More fall in prices expected in February

PRICES of just about everything, including US stocks, fell in January, and February could bring more of the same unless US economic data picks up.

Last Friday's trading on the stock market was in line with that for January: stocks lurched violently up and down and finished with a substantial loss. The broad Standard & Poor's 500 declined 3.1 per cent for the month, the biggest monthly loss since its similarly unimpressive start to last year.

There were much bigger declines in the value of oil, copper, iron ore, the euro and emerging-market stocks and bonds. The only assets that gained in value were safe havens like gold and Treasuries.

The commodities bust and the rise in the US dollar could push prices down further. For corporate and economic growth in the US, muted inflation could be a good thing but outright deflation would be ruinous. Investors are currently sifting through earnings reports and data to calculate whether the US recovery can survive the scare on commodity and foreign- exchange…