After closing yesterday at a five-year high, the Dow Jones Industrial Average is having some mood swings this morning. The index waffled between rises and falls before peaking at 14,058 around 10:20 a.m. ET -- only to fall sharply at 11 a.m. Investors may be cautious following yesterday's close, with the all-time record being just 100-plus points away.
News from Europe this morning was relatively flat, as the markets in the EU proceeded with caution after yesterday's good performance. The Producer Price Index numbers were released this morning, with a 0.2% rise in January following a 0.3% fall in December. Rising food prices were the main driver of last month's increase, offsetting weak gas prices.
Housing starts slowed in January, falling 8.5% after a 15.7% improvement in December. Though analysts were disappointed by the decline in housing starts after expecting a continued climb higher as the housing market regains steam, permits continue to rise. Up 1.8% from December, permits are now at the highest level since 2008. And though apartment construction slowed 24%, single-family home construction actually rose 0.8% in January.
The last of today's economic news releases will be a big one: the latest meeting minutes of the Federal Reserve Open Market Committee at 2 p.m. ET. Investors will scour the minutes to determine how current stimulus programs will move forward. Don't be surprised if there are some big movements between that release and the closing bell.
Only 12 of the Dow's components are up at the time of this writing. And leading the way is Boeing on the news that the aircraft manufacturer is closer to solving the battery issue in its 787 Dreamliner. Spec reviews have shown that the lithium-ion battery cells are too close together, causing the battery to overheat -- and in some instances catch fire. Other sources in Japan have identified faulty wiring that may also be a cause of the issues. New remedies for the battery are being put into place so the Dreamliner fleet can be returned to service.
Caterpillar is leading the way in the opposite direction following news that the retail sales of its construction and mining machines fell during the past three months. With U.S. sales down 11% and Asian sales down 12%, it was no surprise that the overall sales fell 4% for the company. Though Caterpillar believes that sales will regain momentum in the coming months as the global economy continues to recover, investors are not impressed.
Elsewhere, Apple shares fell 2% so far today following Foxconn Technology Group's announcement that it would be freezing its hiring of assembly-line workers. Foxconn is the largest assembler of Apple products, indicating that sales of the tech gadgets may be slowing.
Finally, the herbal supplement company Herbalife exceeded analyst expectations with its earnings release last night, though its results have not propelled it higher today, as the stock has stayed relatively flat. Investors should expect to see further quarreling words between Carl Icahn and Bill Ackman. The company's earnings release and conference call may give investors a better look at whether Ackman's accusations of the company being a pyramid scheme have any clout.
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