Inflation Cools, Heats Wall Street

Energy, food drive big May bump in consumer spending as core inflation stays cool

(NEWSER) - The consumer price index jumped 0.7% in May, riding high energy prices to its second-biggest spike in 16 years. But the volatile food and energy sectors appeared not to disrupt the rest of the economy, MarketWatch reports. The core CPI, which excludes food and gas prices, rose only 0.15%, just enough below 0.2% forecasts to calm inflationary fears. More»

(NEWSER) - Stocks took a turn for the worse at the open today, heading south after yesterday’s rally. The Dow fell 67 points, while the S&P declined 0.8%. The Nasdaq fell 0.5%, but component Sun Microsystems soared 65% on news IBM might acquire it. Investors are anxiously awaiting guidance out of today's Fed meeting, even though the target rate’s unlikely to move. The consumer price index rose 0.4% last month, a bigger-than-expected jump. More»

Fed may have hands tied, as CPI soars past expectations

(NEWSER) - Core inflation bounded ahead of expectations in January, which is bad news for anyone betting on a big rate cut from the Fed–and for the Fed itself. The consumer price index rose 0.4%, with core CPI rising 0.3%, putting the year-over-year figures at 4.3% and 2.5% respectively, well above the Fed’s traditional 1.5%-2% comfort zone, the Wall Street Journal reports. More»

Despite record growth, Wall Street has plenty of cause for concern, Business Week says

(NEWSER) - Wall Street is giddy with low unemployment, optimistic earnings predictions, and a resilient economy, but BusinessWeek lists five things for investors to worry about.

1. Volatility in earnings, especially tech companies
2. Consumer spending, as gas prices take their toll
3. Inflation, which could prompt the fed to raise interest rates
4. Subprime aftereffects, as the panic spreads to other forms of debt
5. Too much optimism, as it starts to look like irrational exhuberance

Falling futures mean we're not out of the woods

(NEWSER) - Global stocks were up early today following an uptick on Wall Street in the wake of the Fed's pledge to keep interest rates low. But it wasn't clear if the rebound would hold. Asia rates climbed and modest hikes marked Britain's FTSE 100 index (up .2%) and Germany's DAX (up .9%), though the CAC-40 in Paris was down .3%, and the the Euro Stoxx 50 index of euro zone blue chips opened higher but was down .4% by mid-morning. More»