LONDON (Thomson Financial) - US stocks <http://www.abcmoney.co.uk/tag/stocks.htm> were tipped to open higher as credit issues were temporarily sidelined amid a subdued July core wholesale inflation reading and a fall in the trade deficit, although Wal-Mart's quarterly earnings disappointed. According to IG Index, the Dow is seen opening around 8 points higher at 13,246 having closed 3 points weaker on Monday. In economic releases ahead of today's bell, July wholesale prices rose more sharply than expected, as energy prices surged, while core prices rose at their fastest annual pace in nearly two years, the Labor Department said today. The department's Producer Price Index, which measures inflation pressures before they reach the consumer, rose 0.6 pct in July, sharply higher than the 0.1 pct expected. Core prices, which exclude volatile food and energy prices, were up only 0.1 pct for the month compared with a 0.2 pct expected gain. Over the past year, core prices have risen an unadjusted 2.3 pct, the fastest annual gain since September 2005. Elsewhere, the trade deficit dropped to a four-month low in June as record exports of farm goods and autos offset a jump in crude oil <http://www.abcmoney.co.uk/tag/oil.htm> prices. Imports from China hit an all-time high despite recalls of tainted Chinese products. The Commerce Department reported Tuesday that the trade deficit dropped to 58.1 bln usd in June, a 1.7 pct decrease from May and the lowest imbalance since February. The decline caught analysts by surprise. They had been looking for a small increase reflecting the fact that global oil prices have been rising. In earnings news this morning, Wal-Mart reported lower-than-expected quarterly results and revenue, saying some of its customers were straining under economic pressures. The discounter has said higher oil prices can cut into how much its customers have to spend at its discount stores. It revealed EPS from continuing operations of 0.76 usd, against 0.72 usd. However the retailer cut its full-year estimates for EPS from continuing operations to 3.05-3.13 usd, from 3.15-3.23 usd. Meanwhile, Home Depot, the world's largest home improvement store chain, reported a 14.8 pct drop in Q2 profit as sales slid, particularly at stores open at least a year. The Atlanta-based company <http://www.abcmoney.co.uk/tag/company.htm> said earnings from continuing operations totaled 1.52 bln usd, or 77 cents a share, in Q2. On that basis, analysts surveyed by Thomson Financial were expecting earnings of 72 cents a share. In company news, less than two weeks after Mattel Inc. recalled 1.5 mln Chinese-made toys because of lead paint, the toy industry is bracing for another blow that could give parents more reason to rethink their purchases just before the critical holiday shopping season. Mattel is set to announce the recall of another toy involving a different Chinese supplier as early as Tuesday, according to three people close to the matter who spoke on condition of anonymity because of the sensitivity of the situation.
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