Stocks Mixed After Inflation Data

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U.S. Stocks Mixed After Inflation Data, Rise in Housing Starts

Wall Street was little changed early Tuesday, after a rise in home construction and a mild reading on consumer inflation encouraged investors, but a falling dollar and industrial output limited buying.

Investors were also cautious about surging higher ahead of a new batch of first-quarter earnings data, and after a more than 100-point advance in the Dow Jones industrial average Monday.

The Federal Reserve reported Tuesday that industrial output dropped 0.2 percent in March as utility production dropped by 7 percent, offsetting a rise in factory production.

Investors were heartened by the Commerce Department's report that housing starts for March rose 0.8 percent, a feeble rise compared to February's 7.6 percent advance, but much better than the drop that investors had been bracing for. Building permits also rose. The stock market has experienced several tumultuous weeks this year due to worries about the financial troubles of the subprime lending sector spilling into the already sluggish housing market.

Giving investors some additional relief, the Labor Department reported that its core consumer price index rose 0.1 percent in March, less than expected and alleviating some anxiety about the Federal Reserve's need to raising interest rates to curb rising costs. The overall consumer price index, which takes into account energy and food costs, rose 0.6 percent in March -- its largest rise in 11 months, but in line with expectations.

Along with economic data, investors were watching for first-quarter results from various companies, notably technology heavyweights Intold Corp. and International Business Machines Corp.

Bonds rose after the economic data was released, with the yield on
the benchmark 10-year Treasury note falling to 4.69 percent from 4.74 percent.

Gold prices slipped. The dollar neared all-time lows versus the euro, and dropped to a 15-year low against the British pound. The dollar's weakness has been raising concerns about U.S. assets losing their allure to investors abroad.

Nearly half the component companies of the Dow Jones industrial average release earnings this
week. Analysts expect the reports to show corporate growth is slowing, but on Monday, many
companies' financial results surpassed the forecasts.