US stocks are set to extend yesterdays losses after the Federal Reserve opted to stay the course, but struck a more hawkish tone.
Yesterday, stocks fell from record highs when the Federal Reserve announced that it will leave interest rates and the level of asset buying as is due to the uncertainty caused by the recent government shutdown. However, the Fed will probably follow through on the taper that was foretold back in May fairly soon.
Last week, 340,000 people filed for unemployment insurance, down from 350,000 in the week prior. Economists expected 5,000 fewer claims. However, this indicator has been unreliable of late due to delayed processing of applications in California and private furloughs tied to the government shutdown.
Before the data releases, Dow
(INDEXDJX:.DJI) futures were down 0.10% at 15,538.00. Futures on the S&P 500
(INDEXSP:.INX) sank 0.05% to 1,757.70. Nasdaq
(INDEXNASDAQ:.IXIC) futures fell 0.37% to 3,379.75.
Today was also a big day for energy earnings. Exxon Mobil
(NYSE:XOM) reported that profit fell 18% to $7.87 billion. EPS came in at $1.79, down from $2.09 a year ago. The company said that weak margins in refining especially, decreased earnings by $2.4 billion. Oil and natural gas output rose 1.5% due to new projects.
(NYSE:COP) reported that profit rose to $2.48 billion. Adjusted earnings per share beat expectations by a penny at $1.47, up from $1.38 a year ago. Trouble in Libya, led the company to reduce its production goals for the quarter by 50 million barrels per day. Shares were up 0.75% this morning.
(NASDAQ:FB) beat earnings expectations for the third quarter, sending shares up nearly 17% initially yesterday. However, the rally petered out when the company acknowledged that it is losing American teenagers. Facebook is also going to be a bit more cautions before increasing the quantity of its Newsfeed ads. Management did not quantify the decline in teen users. Shares of Facebook were up 1.3% this morning.
European shares are mixed today after some indicators threw the recovery narrative into question. Eurozone joblessness rose to 12.2% in September from 12% in August. That headline number would have been much worse had it not been for a dip in Germany’s unemployment rate to 5.2%. France and Italy both saw unemployment rise 0.1 percentage point. German retail sales fell 0.4% in September after rising 0.5% in August.
(INDEXNIKKEI:NI225) fell 1.2% overnight despite an encouraging report on manufacturing. The country’s PMI rose to a three-year high of 54.2 this month, up from September’s 52.5. PMI readings over 50 indicate expansion of the sector.
No positions in stocks mentioned.
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