NEW YORK, March 14 (Xinhua) -- The U.S. stocks ended lower on Thursday, after the release of U.S. producer price index (PPI) data that exceeded expectations, leading to an increase in the U.S. Treasury yields.
The Dow Jones Industrial Average fell by 137.66 points, or 0.35 percent, to 38,905.66. The S&P 500 sank 14.83 points, or 0.29 percent, to 5,150.48. The Nasdaq Composite Index shed 49.24 points, or 0.30 percent, to 16,128.53.
Nine of the 11 primary S&P 500 sectors ended in red, with real estate and utilities leading the laggards by losing 1.61 percent and 0.81 percent, respectively. Meanwhile, energy and communication services led the gainers by rising 1.10 percent and 0.55 percent, respectively.
In February, the PPI, which gauges wholesale inflation, rose by 0.6 percent. When excluding food and energy prices, the core PPI increased by 0.3 percent during the same period. Economists surveyed by Dow Jones had anticipated a 0.3 percent rise in the headline PPI and a 0.2 percent uptick in the core reading.
Initially, stocks showed resilience after the report, but later lost momentum shortly after the market opened.
The hot inflation report sent bond yields higher, with the benchmark 10-year Treasury adding 10.6 basis points to 4.3 percent.
"The questions now are, will traders rethink how soon the Fed will cut rates, and will that slow down the stock market rally in any meaningful way?" said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.
Retail sales at stores, online, and in restaurants increased by 0.6 percent in February compared to the previous month, rebounding from a decline of 1.1 percent in January, as reported by the Commerce Department also on Thursday. This growth slightly undershot economists' forecasts.
The probability of the Federal Reserve implementing a rate cut in June declined to 61.3 percent on Thursday down from 65.2 percent on Wednesday, according to the CME FedWatch tool. The lower expectation for a rate cut indicates the market's hawkish reaction to recent economic indicators.
The upcoming Federal Reserve policy meeting next week is eagerly awaited, as it could provide signals regarding the timing of rate adjustments. ■
