Profit-takers move on Wall Street after CPI spike
NEW YORK, New York – Shares in the United States came in for profit-taking on Tuesday after all the major indices hit new record highs the previous day.
The consumer price index rose 0.9% in June, its biggest rise in thirteen years. The U.S. dollar took a sharp turn upwards, while in Europe all three of the major indices, the FTSE 100 in London, the German Dax, and the Paris-based CAC 40, astonishingly all finished down to the same extent: a mere 0.01 percent.
“June’s CPI numbers looked scary, but once again, we see that it was mainly temporary price increases that pumped up the figures,” Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia told Reuters Thomson Tuesday.
“Overall, this report is consistent with inflation cooling off later this year.”
The Dow Jones industrials shed 107.13 points or 0.31 percent, to close Tuesday at 34,889.05.
The Standard and Poor’s 500 dropped 15.31 points or 0.35 percent to 4,369.32.
The tech-laden Nasdaq Composite let go 55.59 poin ts or 0.38 percent to 14,677.65.
The CPI data, pointing to an upturn in inflation, ignited buying demand for the greenback on Tuesday. The euro tumbled to 1.1780 approaching the New close. The British pound slumped to 1.3814. The Japanese yen eased to 110.59. The Swiss franc fell to 0.9185.
The Canadian dollar declined to 1.2517. The Australian and New Zealand dollars decelerated sharply to 0.7447 and 0.6945 respectively.
On Asian equity markets, the Australian All Ordinaries index finished ahead 7.30 points or 0.10 percent at 7,612.20.
In Tokyo, the Nikkei 225 advanced 149.22 points or 0.52 percent to 28,718.24.
China’s Shanghai Composite gained 18.61 points or 0.53 percent to 3,566.52.
In Hong Kong, the Hang Seng accelerated 448.17 points or 1.63 percent to 27,963.41.