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Pre-Market Primer: Moody's Puts Banks on Review; Central Bankers Gather to Speak at Jackson Hole


Moody's thinks that the government might let huge banks fail.

Stocks are heading for a positive trading day as the world's central bankers gather for their annual confab at Jackson Hole.

Before the opening bell, Dow (INDEXDJX:.DJI) futures were up 0.03% at 14,944. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.07% to 1,656.00 and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.12% to 3,105.50. Bond prices continued to fall this morning as the 10-year yield rose three basis points to 2.91%.

Asian and European indices are lower today. British shares are higher as the UK's GDP report came in slightly higher than expected. The country's economy grew 1.5% over a year ago. German GDP was right in line with estimates, showing growth of 0.5% over a year ago.

Later this morning, we will get a reading of new home sales in July. Economists expect sales to have slowed slightly to a seasonally adjusted annualized rate of 487,000.

Moody's put major banks on review for downgrade "as it considers reducing its government (or systemic) support assumptions to reflect the impact of US bank resolution policies."

Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) are all on review. The ratings agency now believes that the government is more likely to let a major financial institution fail in a crisis.

Pandora (NYSE:P) shares fell 7% in after-hours trading after its earnings statement. The bottom line beat Wall Street's expectations with earnings per share of $0.04, but guidance was light. The online music streaming service warned that the price of acquiring new music was rising. It also took off the 40-hour monthly free listening limit that it initially put in place to control costs.

Gap (NYSE:GPS) reported that second-quarter earnings rose to $0.64 per share, up $0.15 from a year ago. This beat expectations by a penny. Shares are down slightly, however, as the retailer's forward guidance was lower than analysts' estimates.

The annual Kansas City Fed's Jackson Hole Economic Policy Symposium will hold talks by the heads of several major central banks including Fed Chairman Ben Bernanke, Bank of England head Mark Carney, and ECB President Mario Draghi.

Twitter: @vincent_trivett
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