Consumer prices were flat in July for a second straight month and the year-over-year increase was the smallest since November 2010, giving the Federal Reserve room for further monetary stimulus to tackle stubbornly high unemployment.
Economists polled by Reuters had expected the Consumer Price Index to rise 0.2 percent last month. In the 12 months to July the CPI rose 1.4 percent, slowing from June’s 1.7 percent rise, the Labor Department said on Wednesday.
Stripping out food and energy, inflation pressures were also tame. Core CPI rose 0.1 percent, the smallest increase since February, and breaking four consecutive months of 0.2 percent increases.
The New York Fed’s “Empire State” general business conditions index dropped to minus 5.85 from 7.39 in July, missing expectations for 6.5.
New orders worsened to minus 5.50, the lowest since September, from minus 2.69. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.
Employment gauges were mixed. The index for the number of employees slipped to 16.47 from 18.52 while the average employee workweek index nudged up to 3.53 from zero.
The index of business conditions six months ahead fell to 15.20 from 20.20.
Data expected later in the session include industrial production and capacity utilization for July at 9:15 a.m. ET (1315 GMT) and the National Association of Home Builders/Wells Fargo August housing market index at 10:00 a.m. ET (1400 GMT).
Economists in a Reuters survey expect a 0.5 percent rise in production and a reading of 79.2 percent for capacity utilization. The housing market index is expected to show a 35 reading, identical to July.
Gainers
Shares of Physicians Formula Holdings Inc. FACE +0.82% rallied 12.8% in premarket trades as the Azusa, Calif.-based company agreed to be acquired for $4.25 a share in cash by Swander Pace Capital in a deal valued at $65 million. The price is 15% above the skin-care firm’s closing level Tuesday. .
Security National Financial SNFCA +3.17% shares rose 10%. The company reported second-quarter results after the close on Tuesday.
U.S.-listed shares of VimpelCom Ltd. VIP +1.08% rose 5.5%. Earlier, the Russian telecommunications carrier said second-quarter net profit was $488 million, compared with $267 million a year earlier.
Decliners
Canadian Solar Inc. CSIQ +0.33% shares fell 11%. The company earlier Wednesday posted a second-quarter loss and said that lower selling prices hurt despite higher sales volumes for it solar equipment and panels.
Deere & Co. DE -4.91% shares fell 5.5%. Deere reported an 11% increase in third-quarter earnings to a record $788 million, or $1.98 a share, from $712.3 million, or $1.69 a share, in the year earlier period. Quarterly revenue increased 15% to $9.59 billion. Analysts surveyed by FactSet Research had, on average, expected earnings of $2.31 a share on revenue of $9.614 billion.
Kit Digital KITD -3.54% shares fell 6.7%. The on-demand software firm reported late Tuesday a second-quarter loss that widened to $151.1 million, or $2.94 a share, from $19.8 million, or 49 cents a share, in the same period a year ago.
Staples Inc. SPLS -15.65% shares fell 13% after the office-supplies retailer posted second-quarter results. Earnings fell 32% from the year-earlier period bolstered by a tax refund as a big drop in international sales contributed to a larger-than-expected sales decline. The company also lowered its full-year forecast, saying it now expects sales to be flat with the prior year and per-share earnings to increase at a percentage rate in the low single-digits.