What Do T-Bonds Say About Inflation?
The Producer Price index declined 0.7%. This decline in the producer price
index was larger than expected and reflected declining costs for energy, autos
and food. Prices paid to U.S. factories, farmers and other producers declined in
December for a third consecutive month.
Treasury bond yields fell as investors bet inflation is calm enough to allow
the Federal Reserve to keep the overnight bank lending rate near a 40-year low
of 1.75%. Cheaper goods may keep consumers buying even as companies like Weyerhaeuser
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have had trouble raising prices, which have made their profits suffer.
On the broader markets, trade activity
continues to be choppy. The Nasdaq
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to 2041.94. The S&P 500
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the Dow
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10069.11.
Ford Motor
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second-largest automaker — will cut 35,000 jobs, close five factories and
eliminate four models after its first annual loss in nine years. The automaker
reduced its dividend for the second time since October. Ford will take a fourth
quarter charge of $4.1 billion to pay for the cost-cutting program, which
includes factory closings in New Jersey, Missouri, Michigan, Ohio and Ontario.
The CEO said he will forgo his salary and only be paid in stock options. Ford
was halted at the market opening this morning, then gapped lower when it began
trading, and rallied upwards. On the daily chart, Ford has formed a triple
bottom. General Motors
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higher at their openings and have been trading in positive territory.
Rambus
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to $9.35 and traded as high as $9.58. The computer memory-chip designer earned 6
cents a share in the first quarter ended Dec. 31, 1 cent more than Rambus’
estimate.
K-Mart
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cents, or 18%, to $3.43 and traded as low as $3.40. Shares in the discount
retailer continue to fall on concern that the company lacks the funds to carry
out Chief Executive Chuck Conaway’s turnaround plans and fend off larger rival Wal-Mart
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Cree
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$5.70, or 19%, to $24.95 and traded as low as $24.02. The semiconductor maker
said it earned 8 cents a share, excluding certain costs, in the second quarter
ended Dec. 23. On that basis, which isn’t in accordance with generally accepted
accounting principles, it was expected to earn 9 cents.
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