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Wall Street drops on inflation fears, GE outlook
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US stocks fell on Tuesday, with the Dow and S&P 500 easing off 14-month highs, as a climb in producer prices raised inflation concerns and economic bellwether General Electric issued a flat outlook for 2010. For more details, here is Bobbi Rebell from Reuters.
Boeing's dreamliner has finally taken flight. The new lightweight carbon and titanium plane had its first flight after nearly two years of delays. Boeing says the mid size plane will save airlines millions of dollars in fuel and maintenance costs.
General Electric says it expects profits and revenues to be flat in 2010. But the company also said the worst is behind it in its financial services business.
Inflation fears were on the rise after a report showed inflation at the wholesale level was up higher than expected. Hardest hit: Gasoline and energy prices. Also getting noticed- food prices were up more than expected. A separate report showed industrial production came in higher than expectations.
It was the first day of the Fed's two day meeting on interest rates. No rate change is expected but investors will be disecting the Fed's policy statement on Wednesday for any changes in tone.
US stock markets were lower ahead of that statement but analysts say they remain resilient.
Steve Wood is chief market strategist at Russell Investments.
Steve Wood, Chief Market Strategist, Russell Investments, said, "The momentum appears to be strongly towards the upside. It has been since early summer so I think right now its just daily volatility and I think a lot of the market movement was to be expected given the information."
Top electronics retailer Best Buy is selling more discounted goods this holiday season. The company says that's hurting profit margins. Analysts say the entire electronics sector is being hurt by a lack of hot new gadgets that would get consumers to pay full price. Shares of Best Buy closed lower.
Wells Fargo is getting close to repaying its government bailout money. The bank sold about $10 billion in stock to help repay its $25 billion in TARP money.
At the end of Tuesday's session The Dow and the Nasdaq had both given up ground
Over in Europe gains in defensive stocks offset declines in banks. The major indexes closed mixed.
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