NEW YORK: Wall Street opened lower on Wednesday despite rosy bank earnings and economic data that pointed to a pickup in inflation and industrial production.
Investors may be on the sidelines, anticipating Friday’s inaugural address by President-elect Donald Trump for insights into coming policies that may offer economic stimulus.
Wall Street sagged last week after a Trump press conference failed to fill in the blanks on possible tax cuts, deregulation and spending, hopes for which had seen markets rally since November.
Five minutes into the day’s trading, the blue-chip Dow Jones Industrial Average was down 0.3% at 19,768.28, while the broader S & P 500 had fallen 0.1% to 2,264.81 and the Nasdaq was flat at 5,537.51.
US industrial production jumped 0.8% in December, erasing a decline recorded the month before, the Federal Reserve reported.
Wall Street may have other reasons to turn its eyes to the Fed on Wednesday, with the central bank due to produce its regular Beige Book report on economic activity and Fed Chair Janet Yellen due to speak at 2000 GMT.
Meanwhile, the Labour Department reported the Consumer Price Index, an important measure of inflation, continued to rise in December, with one measure seeing its largest 12-month gain in two and a half years.
”The key takeaway from this report is that the consumer inflation rate is steadily rising, which is supporting the Federal Reserve’s tightening bias at this juncture,” said Patrick O’Hare of Briefing.com.
Goldman Sachs on Wednesday posted fourth-quarter revenue of US$8.17bil, easily beating analyst expectations on a surge of trading in the post-election Wall Street Rally.
Shares in the bank were nevertheless down 0.8% shortly after the opening bell.
Citigroup fell even further, losing 1.4%, even though the bank also beat expectations, announcing a quarterly profit of US$1.14 per share with net income up 7.1%. - AFP
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