Stocks were up slightly as investors grow optimistic that Washington can hammer out a deal to avert a default, and two major lenders reported earnings.
Republicans left a meeting with President Obama yesterday in a good mood. The New York Times reported
that the GOP might allow the Treasury to borrow money to meet its obligations through Nov. 22 in exchange for continued negotiations on deficit and tax reduction.
US stock index futures headed for a slightly higher open. Dow
(INDEXDJX:.DJI) futures were up 0.17% at 15,058. Futures on the S&P 500
(INDEXSP:.INX) rose 0.14% to 1,687.30 and Nasdaq
(INDEXNASDAQ:.IXIC) futures gained 0.15% to 3,198.25.
Later today, the University of Michigan/Reuters consumer confidence index will come out. Economists expect the index to fall 2.5 points this month to 75.
(NYSE:JPM) reported a quarterly loss, its first in nearly a decade due to legal costs. Including a $9.15 billion litigation expense, the bank lost $0.17 per share, down from $1.40 in profit from a year ago.
"We continuously evaluate our legal reserves, but in this highly charged and unpredictable environment, with escalating demands and penalties from multiple government agencies, we thought it was prudent to significantly strengthen them. While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters," said CEO Jamie Dimon. "The Board continues to seek a fair and reasonable settlement with the government on mortgage-related issues and one that recognizes the extraordinary circumstances of the Bear Stearns and Washington Mutual transactions, which were undertaken at the request or encouragement of the US government."
Excluding legal costs, the bank beat earnings expectations. Ignoring one-time charges, the bank earned $1.17, beating analyst expectations of $1.17. Shares were up 1.3% in the pre-market.
(NYSE:WFC) shares plunged 1.9% as the mortgage industry suffered, and the bank cut costs. In the third quarter, mortgage banking income fell 43% from a year ago. Earnings per share of $0.99 beat expectations by $0.02, but revenue of $20.5 billion fell short.
"As expected, mortgage banking revenue was lower in the quarter as the recent increases in interest rates reduced refinance volume, but this impact was partially offset by improved credit and lower expenses," said CFO Tim Sloan.
that broadcasters might file a petition to bring their fight with Aereo, the TV service that streams local TV broadcasts over the Web, to the Supreme Court. Aereo is backed by Barry Diller, Chairman of IAC/InterActiveCorp
(NASDAQ:IACI), who made fast enemies with the likes of Walt Disney Co
(NYSE:DIS) and CBS
(NYSE:CBS) for stealing their content. If the start-up wins, it could seriously threaten subscription and advertising revenue for traditional TV stations.
No positions in stocks mentioned.
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