Inflation Data Spooks The Market

The market is opening under a bit of selling pressure, after a pretty strong inflation report. The year/year PPI rate hit 2.0%, for the first time since Sep. 2005. But this data is volatile, and could easily reverse direction next month.

Oil is trading lower once again, breaking below the $51 level. T. Boone Pickens was on CNBC and said that while the depth of the recent decline surprised him (his fund is down -6%), he thinks we are at the bottom.

The energy stocks are trading higher, not surprising given how oversold many of them are. The 10-year yield is flat at 4.75%.

RACK is down a whopping -35% after warning that Q4 earnings would be below expectations. That is quite a haircut. The last time this happened, last summer, the stock later enjoyed a 100% bounce off its bottom.

INTC reported solid earnings, but offered tepid gross margin guidance. This, couple with some profit taking, has the stock lower this morning to the tune of -4%.

In other news and notes:

• Asian markets rise overnight
• HANS featured on Barron's Online
• LEN guides FY07 EPS above consensus
• WIT beats EPS by 2 cents; revs +46%
• Goldman upgrades PG to Buy
• Amtech starts NVT at Buy ($44 tgt)
• HMA announces special $10 dividend
• Wedbush raises CROX target to $55

long GS, INTC, PG