Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Pre-Market Primer: Markets Reel From Italian Deadlock; US Futures Up Ahead of Housing Data, Bernanke Testimony


Italy is looking ungovernable.

US stock index futures rose this morning despite political deadlock in Italy that prompted a sell-off in European equities and bonds.

Fed Chairman Ben Bernanke will begin his two-day semi-annual testimony before Congress at 10:00 a.m. Today, he will face the Senate Banking Committee.

US investors also have a full economic calendar as well. At 10:00 a.m. February consumer confidence numbers come out. Economists expect to see the index rise 2.4 points to 61.0. The housing market will also be in focus. At 9:00 a.m., the S&P/Case-Shiller home price index is expected to show a 0.8% rise in the price of homes in January in the 20 cities that it studies, after rising 0.6% in December 2012. The Federal Housing Finance Agency is also expected to simultaneously report a 0.7% increase in home prices. New home sales are expected to have sold at a seasonally adjusted annualized rate of 381,000 in January, after hitting a rate of 369,000 in the month before.

Before the opening bell, Dow (INDEXDJX:.DJI) futures are up 0.23% at 13,820. Futures on the S&P 500 (INDEXSP:.INX) rose 0.25% to 1,491.20 and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.18% to 2,707.25.

The election results in Italy could result in its economic and fiscal reforms rolling back. The center-left group led by Pier Luigi Bersani narrowly won the lower house of Parliament, but the Senate produced no winners. Reformer Mario Monti's party came in fourth place and the two parties did not garner enough seats to form a coalition, as expected. Comedian Beppe Grillo surprisingly won a plurality of votes. Silvio Berlusconi ruled out forming a coalition with Monti, but might join forces with Bersani.

The euro fell to $1.3097 on the dollar today on the Italian political deadlock. Italian 10-year bond yields jumped to 4.86% from 4.37% before the election, the biggest jump this year. At a bond auction today, Italy sold 8.75 billion euros of short-term debt at an average interest rate of 1.237%, up from 0.73% at a sale last month. Spanish yields also rose 30 basis points to 5.4%. Italy's FTSE MIB (INDEXFTSE:FTSEMIB) stock index slipped 4.18%, with financial shares falling as much as 10%. Trading on some Italian banks was halted almost immediately at the market open. French, German, Spanish, and UK stock indices all declined.

In corporate news, Home Depot (NYSE:HD), the biggest US home improvement retail chain, posted earnings of $0.68 per share, beating estimates by $0.04. The company also said that it will earn $0.07 per share more than expected in the current quarter and announced that it will buy back $17 billion in shares and increase its quarterly dividend by 34%. As with rival Lowe's (NYSE:LOW), which reported yesterday, Hurricane Sandy and an improving housing market contributed to Home Depot's sales and profits.

Yesterday, Hewlett-Packard (NYSE:HPQ) unveiled a seven-inch tablet computer running Google's (NASDAQ:GOOG) Android operating system. At $169, the tablet undersells Amazon's (NASDAQ:AMZN) Kindle Fire as well as Google's own similar offering.

Twitter: @vincent_trivett
< Previous
  • 1
Next >
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.
Featured Videos