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Pre-Market: Buffett Bets on Exxon; Moody's Cuts Bank Ratings


Stocks are heading for another record day.

Stocks are set to break records again today thanks to Janet Yellen's commitment to quantitative easing.

Before the opening bell today, stock futures rose, indicating that the major indices are likely to open higher. Dow (INDEXDJX:.DJI) futures were up 0.20% at 15,871 and contracts on the S&P 500 (INDEXSP:.INX) rose 0.23% to 1,791.80. Nasdaq (INDEXNASDAQ:.IXIC) futures declined 0.15% to 3,415.00.

Stocks hit records yesterday after the incoming Federal Reserve Chairwoman Janet Yellen told Congress that she will probably continue the central bank's monetary stimulus efforts.

Today, the government reported that October import and export prices fell by more than expected. Exports fell 0.5% on a monthly basis and imports sank 0.7%. Later this morning, a report on US industrial production is expected to show a 0.1% rise after rising 0.6% in September. The capacity utilization rate is likely to have stayed steady at 78.3%. Wholesale trade inventories will also come out. Economists expect the indicator to record a 0.4% increase in inventories.

Chinese markets rallied after a leaked memo with more detail about planned reforms circulated on social media. One change will probably relax the famous one-child policy.

European stocks were higher today. CPI in the eurozone fell 0.7% in October after falling 1.1% in September. The European Central Bank said last week that it will cut interest rates to fight deflation in the region.

Exxon Mobil Corporation (NYSE:XOM) shares rose 1.5% after Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) disclosed a 40-million-share stake in the oil giant. The famous investor now owns about 1% of the company.

Ahead of the launch of the new PlayStation console in the US, Sony (NYSE:SNE) shares were down despite positive reviews and a more competitive price than Microsoft's (NASDAQ:MSFT) Xbox console.

Moody's, the ratings agency, lowered the senior debt ratings for major banks today. Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM), and Bank of New York Mellon (NYSE:BNY) were all cut one notch due to reduced expectations of government support.

"We believe that US bank regulators have made substantive progress in establishing a credible framework to resolve a large, failing bank," said Robert Young, Managing Director of Moody's. "Rather than relying on public funds to bail out one of these institutions, we expect that bank holding company creditors will be bailed in and thereby shoulder much of the burden to help recapitalize a failing bank."

Twitter: @vincent_trivett
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