In what has become a market roller coaster ride, U.S. stock futures were down this morning, indicating a lower start, a day after the Dow has staged a nearly 250 point rally. It seems the uncertainty regarding the Federal Reserve's next move left investors looking for direction. Today, more economic data is on the docket as well as several companies reporting earnings. It seems the market may yet again change direction today.Yesterday, U.S. stocks recovered most of Tuesday's selloff. The Dow industrials, which dropped 280 points on Tuesday finished the day up 248 points Wednesday. The Street was encouraged by a letter Fed Chairman Bernanke sent to Sen. Charles Schumer, in which he said the Fed was monitoring the financial markets and was prepared to take action if necessary.
Today, an article in the WSJ left investors less sure about the Fed's next move as it suggests that Bernanke and the Fed may not rush to cut rates [subscription required]. Bernanke may do so eventually, the Journal writes, but his strategy is to break expectation that financial markets turmoil leads to the Fed bailing out. Meanwhile, investors will have to wait and any speeches, like the one Bernanke is set to give Friday at the Federal Reserve Bank of Kansas City's annual symposium in Jackson Hole, Wyo will be scrutinized.
Today at 8:30 a.m., the second release of second-quarter GDP is due. Economists expect the economy grew at a 4.1% rate in Q2, faster than the original estimation of 3.4%. Update (8:41 a.m.): The U.S. economy bounced back in the second quarter , growing at a 4% annual real growth rate. It is unlikely this will have an impact on the direction of the market.
Also at 8:30, weekly jobs claims will be reported.
Overseas, Asian markets rebounded, closing higher. Hong Kong led the rally in Asia due to earnings while news of out China was that Finance Minister Jin Renqing resigned.
In Europe, despite news that European banks are battling short-term loan crunch, shares rose for the ninth time in ten sessions, also helped by some strong earnings.
In corporate news:
Lehman Brothers upgraded Motorola Inc. (NYSE: MOT) to Overweight from Equal weight, saying it expects a recovery in the the group's phone unit.
Earnings are due from Tiffany & Co. (NYSE: TIF), and after the close, Dell (NASDAQ: DELL) - expected 30 EPS.
Novell (NASDAQ: NOVL) shares are up 2.2% in premarket trading after the company reported quarterly results yesterday, beating estimates.
More corporate news: Before the bell: YHOO, AAPL, GE, GM, SHLD
Comfort Zone Investing: Four Powerful Numbers for Picking Stock Winners
Google Plans to Shut Its China Search Engine
Nine Little-Known Dividend Stocks with Big Yields
Reader Comments (Page 1 of 1)
8-30-2007 @ 8:33AM
EconomyUhOh said...
Who will get rich off of this economy: Credit card counselors, lawyers, foreclosure and bankruptcy courts. Who will lose in this economy: Credit card co.'s, mortgage co.'s, banks, homeowners, credit card holders, developers, construction co.'s, tiltle co.'s, realtors, mortgage underwriters, building supply co.'s furniture co.'s, appliance co.'s, etc As these co.'s go under what will happen? All the employees will be laid off. What's that mean? Less consumer spending, more foreclosures, more bankruptcies. Consumer spending makes up 2/3 of our GDP. So who will be the BIGGEST LOSER? Our ECONOMY. As the economy falls from little spending the layoffs spread to all spending sectors, then there will me more foreclosures and bankruptcies. Vicious widespread cycles.
8-30-2007 @ 8:44AM
earl skovsgard said...
yep---we are on our way down the tube ---soon will be a third world economy --delivering pizza to one another on bycycles
8-30-2007 @ 8:55AM
investag8ting said...
In 2005 when they changed the bankruptcy laws they also changed the laws for credit card companies. Now they can check your income/debt ratio. So even if a person makes their payments on time and doesn't go over their limits they can raise your interest rate, not a little bit but even double it. So they rewarded the good middle class people who paid their bills with a 30% interest rate hike. They took the people with their heads barely above water and pushed them under. Now these people are calling bankruptcy lawyers. Also, if their homes devalued too much, why pay on a big morgage for something that is worth less, might as well go bankrupt on the whole package. Credit cards and devalued house.
8-30-2007 @ 10:03AM
ToughTimesOuch said...
Low unemployment? Does that include all the people making minimum wage with no health insurance? We have huge trade deficits, huge national debt, crumbling infrastructure, unaffordable health care, over priced insurance, higher property tax, record foreclosures, decline in home values, subprime scams, terrorism, scandals in our government, scandals in our corporations, outsourcing, borrowing to pay for wars, so what is the good news? Would the good news be the toxic products coming in from China?