Stock futures negative after manufacturing, CPI data

The inflation index is unchanged in July. The core number is up less than expected. The Empire state general business conditions gauge weakens to below zero. Investors await Cisco’s quarterly results.

By TheStreet Staff Aug 15, 2012 9:10AM
Updated at 9:10 a.m. ET

By Andrea Tse

U.S. stock futures fell further Wednesday after lower-than-expected manufacturing sector and inflation figures.


Futures for the Dow Jones Industrial Average ($INDU) were down by 20 points at 13,113. S&P 500 ($INX) futures were down by 1.79 points at 1,399. Futures for the Nasdaq ($COMPX) 100 were falling by 1.75 points to 2,725.


The major U.S. equity averages finished mixed Tuesday as a stronger-than-expected rebound in retail sales in July failed to fuel substantial buying.


The Labor Department reported before the markets open that the consumer price index was unchanged in July versus being unchanged in June. The core number, excluding the food and energy items, rose 0.1% after being up 0.2% in June.  Economists surveyed by Reuters expected the headline CPI to rise 0.2% in July and the core number to stay at 0.2%.


At the same time, the New York Fed’s Empire state survey showed that the general business conditions index weakened to negative 5.85 in August from 7.39 July.


“From a market standpoint, today’s data works in favor of those believing the Fed is more likely to ease policy in coming months,” said Dan Greenhaus, chief global strategist at BTIG.  “Core prices appear to have topped out for now while headline prices have been pushing lower since the middle of 2011.  The FOMC will not like that very much.”


“The Empire Manufacturing survey is our first look at the manufacturing sector each month and in August, our first look was not good,” he added.  “The report isn’t entirely negative per se but it’s certainly broadly negative.” 


The Federal Reserve is predicted to say at 9:15 a.m. that industrial production rose 0.5% in July after gaining 0.4% in June. Capacity utilization is expected to have risen to 79.2% after increasing to 78.9% the month before.


At 10 a.m., the National Association of Home Builders is forecast to say that the housing market index stayed at 35 in August.


September crude oil futures were off 28 cents at $93.15 a barrel and December gold futures were down $5.90 at $1,596.50 an ounce.

The benchmark 10-year Treasury was slipping 6/32, raising the yield to 1.761%. The greenback was up 0.23%, according to the dollar index.


The FTSE in London was off 0.41% and the DAX in Germany was shedding 0.48%.


The Hong Kong Hang Seng index closed lower by 1.18% and the Nikkei in Japan finished down 0.05%.


In corporate news,  Cisco (CSCO) is expected to report fiscal fourth-quarter results after Wednesday's closing bell and analysts are calling for the networking equipment giant and Dow component to post earnings of 45 cents a share on revenue of $11.6 billion.


TheStreet will be live-blogging Cisco's results Wednesday at 3:45 p.m. EDT.


Warren Buffett's Berkshire Hathaway (BRK.A) revealed in a 13-F filing it sold a stake in Intel (INTC), added to positions Wells Fargo (WFC) and  Bank of New York Mellon (BNY) and sold off significant portions of positions in United Parcel Service (UPS) and Visa (V).


Berkshire Hathaway also bought shares of Phillips 66 (PSX) and National Oilwell Varco (NOV) in the second quarter.


Standard Chartered shares were rising in London after it agreed Tuesday to pay $340 million to New York's Department of Financial Services to settle accusations the U.K. bank hid illegal transactions with Iran and violated U.S. sanctions law.


New York Times (NYT) named Mark Thompson as its next president and CEO. Thompson most recently served as director general of the British Broadcasting Corp.


More from

Aug 15, 2012 10:08AM
The Stock Market is not the end-all to be-all indicator on how our economy is doing. If it were, the GW years would have meant that he was an economic (economy) rock star because the DOW got above 14,000 on his watch. The Market has billions of dollars automatically flowing into it from pension funds, mutual funds, money market accounts, ETF,  the FED, etc... The Market is inflated. Investors all around the world have no other "safe" place to go with their money. Hence, it is not a good barometer - - it will go up and it will go down. Nonetheless, when it becomes apparent that Romney and Ryan will win in November, I expect to see the DOW to SOAR... I expect to see the signs that America is open for business again (and are welcomed to the table) and to see umemployment down to 7% by next summer.
Aug 15, 2012 12:36PM
See, that's just it.... I "understand" both POV's, see facts and figures behind both POV's, and in spite of what you may think, take from those like yourself that comment on both sides to help establish my personal position.  I am not your typical lock step, Republican Conservative.  I see the need for tax increases, not letting religions beliefs dictate government policies, am for legalizing drugs, stuff like that....

And YOU are a big part of that!!!!

3 Cheers for you, Big Guy.....

Aug 15, 2012 11:22AM
LOM.... VF,

Read this:

This is why I keep harping on old arguments.  Cuz other people a whole lot more smarter than I seem to differ with the Gospel of VF (that's a direct shot at your "VF continues to refute your core thesis" shot, BTW).

It is possible that you, or God forbid VF is wrong.  The results of our economy sure seem to think so......

I know it's long, but read it when you get a chance and let me know what you think.

Aug 15, 2012 12:18PM
Instead of engaging you with a follow up response to your points, I'll pull back to my original post and state again that people way smarter than I came up with this, and I wanted to make sure you had a chance to see it.  If for no other reason than to point out once again that others in the economic community that are not wanna bes or wackos do have a differing opinion than you.

I often feel the need to point that out.  Thanks for taking the time.

Aug 15, 2012 10:45AM
Today's opening not a whole lot different than yesterday's....We saw buying and then at about 1014 hrs manipulators called for the first wave of selling....Volume is once again low and scumbags are trying to take over things early...We should be in the red anytime now....Oh well, not a big shock...Still very early, we'll see what can be done...More laer.
Aug 16, 2012 7:22AM
C'mon, Gooch, you should know by now that results don't matter to progressives.  Look at the "war on poverty", we've spent tens of trillions and we now have more poor people than ever before.  Same thing with education - we're spending more per student than ever before and our kids are dumber than ever.  But that doesn't seem to stop progressives from arguing for even more welfare or education spending.  We have decades of deplorable "unintended consequences" and miserable failures as evidence that more gov spending makes things worse, not better, and yet half the country seems to think progressives still have a legitimate argument.
Aug 15, 2012 7:25PM
We were able to hang in there...Flat is good, like we always say....They tried to bring us down, don't have any doubts about that...Oh well....Lets see what tomorrow brings us.
Aug 15, 2012 12:45PM
So.... even in the presence of some evidence that does not fit with your position, it's only "your way or the highway?"

I thought Righty's were supposedly the stubborn, arrogant ones?

Surely you are not discounting the possibility that you might be wrong about something...... are you???

Aug 15, 2012 11:39AM
I will check it out after Farmers Mkt here. 
Mrs LOM believes in fresh veggies, fruits and local products
like honey, blackberry preserves and walnuts, etc.  Can you
blame her?

Before I go, however, you have the idea wrong, the idea
of VF having a "gospel" or an entourage.  If you have not
noticed he is not exactly the most popular voice on the forum,
given the amount of thumbs down.  Thumbs down, IMO, is
stupid, since I like it when opposing POVs actually respond
in writing.

Anyway, I digress- VF only presents a flexible fix to what ails
the economic cycles.  He has always said, during the down
turn one needs to flood the system with liquidity.  Doing so
this time has not only mitigated what might have been a
very rough ride, but is textbook for the occasion. And on the
other hand, he has always advocated for doing the opposite
when the cycle is 'up'.  Then, we draw in liquidity, gradually
tightening money so as to inhibit hyperinflation.  With this
I simply agree. 

Allegorically its like saying "when there's drought, use more
water" and " when its raining, turn the spigot off" - Thats all.

We both do not agree on everything but on this point we most
assuredly converge.  The economy is the most vital link in
our nations forward path.  That we deliver the most that can
be rightfully earned to those that we can is not only valuable
from the fiscal POV but the moral one. Those that labor
deserve more than they have been getting lately.  Those
that cannot deserve our deepest charity.  Those who pick
the best fruits and reserve them selfishly are the ones
getting away with 'murder' and then have the gall to turn
around and tell the workers to blame the ones who cannot
produce for our collective torment.  This is where I fault the
Rs, my friend.

Must head out...Will return to this column later in the after
noon.  Thanks for the link - it will be reviewed with my usual
'open mind', sir. 

Also as usual, my regards to you and your family.  ~LOM

Aug 15, 2012 12:49PM
We are hugging the flat line...Not bad...Scumbags selling on any rally attempted to bring the Dow back in the green...Oh well, over 3 hours to go, all is possible; manipulators wll not go away, you can bet on that. We will not see Dow 15,000 until President Romney takes over, bet on that one too.
Aug 16, 2012 8:00AM
Yeah, hard to quit, maybe because there are those rare occasions when they get backed so far into a corner and say some pretty funny (and revealing) stuff - like "Everyone who doesn't agree with me is an idiot", or "There is no limit on the amount the gov should borrow and spend to avoid a double dip" - priceless!
Aug 16, 2012 5:07AM
"I should point out that this is the case with just about the entire body of Austrian Economics.. no evidence, only logic which doesn't meet reality."

You mean like this:

"He has always said, during the down
turn one needs to flood the system with liquidity.  Doing so
this time has not only mitigated what might have been a
very rough ride, but is textbook for the occasion. And on the
other hand, he has always advocated for doing the opposite
when the cycle is 'up'.  Then, we draw in liquidity, gradually
tightening money so as to inhibit hyperinflation.  With this
I simply agree."

There is ZERO precedent where America has ever done this either.  So at best, it seems that we are both coming to the table with made up, never before been implemented in real life theories, with neither side able to disprove the other with anything more than personal bias and opinion.

Just too bad for you (in my opinion) that we have recent American history not standing up to your theories.  I would think that if you were right we would have seen different results by now......
Aug 15, 2012 3:31PM
At 1525 hrs scumbags started to accelerate the selling...Will be an interesting last 30 minutes....More after the close.
Aug 15, 2012 11:55AM

Divine you are bringing that same ol' shidt about Bush and the Markets over here too...


If you say or type it enough...Sooner or later you might have some takers,AND you will believe it too.


When Obama, DOES get re-elected...The Conservatives Repubs will finally give it up...Throw in the hat and start spending or investing again...SO THEY CAN HAVE WRITE-OFFS, because of the the tax structure take backs that are going to hit them....Maybe even Mirage??


Yeah, "then the Markets will soar." 

Aug 15, 2012 12:13PM
Tog:  I know.. And even companies that are already held don't want to put out additional stock as it dilutes the ownership of each share.  Companies borrow until the debt costs are too high, then look for equity funding.
Owners that want to be owners should want to retain ownership as much as they can.  Diluting that without a serious expected gain is really stupid.

Aug 16, 2012 12:17PM

Just wanted to hop in here to say Hi to Brutus and 2 Sick... as I hadn't seen you boys in a while... but it appears I've stumbled into a lovefest of you two agreeing with each other...




*closes the door as he leaves*

Aug 16, 2012 10:03AM
New day, same old thing down here....Low volume and manipulators not letting this market climb...Jobless claims of course didn't help but that was expected and the Philly Fed index was also crappy....Oh well, we will see how things develop...More later.
Aug 16, 2012 8:17AM
Talk about priceless.... this line is my fav: "I should point out that this is the case with just about the entire body of Austrian Economics.. no evidence, only logic which doesn't meet reality."

OMG!!!  And from VF of all people, too!!!

Aug 16, 2012 7:49AM
We are just not spending enough.....

You would think I would learn, but for some reason I continue to enjoy revisiting the discussion.  I just can't get enough of the "site some facts, draw some conclusions, ignore the results." mentality.  It's the kind of entertainment value that I just can't seem to find anywhere else!

Aug 15, 2012 9:22AM
So much for Benjamin Lawsky.  Looks like he's just another "protect the chosen one's" regulator.

Down the drain we go.....
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[BRIEFING.COM] The stock market finished the Tuesday session on the defensive after spending the entire day in a steady retreat. The S&P 500 (-0.6%) posted its third consecutive decline, while the small-cap Russell 2000 (-0.9%) slipped behind the broader market during afternoon action.

Equity indices were pressured from the start following some overnight developments that weighed on sentiment. The market tried to overcome the early weakness, but could not stage a sustained rebound, ... More


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