Wall Street drops as caution sets in ahead of inflation data

From Reuters - February 13, 2018

(Reuters) - Wall Streets main indexes fell for the first time in three sessions on Tuesday as caution crept in ahead of crucial data on inflation, a root cause of the recent sell-off.

A strong reading on U.S. consumer price and retail sales data on Wednesday could fan fears over rising inflation and faster interest rate hikes - the same worries that sparked the sell-off after strong jobs data on Feb. 2.

Investors are probably positioning with a bit of a risk-off mindset going into those two (economic data reports) tomorrow, said Matt Miskin, market strategist at John Hancock Investments.

The core CPI estimate is a modest decrease from last month. But in the event that inflation does accelerate, that could lead volatility to continue as the Goldilocks environment maybe under further pressure.

Cleveland Fed president Loretta Mester, a voting member in the central banks rate-setting committee this year, said the recent stock market sell-off and jump in volatility will not damage the economys overall strong prospects.

After a wildly volatile week that pushed the market into correction territory, U.S. stocks gained roughly 3 percent over Friday and Monday, their best two-day gains since June 2016.

By 11:09 a.m. ET, the Dow Jones Industrial Average .DJI was down 96.29 points, or 0.39 percent, at 24,504.98, the S&P 500 .SPX was down 8.64 points, or 0.33 percent, at 2,647.36 and the Nasdaq Composite .IXIC was down 6.63 points, or 0.09 percent, at 6,975.34.

Nine of the 11 major S&P indexes were lower, led by losses in the healthcare .SPXHC and financial .SPSY indexes.

Benchmark U.S. 10-year Treasury yields US10YT=RR were hovering at 2.8439 percent, shy of their four-year peak of 2.9020 percent on Monday. [US/]


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