Bad News Spreads but Market Remains in Denial

There was enough discouraging news spreading around Wall Street for even the most intrepid investors to take note, but the major indices shrugged off soaring food and energy prices, more ugly housing statistics and uneven earnings reports to close marginally higher on Tuesday.

According to the monthly Producer Price Index (PPI) issued by the Labor Dept., wholesale prices rose by 1.1% in March and are up a stunning 6.9% over the past 12 months.

Also in March, there were 234,685 foreclosure filings against US homeowners, a 57% increase over last year. Nevada, California and Florida were the hardest hit states in the survey released by Realty-Trac, Inc.

Dow 12,362.47 +60.41; NASDAQ 2,286.04 +10.22; S&P 500 1,334.43 +6.11; NYSE Composite 8,978.19 +55.35

In earnings news, broker Charles Schwab, Inc. (SCHW) reported income from continuing operations rose to $305 million, or 26 cents per share, from $236 million, or 19 cents per share, a year earlier.

Johnson & Johnson (JNJ) bested estimates with $1.26 per share reported for the 1st quarter, though those numbers were tempered by slowing sales in several categories and the overall numbers boosted by the weak US dollar.

U.S. Bancorp (USB) saw a 4 percent drop in its first-quarter earnings while drug maker Forest Labs (FRX) posted improved earnings, but investors punished shares on a disappointing forecast for the remainder of 2008, sending the stock down 9%, losing 3.67 to 36.13.

Advancing issues edged decliners, 3431-2627. There were 277 new lows to just 96 new highs.

The price of oil added to the gloomy overhang, reaching a new high of $113.79, up $2.03. Gold gained $3.30 to $932.00. Silver was up 6 cents to $17.85.

Intel (INTC), Washington Mutual (WM), Coca-Cola (KO), JP Morgan Chase (JPM) and Wells Fargo (WFC) highlight the companies releasing earnings on Wednesday. The March CPI reading will also hit the markets prior to the open, and considering today's PPI numbers, they're likely to send another shock.

How long the markets can continue to ignore the steady flow of bad news is anyone's guess, but, considering the low volume of trading the past couple of weeks, the guessing game may soon be at an end as investors protect whatever profits they have left by selling.

NYSE Volume 3,540,240,250
NASDAQ Volume 1,843,419,375