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GLOBAL MARKETS-Bond yields dip, stocks mostly fall with CPI, earnings ahead
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GLOBAL MARKETS-Bond yields dip, stocks mostly fall with CPI, earnings ahead
Jan 14, 2025 1:11 PM

*

S&P 500 down in afternoon trading

*

U.S. bond yields ease slightly after recent surge

*

US CPI data on Weds key for Fed outlook

(Updates to US afternoon trading)

By Caroline Valetkevitch

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

on Tuesday after data showed U.S. producer prices rose less than

expected in December, and stock indexes mostly fell as 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.

Most stock indexes were higher following the PPI report but

the S&P 500 and Nasdaq turned lower.

U.S. fouth-quarter 2024 earnings get rolling on this week,

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.

"Earnings will continue to be strong, and the problem really

for this market is it's already pricing in good earnings, so

maybe you're going to need very good earnings to keep its rise

going. Also, inflation/bond market levels have been a real

concern for stocks," said Rick Meckler, partner at Cherry Lane

Investments, a family investment office in New Vernon, New

Jersey.

The Dow Jones Industrial Average rose 81.04

points, or 0.18%, to 42,378.16, the S&P 500 fell 8.39

points, or 0.14%, to 5,827.83 and the Nasdaq Composite

fell 86.33 points, or 0.45%, to 19,001.77.

MSCI's gauge of stocks across the globe

rose 1.23 points, or 0.15%, to 833.02. 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.

The yield on the benchmark 10-year Treasury note

eased marginally, 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 index, which measures the greenback

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

fell 0.13% to 109.26, with the euro up 0.53% at

$1.0298.

Against the Japanese yen, the dollar strengthened

0.29% to 157.92.

Oil prices eased from the previous day's four-month highs.

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

and Brent dropped to $1.09 to settle at $79.92.

In Asia overnight, Japan's Nikkei slumped 1.8% as

investors shed chip stocks and worried about a possible Bank of

Japan interest rate hike.

Bank of Japan Deputy Governor Ryozo Himino, in a speech to

Japanese business leaders, left the door open to a rate hike at

the conclusion of the next policy meeting on Jan. 24.

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