Markets closed down on Wall Street today: Dow -0.07%, S&P -0.06%, Nasdaq -0.64%, Oil +0.97%, Gold +0.52%.
On the commodities front, Oil (NYSE:USO) climbed to $87.49 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,794.20 an ounce and Silver (NYSE:SLV) rising 1.26% to $40.35 an ounce.
Today’s markets were down because:
1) Producer Price Index. The Labor Department’s PPI advanced 0.2% in July, following a 0.4% decline in June. That means that wholesale costs for producers rose last month, and at their fastest rate in six months, pushed higher by tobacco prices, light trucks, and pharmaceuticals. Economists had only expected a 0.1% advance. Producer prices are one of three monthly inflation gauges reported by the Labor Department — the other two are prices of goods imported to the U.S., which rose 0.3% in July according to a data release yesterday, and consumer prices, which rose 0.2% in July. Increasing inflation could potentially limit the Federal Reserve’s ability to ease credit.
2) Tech. With little in the way of big policy announcements or data releases, today’s markets were a little less volatile than they have been over the past couple weeks, and relied more heavily on the performance of individual sectors and companies. Dell (NASDAQ:DELL) and other tech stocks accounted for a significant amount of the Nasdaq’s losses today after the computer maker slashed its full-year revenue forecasts, citing weaker sales. Dell shares fell more than 10%, Cisco (NASDAQ:CSCO) declined 0.94%, Intel (NASDAQ:INTC) fell 0.58%, and even Apple (NASDAQ:AAPL) declined 0.01% despite opening high this morning.
3) Retail. Retail stocks were in focus today after both Target (NYSE:TGT) and Staples (NASDAQ:SPLS) reported better-than-expected earnings. Abercrombie & Fitch (NYSE:ANF) also reported earnings today, demonstrating increased sales and profit but a declining gross margin as input costs rose 28% in the second quarter, a problem many clothing retailers have been facing as both cotton and fuel prices have been high. But with cotton prices beginning to fall, the coming months should show some improvement in that department, and Abercrombie plans to increase prices to make up the difference. Overall, consumers have been getting a mixed message from retailers. Many of those reporting earnings today beat expectations, but companies like Wal-Mart (NYSE:WMT) have only barely managed to stay afloat as U.S. sales decline drastically.