Wednesday’s Mid-Day Movers: 3 Stories Driving Markets

Major stocks continued to rise on Wednesday afternoon even as Gold and Oil slid lower. As of 12 p.m.:

DIJA: +0.41% to 15278.14 S&P 500: +0.50% to 1658.61 NASDAQ: +0.28% to 3472.32
Gold: -1.92% to 73.24 Oil: -0.21% to 21.71 U.S. 10-Year: +0.56% to 19.63

Here are three stories helping shape the markets on Wednesday afternoon:

1. Inflation Takes a Chill Pill, Leaving Plenty of QE Wiggle Room: The seasonally adjusted Producer Price Index for finished goods decreased 0.7 percent in March, according to data released by the U.S. Bureau of Labor Statistics on Wednesday. This is the largest sequential decline in three years, and is in line with economist expectations. On the year, unadjusted producer prices are up 0.6 percent, the smallest rise in nearly a year.

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The PPI measures prices changes from the perspective of the seller. This makes the headline index a gauge of the prices received by producers for a fixed basket of goods. So, although the Consumer Price Index is the core measure of inflation, changes in the PPI index can be used as a leading indicator of inflation… (Read more.)

2. General Business Conditions Continue Their Downward Slide: Manufacturing activity in New York unexpectedly contracted this month, falling to the lowest level in four months. On the back of declines in both new orders and employment, the New York branch of the Federal Reserve’s “Empire State” general business conditions index dropped to a minus-1.43 in May from 3.05 in April. This was the first reading below zero since January, and a reading below that level shows that the sector contracted.

Economists polled by Reuters had expected the index to increase to 4… (Read more.)

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3. The Housing Market Responds to Rising Interest Rates: The housing recovery reinforced the belief that it is heavily dependent on low interest rates induced by the Federal Reserve, as mortgage applications declined for the first time in over a month.

According to the Mortgage Bankers Association’s latest report for the week ending May 10, loan application volume fell 7.3 percent on a seasonally adjusted basis from one week earlier. This comes after a 7 percent increase. These figures include both refinancing and home purchase demand, and cover over 75 percent of all domestic retail residential mortgage applications…(Read more.)

Don’t Miss: Inflation Takes a Chill Pill, Leaving Plenty of QE Wiggle Room.

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