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Dow ends with gain, Nasdaq ends lower

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U.S. bond yields ease slightly after recent surge

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US CPI data on Weds key for Fed outlook

(Updates with closing U.S. market levels)

By Caroline Valetkevitch

NEW YORK, Jan 14 (Reuters) - U.S. Treasury yields dipped

while the S&P 500 ended slightly higher on Tuesday after data

showed U.S. producer prices rose less than expected in December,

but investors remained cautious ahead of U.S. consumer price

data on Wednesday and the start of quarterly earnings reports.

The U.S. producer price index climbed 0.2% month-on-month in

December, below expectations for a 0.3% increase and down from

0.4% in November.

Investors have been worried about persistent U.S. inflation.

The PPI report did not change the view that the Federal Reserve

would not cut interest rates again before the second half of

this year, and investors still await the more closely watched

U.S. consumer price index report.

CPI data is expected to show month-on-month inflation held

at 0.3% in December while the year-on-year figure climbed to

2.9%, from 2.7% in November.

Investors are also gearing up for U.S. fourth-quarter 2024

earnings, with results from some of the biggest U.S. banks due

starting Wednesday. Lenders were expected to report stronger

earnings, fueled by robust dealmaking and trading.

The S&P 500 shifted between gains and losses throughout the

session before ending 0.1% higher. The Dow also ended the day

higher, while the Nasdaq finished lower.

"Tomorrow really marks the start of earnings season. With

everything going on market wise, economy wise, and politically,

it's going to be a cautious period for a while. I'm not

expecting much out of the markets until we get well into

earnings season and see what companies report and what they say

about how things are," said Peter Tuz, president of Chase

Investment Counsel in Charlottesville, Virginia.

The Dow Jones Industrial Average rose 221.16 points,

or 0.52%, to 42,518.28, the S&P 500 rose 6.69 points, or

0.11%, to 5,842.91 and the Nasdaq Composite fell 43.71

points, or 0.23%, to 19,044.39.

MSCI's gauge of stocks across the globe rose

2.62 points, or 0.31%, to 834.41. The STOXX 600 index

fell 0.08%.

The potential for tariffs that could boost inflation once

President-elect Donald Trump is in office also hangs over the

market.

Bloomberg reported that Trump's aides were weighing ideas

including increasing tariffs by 2% to 5% a month to increase

U.S. leverage and to try to avoid an inflationary spike.

"There's a lot of concern over the Trump platform and

whether it will be inflationary, both from a tariff perspective

as well as from a tax reduction perspective," said Rick Meckler,

partner at Cherry Lane Investments, a family investment office

in New Vernon, New Jersey.

The yield on the benchmark 10-year Treasury note eased, but

it remained close to its 14-month high.

It was last down slightly at 4.788% after

hitting 4.805% overnight, the highest since November 2023.

Higher yields have weighed on equities by making bonds

relatively more attractive and increasing the cost of borrowing

for companies.

The dollar weakened against the euro but stayed near its

highest level in more than two years.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

fell 0.21% to 109.19, with the euro down 0.03% at

$1.0304.

Oil prices fell after a U.S. government agency forecast

steady U.S. oil demand in 2025 while it raised its forecast for

supply.

U.S. crude fell $1.32 to settle at $77.50 a barrel

and Brent dropped $1.09 to settle at $79.92.