Wall Street is heading for another day of gains as investors expect the incoming Federal Reserve head to continue monetary stimulus. Investors are also encouraged by the much lower figure for jobless claims.
After reaching record highs yesterday, Dow
(INDEXDJX:.DJI) futures were up 0.04% at 15,785.00 while futures on the S&P 500
(INDEXSP:.INX) rose 0.14% to 1,781.20. However, Nasdaq
(INDEXNASDAQ:.IXIC) futures were down 0.26% to 3,393.00.
Janet Yellen will deliver her testimony to the Senate Banking Committee to begin her confirmation process. Yellen released a prepared statement yesterday after the market close, defending the Fed’s quantitative easing. Her dovish statements indicated that she isn’t about to pull back on the stimulus program, but traders will be listening closely to her testimony today for clues about when the central bank will reduce the pace of asset purchases. The hearing will begin at 10 a.m.
Three major US economic indicators were released today. Initial jobless claims fell by 2,000 last week to 339,000. The indicator has been volatile lately due to processing delays in California. Labor productivity rose 1.9% while labor costs fell 0.6% in the third quarter. America’s trade deficit with the rest of the world widened to $41.8 billion from $38.7 billion.
A better-than-anticipated report on Japanese GDP also lifted global markets. Japan grew 2.4% on a yearly basis in the third quarter.
The eurozone didn’t fare so well, however. France’s economy grew just 0.2%. On a quarterly basis, France contracted by 0.1%. Germany missed expectations, growing just 0.6%. Italy’s recession continued for its ninth straight quarter, shrinking 1.9%. The eurozone as a whole shrank 0.4% year-over-year.
In company news, Cisco Systems, Inc.
(NASDAQ:CSCO) shares dropped nearly 12% despite the networking company’s better-than-expected earnings report. Adjusted earnings per share were $0.53, up from $0.48 per share a year earlier. Revenues rose just 1.8% as orders were weak. CEO John Chambers said Asian sales were down 10%, blaming the political situation China, which favors competitors such as Huawei
(SHE:002502). Guidance for the current quarter were ugly. Cisco predicts it will see revenue drop 8-10% on a yearly basis.
Wal-Mart Stores, Inc.
(NYSE:WMT) fell 1.7% in the pre-market. The chain store reported greater earnings than expected with EPS of $1.14 from $114.9 billion in revenue. Comparable store sales fell 0.3%, however.
One gainer this morning was Office Depot Inc
(NYSE:ODP), which rose 3.5% in pre-market trading after Bank of America
(NYSE:BAC) raised its rating on the stock to Buy from Underperform. The bank’s analysts cited the merger with OfficeMax and the newly appointed CEO as positive developments.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.