LONDON (SHARECAST) - -Workday rockets 74 per cent after IPO
-Lacker (Fed) believes risks to growth will dissipate next year
-Citi cuts probability of Grexit to 60% from 80% for next 12-18 months
-S&P 500 at 50 day moving average
Dow Jones Industrial: 0.02%
Nasdaq Comp.: -0.07%
S&P 500: -0.30%
US stocks finished the session in a mixed fashion despite upbeat economic data out this morning. That as investors reacted to worries regarding the outlook for growth in China and the Eurozone, not to mention the looming “fiscal cliff” at home, in the US.
Thus, banks were one of the weakest sectors as the S&P 500 teetered in the proximity of its 50 day moving average (in the 1,420 point area); what it does at this point -bounce back or fall through support- will decide the markets´ direction in the most extreme short-run.
Banks down as net interest margins fallTwo banking giants had varying fortunes as the third quarter results season got under-way, with JP Morgan topping expectations and Wells Fargo falling short of them. Citigroup's earnings are scheduled for Monday.
JP Morgan reported third quarter earnings per share (EPS) of $1.40, 20 cents above the $1.20 that the market consensus was anticipating. The bank reported a profit of $5.7bn compared to $4.3bn generated in the year-ago period.
Revenue rose by 6% to $25.9bn compared to $23.76bn a year earlier and the $24.12bn expected by the market.
JP Morgan Chief Executive Jamie Dimon said that the US housing market "has turned the corner" and that the bank would be reducing the amount set aside to cover losses from mortgages. Dimon also said that there has been continued momentum and a strong performance across all businesses. Revenue rose in every business line. Nevertheless, litigation charges are expected to remain high for some time to come.
Wells Fargo's third quarter revenue was a shade shy of the $21.41bn Wall Street was expecting at $21.37. EPS of 88 cents was slightly above the 87 cents median forecast, however.
The lender has been benefitting from intense mortgage activity, but the drop in its net interest margins led to the above “revenue miss.”
Computer chip firm Advanced Micro Devices continues to struggle. After the bell last night it warned that third quarter revenue would be below expectations. The firm now expects third quarter revenues will be about a tenth lower than in the second quarter, instead of one hundredth less. There are now reports that the firm may cut 30% of its headcount. Furthermore, and as a result of its “warning”, there is now speculation of imminent cuts from the major debt rating agencies.
Wal Mart was raised to buy at Jefferies, while Sun Trust Banks was downgraded by BTIG.
The worst performing sectors were: Platinum (-4.72%), Coal (-2.63%) and Banks (-2.31%).
Consumer expectations (almost) back at levels from before the crisis
The Thomson Reuters/University of Michigan preliminary October consumer sentiment index had been tipped to slide to 78.0 from 78.3 in September (Consensus: 74), but in fact rose to 83.1. That is no less than its highest level since September of 2007.
Improved expectations for the labour market are the main explanation for the above, some are saying, although other economists are warning not to read too much into the report as far as its implications for short-term spending or the economy are concerned.
For their part, this is what Barclays Research had to say: "We expect that consumer sentiment will continue to move higher as the labor market recovery picks up and income trends improve. One major headwind remains the fiscal cliff, which has the potential to drag on growth at the start of 2013; consumers clearly expect that the cliff will not hit in full, given that income trends and perceptions of government economic policy have been either inching higher or moving sideways.
While an orderly resolution would be a further boost to consumer sentiment, the possibility of the full cliff hitting remains a large downside risk."
So-called "core" producer prices -which strip out the effect of changes in food and energy inflation- remained flat during the month of September, versus August, below the 0.2% gain expected.
The federal government´s ran a surplus of $75bn in September, after “red ink” of -$62.4bn in August. For the fiscal year 2012 to data the deficit run up was $1.089trn, 16% less than in 2011 and below the $1.2trn which had been expected.
Barclays expects the spending over-runs to come down further, towards $1trn, in the next fiscal year. Fed keeps buying debt
Crude oil for November delivery is falling 35 cents to $91.74 on the New York Mercantile Exchange. For the week it rose over 2% on increased Mid-East tensions.
US Treasuries finished up by 4/32 dollars, with the yield on the benchmark 10-year note down to 1.66% from 1.67% overnight. This after the Federal Reserve purchased $1.89bn in debt maturing between 2036 and 2042.
S&P 500 - Risers
Monster Beverage Corp (MNST) $57.08 +4.85%
Carmax Inc. (KMX) $32.55 +4.16%
Ecolab Inc. (ECL) $66.24 +4.04%
Hasbro Inc (HAS) $39.30 +3.94%
Dell Inc. (DELL) $9.69 +3.64%
Helmerich & Payne Inc. (HP) $49.60 +2.78%
Electronic Arts Inc. (EA) $13.41 +2.76%
Teradata Corp. (TDC) $74.59 +2.18%
Mattel Inc. (MAT) $36.01 +2.16%
Dean Foods Co. (DF) $14.96 +2.12%
S&P 500 - Fallers
Advanced Micro Devices Inc. (AMD) $2.74 -14.38%
Alpha Natural Res (ANR) $7.88 -7.84%
Dollar Tree Stores Inc. (DLTR) $41.11 -5.01%
Regions Financial Corp. (RF) $7.28 -4.46%
First Horizon National Corp. (FHN) $9.52 -4.32%
R.R. Donnelley & Sons Co. (RRD) $10.66 -4.14%
Harris Corp. (HRS) $48.84 -3.95%
Fifth Third Bancorp (FITB) $15.27 -3.90%
Keycorp (KEY) $8.33 -3.48%
E*TRADE Financial Corp. (ETFC) $9.00 -3.43%
Dow Jones I.A - Risers
Boeing Co. (BA) $71.85 +1.44%
Hewlett-Packard Co. (HPQ) $14.41 +1.12%
Wal-Mart Stores Inc. (WMT) $75.81 +1.07%
International Business Machines Corp. (IBM) $207.80 +0.99%
Home Depot Inc. (HD) $59.56 +0.93%
Microsoft Corp. (MSFT) $29.20 +0.86%
Cisco Systems Inc. (CSCO) $18.41 +0.79%
Walt Disney Co. (DIS) $50.59 +0.50%
Merck & Co. Inc. (MRK) $45.62 +0.37%
Coca-Cola Co. (KO) $38.23 +0.31%
Dow Jones I.A - Fallers
Bank of America Corp. (BAC) $9.12 -2.36%
AT&T Inc. (T) $35.63 -1.74%
Verizon Communications Inc. (VZ) $44.62 -1.28%
JP Morgan Chase & Co. (JPM) $41.62 -1.14%
American Express Co. (AXP) $57.89 -0.99%
Intel Corp. (INTC) $21.48 -0.92%
Alcoa Inc. (AA) $8.69 -0.91%
Chevron Corp. (CVX) $112.07 -0.88%
Travelers Company Inc. (TRV) $68.72 -0.64%
E.I. du Pont de Nemours and Co. (DD) $48.69 -0.18%
Nasdaq 100 - Risers
Monster Beverage Corp (MNST) $57.08 +4.85%
Dell Inc. (DELL) $9.69 +3.64%
Electronic Arts Inc. (EA) $13.41 +2.76%
Mattel Inc. (MAT) $36.01 +2.16%
Baidu Inc. (BIDU) $111.22 +2.00%
Comcast Corp. (CMCSA) $35.78 +1.85%
Sirius Satellite Radio Inc. (SIRI) $2.78 +1.83%
CH Robinson Worldwide Inc (CHRW) $59.94 +1.77%
Check Point Software Technologies Ltd. (CHKP) $46.05 +1.36%
Wynn Resorts Ltd. (WYNN) $113.81 +1.20%
Nasdaq 100 - Fallers
Infosys Technologies Ltd. (INFY) $44.54 -7.63%
Vertex Pharmaceuticals Inc. (VRTX) $53.53 -5.89%
Dollar Tree Stores Inc. (DLTR) $41.11 -5.01%
Staples Inc. (SPLS) $11.10 -2.97%
Netflix Inc. (NFLX) $64.33 -2.50%
Sears Holdings Corp. (SHLD) $59.92 -1.64%
F5 Networks Inc. (FFIV) $97.27 -1.54%
Marvell Technology Group Ltd. (MRVL) $8.75 -1.46%
Micron Technology Inc. (MU) $5.67 -1.39%
Research in Motion Ltd. (RIMM) $7.80 -1.39%
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