Stocks retreat with dollar as crops lead advance in commodities

Economy Watch

The consumer-price index in the U.S. increased 0.5% after a 0.1% gain the prior month, Labor Department figures showed today. The median forecast in a Bloomberg survey called for a 0.3% rise. The biggest advance in gasoline prices in four months accounted for about two-thirds of the gain in the CPI. The core measure, which excludes food and fuel, rose 0.2%, matching the May gain and the survey median.

Another report from the Fed showed output at factories, mines and utilities climbed 0.3%, the biggest advance since February, after being little changed in May. The gain matched the median forecast of 86 economists in a survey. Manufacturing, which makes up 75% of total output, increased more than projected.

The Stoxx 600 erased an earlier advance of 0.1% as travel, media and telecommunications shares helped lead losses. Telecom Italia SpA slid 3.4% to a 16-year low in Milan after putting a plan to spin off its fixed-line assets on hold.

German Confidence

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to 36.3 from 38.5 in June. That’s the first decline in three months. Economists forecast a gain to 40, according to the median of 37 estimates in a Bloomberg News survey.

The MSCI Emerging Markets Index was little changed after five consecutive gains. India’s Sensex index slid 0.9% while the rupee jumped 1%, helping to lead gains in developing-nation currencies, after the central bank raised two interest rates. The Shanghai Composite Index added 0.3% and Russia’s Micex Index advanced 0.5%.

The dollar declined 0.7% to 99.18 yen. The U.S. currency slid 0.7% to $1.3149 per euro.

Australia’s dollar climbed against all 16 of its major peers as investors pared bets the Reserve Bank will cut borrowing costs after the minutes of its most recent meeting were released today.

Cocoa, soybeans and coffee rose at least 1.8% to lead gains in 17 of the 24 commodities tracked by the S&P GSCI.

Copper climbed 1.2% to $6,998 a metric ton, the first gain in three days. West Texas Intermediate crude oil was little changed around $106 a barrel.

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