First, wholesale prices rose again last month, by 0.3%. Outside of food and energy, prices rose at their fastest pace in 15 months with the rise in inflation at a "troubling" 0.5%.
The inflation numbers are a signal that the soaring energy costs are starting to affect other areas of the economy. Prescription drug prices rose by 1.3%, and cars and light trucks didn’t get any cheaper, says Martin Crutsinger for the Associated Press.
Certain retail and consumer-spending ETFs were up between 2% and 3% in intraday trading. Perhaps the funds are reflecting the overall optimism in the market ahead of the Federal Reserve’s rate cut late this morning.
- Retail HOLDRs (RTH), down 7.7% year-to-date
- SPDR S&P Retail (XRT), down 11.1% year-to-date
- Consumer Discretionary SPDR (XLY), down 9.4% year-to-date
- iShares Dow Jones US Consumer Goods (IYK), down 8.9% year-to-date
The news wasn’t much better for the homebuilding sector: new home construction fell by 0.6% . Wall Street had predicted a 0.2% decline. Building permits, considered an indicator of future activity, fell by 7.8% to its slowest pace in 16 years. The homebuilders ETFs were up nearly 9% intraday.
- iShares Dow Jones US Home Construction (ITB), down 2.9% year-to-date
- SPDR S&P Homebuilders (XHB), up 0.2% year-to-date
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