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Inflation data may give stocks whiplash
Sun May 14, 2006 11:25am ET

http://today.reuters.com/news/newsarticle.aspx?type=businessNews&storyid=2006-05-14T152508Z_01_N...

By Caroline Valetkevitch

NEW YORK (Reuters) - Fasten your seat belts.

Stock investors could be in for a bumpy ride this week with widely watched inflation gauges likely to dictate the market's direction.

Worries about inflation and rising interest rates drove stocks down sharply late last week as gold hit a 26-year high and the Fed failed to give Wall Street a clear signal that it was ready to pause after nearly two years of raising rates.


Any signs of further price pressures on the economy in this week's data on consumer and producer prices could give investors more reason to sell.

"Investors are just going to be very sensitive to any type of overheating of the economy," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Wealth Management in New York. "Any pickup on any inflation numbers will be magnified."

The U.S. Producer Price Index for April, expected at 8:30 a.m. (1230 GMT) on Tuesday, and the Consumer Price Index, scheduled for release at the same time on Wednesday, will be among this week's most important economic indicators.....