Market Snapshot August 18, 2009, 4:30PM EST

Stocks Rebound on Retail Results

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Commercial lender CIT Group (CIT) said Monday in a regulatory filing it lost $1.68 billion in the second quarter, and again warned it might have to file for bankruptcy protection if it fails to restructure its business.

In economic news Tuesday, the U.S. producer price index (PPI) fell 0.9% in July, while the core rate dipped 0.1%. June's 1.8% jump in the headline and the 0.5% rise in the core were not revised. Price weakness was broadbased. Energy prices declined 2.4% after gains of 6.6% and 2.9% in June and May, respectively. Gas prices fell 10.2%. Food prices fell 1.5% after a 1.1% surge in June. Passenger car prices dropped 1.7% after three straight monthly gains. Capital goods prices dipped 0.2%.

U.S. housing starts fell 1.0% to a 0.581 million-unit annual rate in July, from an upwardly revised 0.587 million pace in June (from 0.582 million). May's 0.562 million pace was revised down to 0.551 million. Permits fell 1.8% to 0.560 million, from a revised 0.570 million in June (from 0.563 million).

The International Council of Shopping Centers (ICSC) and Goldman Sachs chain store index fell 0.9% in the week ended Aug. 15 after being unchanged the week before. Sales on a year-over-year basis fell 0.6% after rising 0.4% the week before. "Consumers remained cautious with their spending," said Michael P. Niemira, ICSC chief economist.

Bloomberg News reports the German ZEW Center for European Economic Research said its index of investor and analyst expectations rose to a higher than expected 56.1 level in August from 39.5 in July, the largest gain in 3 years. Germany's economy expanded 0.3% in Q2, a report showed last week, bringing an end to the worst slump since World War II sooner than forecasters had expected.

Bloomberg News reports the U.K.'s annual inflation rate unexpectedly held at 1.8 in July as the cost of computer games, DVDs and alcohol rose, a sign the economy is staving off deflation as the recession eases. The annual gain in consumer prices was the same as in June, which was the lowest level since September 2007, the Office for National Statistics said.