1 Stock Trying to Spark a Flatlining Dow

The Dow Jones Industrial Average (DJINDICES: ^DJI  )  is relatively unchanged despite the three economic reports released this morning. As of 1:20 p.m. EST, the Dow and the S&P 500 (SNPINDEX: ^GSPC  ) are both down a fraction of a point.

There were three economic releases this morning.

Report

Period

Result

Previous

Retail sales

December

0.5%

0.4%

Retail sales excluding automobiles

December

0.3%

(0.1%)

Producer Price Index

December

(0.2%)

(0.8%)

Core PPI

December

0.1%

0.1%

Inventories

November

0.3%

0.3%

Source: MarketWatch U.S. Economic Calendar.

The first report was from the Department of Commerce, which reported that U.S. retail sales rose 0.5% in December. That's better than November's 0.4% rise and better than analyst expectations of a 0.2% rise. Excluding automobile sales, retail sales rose just 0.3% in December, compared with a 0.1% drop in November. That's still better than analyst expectations of 0.2% growth.

The second report was from the Department of Labor, which reported that the U.S. PPI fell 0.2% in December. That's a smaller drop than November's -0.8% but slightly greater than analyst expectations of -0.1%. Inflation for people who don't eat or use energy, also known as Core PPI, rose 0.1%. That's unchanged from last month and in line with analyst expectations. Many investors are seriously worried about inflation in the future, and while there are little signs of it now, it's something to be wary of.

The third report was another from the Department of Commerce saying that U.S. inventories rose a seasonally adjusted 0.3% in November. That's unchanged from October and in line with analyst expectations.

Today's Dow leader
Moving on to individual companies, today's Dow leader is Caterpillar (NYSE: CAT  ) up 0.85% on no real news. Caterpillar had a slightly volatile 2012 but finished the year down 3%. The question on many investors minds is whether Caterpillar can do better in 2013. Caterpillar is a cyclical stock whose results are largely dependent on the health of the economy. If the world economy improves, Caterpillars fortunes will improve with it. But with the coal and iron-ore industries suffering, Caterpillar's stock will likely remain stuck in neutral for the time being.

There are some things to like about Caterpillar. The company is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in our brand-new report. Just click here to access it now.


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