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Investors will also be watching a report on retail inflation. With fears of another recession, investors and the Federal Reserve have also worried about deflation. Falling prices would hurt wages and earnings, making it less likely that companies would ramp up hiring. But investors will be looking for price increases, which are seen as normal during periods of economic growth. The Producer Price Index likely rose 0.2 percent in July after falling 0.5 percent in June. Excluding volatile energy and food prices, economists predict core inflation rose 0.1 percent last month, similar to the growth reported in June. The report is due out at 8:30 a.m. EDT. Home Depot followed fellow home-improvement retailer Lowe's in beating earnings expectations. Home Depot, like Lowe's on Monday, also modestly cut its revenue forecast as shoppers remain cautious about spending amid high unemployment. The company also raised its earnings forecast because of share repurchases. Potash Corp. of Saskatchewan Inc. rejected an unsolicited takeover bid from BHP Billiton Ltd. worth about $38.49 billion, or $130 per share. The fertilizer producer said the bid undervalued the company. Shares of Potash surged in pre-opening trading after the company rejected the offer. They rose $27.70, or 24.7 percent, to $139.85. With investors looking to buy stocks, bond prices fell. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.61 percent from 2.57 percent late Monday. Its yield is often used to set interest rates on mortgages and other consumer loans. Overseas, Britain's FTSE 100 rose 0.9 percent, Germany's DAX index gained 0.8 percent, and France's CAC-40 rose 1 percent. Japan's Nikkei stock average fell 0.4 percent.
[Associated
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