Investing.com -- U.S. stocks were mixed on Tuesday as optimistic inflation data bolstered hawkish arguments for a December interest rate hike, offsetting gains in the retail sector following a wave of strong quarterly earnings from Wal-Mart (N:WMT), Home Depot (N:HD) and several other industry giants.
On Tuesday morning, the U.S. Department of Labor's Bureau of Labor Statistics said on Tuesday that its Consumer Price Index rose by 0.2% for the month of October, posting mild gains following two previous months of declines. The Core CPI, which excludes food and energy prices, rose by 1.9% on a yearly basis, providing indications that long-term inflation could begin to firm in the coming months. The Federal Reserve would like to see inflation move toward its target goal of 2% before it raises its benchmark Federal Funds Rate for the first time in nearly a decade.
A rate hike is largely viewed as bearish for the major indices, as investors depart from their positions in equities to capitalize on higher yields.
The Dow Jones Industrial Average inched up 6.49 or 0.04% to 17,489.50, while the NASDAQ Composite index rose 1.40 or 0.03% to close at 4,986.02, in spite of weakness in Energy and Media stocks. The S&P 500 Composite index, meanwhile, dropped by 2.75 or 0.13% to 2,050.44, as stocks in seven of 10 sectors closed in the red. Stocks in the Energy and Utilities industries industries lagged, each falling by more than 1% on the session.
Wal-Mart and Home Depot provided a boost to the Dow, each closing Tuesday's session up by more than 3% in the wake of productive third quarters. Wal-Mart, the world's top retailer, reported earnings of $3.3 billion or 1.03 per share, topping analysts' per share forecasts of 0.98. Earlier this fall, Wal-Mart downgraded its guidance for 2016 due in part to intense competition from Amazon (O:AMZN) in the online marketplace. Home Depot, meanwhile, jumped 5.22 or 4.32% to 126.06 after beating analysts' earnings forecasts last quarter. The results boosted shares in Lowe`s Companies Inc (N:LOW), which is scheduled to report its quarterly earnings on Wednesday. The worst performer was Caterpillar Inc (N:CAT), which lost 1.02 or 1.45 to 69.37.
The biggest gainer on the NASDAQ was Russian telecom company VimpelCom (O:VIP), which gained 0.29 or 8.64% to 3.59. Shares in Vimpelcom are still down more than 40% over the last year. The worst performer was Keurig Green Mountain Inc (O:GMCR), which fell 4.35 or 9.78% to 40.14. Keurig, one of the world's largest coffee companies, has also struggled mightily this year, amid uncertainty regarding the company's new iced coffee maker. Over the last 12 months, Keurig shares are down by approximately 70%.
The top performer on the S&P 500 was Airgas Inc (N:ARG), which surged more than 29% to 137.16 after Air Liquide (PA:AIRP) SA agreed to acquire the U.S. based gas company in a $13.4 billion deal. The acquisition is expected to strengthen the French industrial gas company's imprint in North America. Keurig was also the worst performer on the S&P 500 just below Chesapeake Energy Corporation (N:CHK), which fell 0.47 or 7.41% to 5.87. On Tuesday, U.S. crude futures fell sharply by more than 2% to drop near 10-week lows below $41 a barrel.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 1,955 to 1,138 margin.