Investing.com - U.S. stocks opened lower on Tuesday, after data showed that the annual rate of U.S. inflation rose at the fastest pace since October 2008 in May, while a separate report showed that building permits dropped far more than expected in May.
During early U.S. trade, the Dow 30 fell 0.24%, the S&P 500 slipped 0.20%, while the NASDAQ Composite edged 0.17% lower.
The Labor Department reported that U.S. consumer prices rose at an annual rate of 2.1% last month, while prices were up 0.4% from a month earlier. Market expectations had been for an annual increase of 2.0% and a monthly rise of 0.2%.
Rising inflation levels would give the Federal Reserve less leeway to keep interest rates on hold at record lows as the economic recovery continues to gain momentum.
At the same time, the U.S. Commerce Department said that the number of building permits issued last month fell by 6.4% to a seasonally adjusted 991,000 units from April’s total of 1.059 million. Analysts expected building permits to decline by 0.1% to 1.05 million units in May.
The report also showed that U.S. housing starts dropped by 6.5% last month to hit a seasonally adjusted 1.001 million units from April’s total of 1.071 million, disappointing expectations for a decline of 3.7% to 1.034 million units.
General Electric (NYSE:GE) slipped 0.22% after Siemens (XETRA:SIEGn) and Mitsubishi (TOKYO:8058) filed a joint rival bid for France's Alstom (PARIS:ALSO) on Monday. French President Francois Hollande was set to meet with the CEOs of the two companies later in the day.
Amazon.com (NASDAQ:AMZN) added to losses, down 0.34%, as the online retailer was preparing to unveil its own smartphone at an event in Seattle on Tuesday, in a move to push access more directly to its online store, or digital content like music, movies and games.
Yahoo! Inc (NASDAQ:YHOO) declined 0.89%, weighed by news rival Alibaba Group's revenue growth slowed and profit margins declined in the fourth quarter.
On the upside, Medtronic (NYSE:MDT) shares surged 2.34%, still supported by news the maker of medical devices agreed to buy Covidien (NYSE:COV) for $42.9 billion in cash and stock.
Other stocks likely to be in focus included Adobe Systems (NASDAQ:ADBE), scheduled to report quarterly results later in the day.
Across the Atlantic, European stock markets were mixed. The DJ Euro Stoxx 50 slipped 0.11%, France’s CAC 40 added 0.15%, Germany's DAX edged up 0.07%, while Britain's FTSE 100 fell 0.17%.
During the Asian trading session, Hong Kong's Hang Seng declined 0.42%, while Japan’s Nikkei 225 rose 0.29%.