PPI Blowout–Here’s The Trader Talk

Stocks are lower Tuesday on
inflation concerns.

October PPI rose +1.7%, well above expectations of +0.5% and the largest gain since January 1990;
ex food/energy, +0.3%. Trader talk: Can producers raise prices and pass on
higher costs to consumers?

Wal-Mart
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was in-line and raised the forecast for the full year;
sales, however, were less than expected. Retail stocks are generally lower.
Traders are wondering if all the gains are priced in these stocks? The market is
forward-looking, and last Spring’s numbers were phenomenal, which makes for
makes for tough comparisons year/year.

Citigroup
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and financial stocks in
general are lower on higher interest rate concerns.

Google
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is down 5% as 39.1 million shares become unlocked and available for
sale today.

Pfizer is pulling the Pfizer “wild thing” ads. Merck
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is trading up 2% after recent losses.

On this day in 1914 the Federal Reserve opened.

Dow -51.14 10499.10
S&P 500 -6.77 1177.04
Nasdaq -15.59 2078.50

Strong sectors are: Gold
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+1.51%, Oil Services
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+0.94%.

Weak sectors are:
Airlines

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-1.82%, Internet  
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-1.81%,
Retail
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-1.35%.

The dollar is -0.26 at
83.74

Gold is +3.60 at 440

Crude Oil is -0.15 at 46.80

ce=”Arial” size=”2″ face=”Arial”>Volume is 615 million on the NYSE and
926 million on the Nasdaq.

Market breadth is negative.

NYSE Issues
Advancing 1218 Up Vol 171
Declining 1965 Down Vol 389
Ratio 1.61 2.27
Nasdaq
Advancing 1004 Up Vol 344
Declining 1910 Down Vol 527
Ratio 1.90 1.53

Stocks in the News

Home Depot
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beat and raised guidance. Q3 profits rose 15%.

JC Penney
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beat by a penny. The company reported 0.50 vs. 
0.27 a year ago.

Staples
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beat by a penny; profits rose 25%.

BJ’s Wholesale
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beat by 0.02.

Electronic Data
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reported a larger loss, but beat expectations

Fannie Mae
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warned of a possible $9 billion loss.

Tobacco stocks (MO, RJR, CG, BTI) will be in focus as Britain considers a
smoking ban in most enclosed areas.

Brice Wightman