Two economic reports released at 8:30 AM sent mixed mixed signals on the state of the U.S. economy. Prices to U.S. producers declined 0.6% in January following an increase of 0.9% the previous month signaling inflationary pressures may indeed be "beginning to diminish" as Fed Chairman Ben Bernanke told Congress this week. The core rate, which doesn't include food and energy costs, rose 0.2% for the second straight month. Still, lower energy prices are likely to offset the likelihood producers will inflate the prices for their goods. The figures were line with average estimates gathered from economists by both Bloomberg and MarketWatch. Meanwhile, January housing starts dropped 14.3% to a seasonally adjusted annual rate of 1.408 million - their lowest rate in a decade. Housing starts were down 37.8% versus the prior year period. The drop in housing starts was much worse than expected; economists were looking for a 2% drop to 1.60 million annualized units. Home builders likely scaled back new projects as they attempt to rectify the existing high housing inventory.
• Sources: Bloomberg, MarketWatch (i), (ii)
• Commentary: Existing Home Sales Sink Across Nation • Slew of Economic Reports Reveal Mixed Economic Health • Bernanke Calms Investors
• Stocks and ETFs to watch: S&P 500 Index (SPY), Diamonds Trust Series 1 ETF (DIA), iShares Lehman Aggregate Bond (AGG), streetTRACKS SPDR Homebuilders ETF (XHB), iShares Dow Jones US Home Construction (ITB)
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