Stocks rose today on the eve of a debt default despite a trench warfare-like fiscal stalemate in Washington.
The Senate is working on yet another bill that the House of Representatives would find palatable. The House failed to pass two bills yesterday that would have allowed the government to re-open and avoid a historic debt default. The Senate will meet at noon today. The body might be able to vote on a proposal by Harry Reid and Mitch McConnell, the top-ranking members of each party, which is reportedly very close to completion. The deal would keep the government funded until Jan. 15.
As the government's haplessness has already caused half a month of anguish for furloughed workers, program beneficiaries and financial markets, Fitch has already downgraded America's AAA debt rating to negative from stable, saying that the debate is "undermining confidence in the role of the US dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the US."
While the government shutdown has brought a drought of economic indicators, today we will at least get a look a the housing market's health. The National Association of Homebuilders' housing market index in August is expected to repeat September's level of 58. The Federal Reserve will also release its Beige Book of anecdotal signs of economic conditions this afternoon.
US stock index futures rose this morning following Tuesday's declines. Dow
(INDEXDJX:.DJI) futures were up 0.40% at 15,155. Futures on the S&P 500
(INDEXSP:.INX) rose 0.38% to 1,698.40 and Nasdaq
(INDEXNASDAQ:.IXIC) futures climbed 0.25% to 3,249.00.
Today is a big day for financial earnings. Bank of America
(NYSE:BAC), the second-largest US lender, posted a profit of $0.20 per share, up from just a penny a year ago. Investment banking profits helped offset the lagging market for mortgages and consumer lending. Shares of the bank declined slightly in pre-market trading.
PNC Financial Services Group
(NYSE:PNC) saw revenue drop 4% but earnings rose to $1.79 per share from $1.64 per share last year. American Express
(NYSE:AXP) will report after the bell.
(NASDAQ:INTC) beat earnings expectations yesterday as the enterprise PC market improved. Profit came in at $0.05 per share and revenue rose 0.2% to $13.48 billion. However, shares fell in after-hours trading as the company said it will keep inventories lean in the coming months.
Twitter updated its S-1, confirming that it will chose the NYSE
(NYSE:NYX) over Nasdaq
(NASDAQ:NDAQ). It also revealed that losses widened in the third quarter to $64.6 million from $21.6 million a year ago.
No positions in stocks mentioned.
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