http://biz.yahoo.com/ap/070117/wall_street.html?.v=26Wednesday January 17, 12:50 pm ET
By Madlen Read, AP Business Writer
Stock Are Mixed After Larger Than Expected PPI Rekindles Inflation Worries
NEW YORK (AP) -- Wall Street struggled to advance Wednesday, lifted by strong earnings in the financial services sector but moving cautiously after a higher-than-expected producer price index reignited interest rate worries. Blue chips led the market, nudging the Dow Jones industrials past 12,600 for the first time.
The Labor Department said the PPI, an indicator of inflation, rose by 0.9 percent in December -- slower than in November, but faster than the market expected. The report raised the chance of the Federal Reserve resuming its rate-hiking campaign to curb inflation, a move that could crimp consumer spending.
The market has been erratic lately due to uncertainty about whether Americans' spending power will be helped by the Fed and falling energy prices, and whether the economy's moderation will take a toll on corporate earnings this year. On Wednesday, investors weighed another batch of earnings reports that showed strength in some sectors, like financial institutions, and weakness in others, including technology.
"We all know the economy is slowing, we just don't know how much. Earnings season is a great time to find out how much," said Kim Caughey, equity research analyst at Fort Pitt Capital Group in Pittsburgh.
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