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Fiscal Negotiations Halted, Markets Agitated

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Today's financial recap and tomorrow's financial outlook.

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Political developments in Washington continued to dominate the day's trading. In the morning, Republican Representative Paul Ryan stated that the Senate's deal was not sufficient and that the House would formulate a new plan. Later in the afternoon, the senators said that negotiations had been halted to ascertain the structure of the deal from the House. Markets generally met these news reports negatively.

An ICSC survey of US consumers found that 40% have reduced -- or would reduce -- their spending due to the government shutdown. A German survey of financial market experts saw European economic expectations improving even though feelings on the current situation were slightly worse than they were last month.

US Treasuries were about unchanged from yesterday's close. Yesterday, because the bond market was closed for Columbus Day, 10-year Treasury futures fell roughly the equivalent of a 3.5 basis point rise in yields. Interest-rate-sensitive utility stocks were the worst performers today. All ten sectors of the S&P 500 (INDEXSP:.INX) declined; the number of declining stocks outnumbered the number of advancing stocks by a 4:1 margin.

Before the market open, FedEx (NYSE:FDX) announced a 32 million share buyback plan, which is about 10% of the company's outstanding shares. As of yesterday's close at $115.37, the deal will total $3.7 billion. In other news, it was reported that private equity giant Cerberus is conducting additional due diligence in order to purchase the entire company.

In the pre-market, Johnson & Johnson (NYSE:JNJ) beat earnings expectations. Coca Cola (NYSE:KO), Citigroup (NYSE:C), and Domino's Pizza (NYSE:DPZ) all missed earnings expectations. After the market closed, tech giants Intel (NASDAQ:INTC), and Yahoo (NASDAQ:YHOO) both beat earnings.

Tomorrow's Financial Outlook

The private NAHB housing market survey of builder sentiment for October will be released tomorrow morning. Economists estimate that builder sentiment will decline to 57 from 58 last month on a downtrend in new building permits. The Fed will release its Beige Book of economic anecdotes from mid-August until early October.

In global market-moving news, the UK will release its September employment figures.

Earnings will be very busy tomorrow with 24 major US companies reporting. Notable reports include Bank of America (NYSE:BAC), BlackRock (NYSE:BLK), Abbott Labs (NYSE:ABT), Pepsi (NYSE:PEP), American Express (NYSE:AXP), eBay (NASDAQ:EBAY), IBM (NYSE:IBM), and SanDisk (NASDAQ:SNDK).

Twitter: @Minyanville

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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.

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