Gold decreased by $2.21 to $2,665.09 an ounce, and silver fell by $0.01 to $29.67. 

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.28 to 109.68 and traded at a two-year high. 

 

U.S. Stock Movers 

KB Home increased 10.6% to $70.86 after the home builder reported better-than-expected quarterly results. 

Revenue in the fourth quarter increased 19% to $1.99 billion from $1.67 billion, net income advanced 27% to $190.6 million from $150.3 million, and diluted earnings per share rose to $2.52 from $1.85 a year ago. 

Homes delivered in the quarter increased 17% to 3,978 homes, and net orders and net order value for the quarter both increased by 41%, reaching 2,688 and $1.32 billion, respectively. 

IAC Inc. increased 1.8% to $43.35 after the parent of Daily Beast and Match.com announced its plans to spin off home improvement marketplace Angi. 

Big banks traded higher ahead of their earnings releases on Wednesday. 

JPMorgan Chase jumped 0.1% to $244.40, Wells Fargo increased 0.7% to $71.0, and Citigroup advanced 0.8% to $73.35. 

Signet Jewelers Ltd. plunged 16% to $62.12 after the parent company of Zales lowered its fourth quarter outlook. 

The company estimated total sales in the fourth quarter to range between $2.32 billion and $2.335 billion, compared to the previous estimate between $2.38 billion and $2.46 billion. 

Same-store sales outlook in the quarter was lowered to a range between a decline of 2.0% and 2.5%, compared to the previous range between flat and an increase of 3.0%. 

The diamond jeweler said same-store sales in the ten-week period to January 11 declined 2% from a year ago. 

The company blamed the sales decline on "merchandise assortment gaps at key gifting price points" and customers seeking more items with promotional discounts.