Wall Street stocks retreat from records on US inflation data ~ EconomyLens.com

New York (AFP) – Shares slipped in New York and Europe Thursday as the latest US inflation report dented the odds of rapid interest rate cuts, while crude prices jumped on worries over the Middle East. All three major US Wall Street indexes finished the session modestly lower after the Dow and the S&P 500 had chalked up all-time highs Wednesday. In Europe, Paris, Frankfurt, and London all closed slightly lower.

Earlier in the day, Chinese stock markets rebounded somewhat after China’s central bank took action to boost purchases of company shares. As measured by the consumer price index, US annual inflation slowed to 2.4 percent in September from 2.5 percent in August, the government reported. But a core measure of inflation that strips out volatile food and energy costs rose to 3.3 percent from 3.2 percent in August. Both inflation figures were higher than what analysts had expected, and combined with a strong US jobs report last week, they weakened the case for the US Federal Reserve to aggressively cut lending rates.

“The latest CPI figures are hardly a disaster, but after a far stronger-than-expected jobs report last week, many are questioning the Fed’s decision to cut by 50 basis points last month,” said Bret Kenwell, analyst at eToro. “The two reports have all but taken another 50 basis point cut off the table next month, while some could argue that it rules out a rate cut of any kind in November.”

Earlier in the day, Shanghai’s stock market closed 1.3 percent higher, and Hong Kong rose 3.0 percent. Hong Kong and mainland markets whipsawed this week as the euphoria over China’s recent moves to boost its economy was dampened by a news conference at which officials failed to unveil more measures or give details on those already announced. On Thursday, however, investors welcomed news that the People’s Bank of China had released details of a “swap facility” that will allow “qualified securities, funds and insurance companies” to access more than $70 billion in liquidity to purchase equities.

Oil prices jumped more than three percent after Israel’s defense minister pledged that his country will strike Iran in retaliation for last week’s missile attack. Among individual companies, Delta Air Lines dropped 1.1 percent as the carrier disclosed a $380 million hit from an information technology outage during the quarter that led to thousands of flight cancellations. Tesla shed 1.0 percent ahead of a much-hyped event in which CEO Elon Musk will update the company’s plans for robotaxis. Briefing.com said the initiative faces “roadblocks,” which also could put pressure on profit margins.

– Key figures around 2040 GMT –

New York – Dow: DOWN 0.1 percent at 42,454.12 (close)

New York – S&P 500: DOWN 0.2 percent at 5,780.05 (close)

New York – Nasdaq Composite: DOWN 0.1 percent at 18,282.05 (close)

London – FTSE 100: DOWN 0.1 percent at 8,237.73 (close)

Paris – CAC 40: DOWN 0.2 percent at 7,541.59 (close)

Frankfurt – DAX: DOWN 0.2 percent at 19,210.90 (close)

Tokyo – Nikkei 225: UP 0.3 percent at 39,380.89 (close)

Shanghai – Composite: UP 1.3 percent at 3,301.93 (close)

Hong Kong – Hang Seng Index: UP 3.0 percent at 21,251.98 (close)

Brent North Sea Crude: UP 3.7 percent at $79.40 per barrel

West Texas Intermediate: UP 3.6 percent at $75.85 per barrel