The Dow Jones Industrial Average gave back an early advance and traded slightly lower Thursday even as a cooler-than-expected wholesale inflation report lifted the S&P 500 and Nasdaq. Cisco Systems dragged on sentiment, dropping more than 7% despite beating earnings estimates.
Dow lags as other indexes climb on inflation data
The Dow industrials edged 0.1% lower in morning action, backing off an early gain of 0.5% and an intraday high of 54,049. The blue-chip index lagged the broader market, trailing a 0.6% gain in the S&P 500 and a 0.8% gain in the Nasdaq composite.
Thursday's producer price index came in unchanged for July, with a 4.7% year-over-year increase, cooler than economists had forecast. Core inflation, which excludes food and energy, rose 0.2% on the month against expectations for 0.3%, though its 4.2% annual pace matched estimates. Economists surveyed by Econoday had projected the headline PPI would rise 0.2% monthly with a 4.9% annual gain.
However, weekly initial jobless claims complicated the picture, rising to 209,000 versus 199,000 the prior week, more than the expected rise to 203,000. Still, the 10-year Treasury yield dropped nearly eight basis points to 4.61%, reflecting investor confidence that inflation might be moderating.
Cisco earnings weigh on the blue-chip index
Cisco Systems, a Dow component, tumbled more than 7% after its fiscal fourth-quarter results. The networking giant posted a 23% rise in earnings to $1.22 a share as sales climbed 18% to $17.3 billion, extending its streak of bottom-line growth to a seventh straight quarter. Even so, gross margin fell more than 200 basis points from a year earlier to 66.3%.
Elsewhere among Dow components, Salesforce rallied nearly 2% and Microsoft climbed close to 1% in early trading, while Chevron dropped 0.7% as oil prices fell. West Texas Intermediate crude oil futures fell nearly 4% to around $80.15 a barrel.
Source: Investor's Business Daily
Trading involves risk.
Risk Disclaimer
