U.S. Stocks Move To The Downside After Seeing Initial Strength

After an initial move to the upside, stocks have given back ground over the course of morning trading on Thursday. The major averages have pulled back well off their highs of the session and into negative territory.

Currently, the major averages are off their worst levels of the day but still in the red. The Dow is down 131.44 points or 0.4 percent at 37,564.29, the Nasdaq is down 50.95 points or 0.3 percent at 14,918.70 and the S&P 500 is down 16.40 points or 0.3 percent at 4,767.05.

The downturn on Wall Street comes as traders digest the Labor Department’s highly anticipated report on consumer price inflation in December, which showed prices rose by slightly more than expected.

The Labor Department said its consumer price index climbed by 0.3 percent in December after inching up by 0.1 percent in November. Economists had expected consumer prices to rise by 0.2 percent.

Excluding food and energy prices, core consumer prices still rose by 0.3 percent in December, matching the increase seen in November as well as economist estimates.

The report also showed the annual rate of consumer price growth accelerated to 3.4 percent in December from 3.1 percent in November. The annual rate of growth was expected to tick up to 3.2 percent.

Meanwhile, the annual rate of growth by core consumer prices slowed to 3.9 percent in December from 4.0 percent in November. Economists had expected the pace of core price growth to decelerate to 3.8 percent.

A number of economists have said the data makes the Federal Reserve less likely to cut interest rates in March, with many predicting the central bank will hold off until its May meeting.

“In the wake of the Federal Reserve’s dovish shift in December, financial markets had moved to price an interest rate cut as soon as March,” said ING Chief International Economist James Knightley.

“However, the tight jobs market and today’s firmer-than-expected inflation numbers suggest this is unlikely, barring an economic or financial system shock,” he…