U.S. stocks futures were higher this morning indicating a continuation of yesterday's trend: markets are poised to start higher. Reports that Warren Buffett may be buying a stake in Bear Stearns helped sentiment as investors await several economic reports due today.Yesterday, stocks rallied after General Motors (NYSE: GM) and the UAW reached an agreement to end the two-day strike. GM finished the day 9.36% higher. Bear Sterns (NYSE: BSC) also contributed to the rally when it climbed 7.67% yesterday after the New York Times reported it is in talks with a number of investors including Warren Buffett. Overall, the Dow was up 119 points or 0.87%, the S&P 500 8 points or 0.54% and the Nasdaq composite added 15 points or 0.58%.
Today, several economic reports are due:
- At 8:30 a.m. EDT, final second-quarter GDP reading will be reported and economists expect a revision to 3.9% from 4%.
- At the same time, a key inflation figure, the PCE deflator is expected to come within the Federal Reserve's comfort range for inflation for the past 12 months. If that is the case, many will view this as potential for future rate cuts and markets may see further gains. If it comes above that range, markets may reverse the current bullish direction.
- Still at 8:30, weekly initial claims are due.
- At 10:00 a.m., investors can get yet another indication of the ailing housing sector with August new home sales. The rate of sales is expected to drop to 825,000 according to Briefing.com.
The dollar slipped to yet another all-time low against the euro on speculation a government report will show a drop in U.S. home sales, according to Bloomberg. This would strengthen the case for further rate cuts.
Overseas, Asian markets rallied with several of them, including Hong Kong and Australia, hitting new record highs. European stocks were also higher so far today.
In some major corporate news, a group of investors led by private-equity firm J.C. Flowers & Co. that had planned to buy student lender Sallie Mae (NYSE: SLM) for $25 billion now wants out of the deal due to the current economic environment and legislation.
Starbucks Corp. (NASDAQ: SBUX) is down over 3% in premarket after a downgrade to Sell from Neutral at Banc of America Securities, lowering target from $27 to $23. The analyst said that expectations for a quick recovery are too high amid slowing growth.
Google (NASDAQ: GOOG) is planning to expand its staff by a third over the next couple of years, mostly in Europe.
Microsoft (NASDAQ: MSFT), which had launched Halo 3 yesterday, says the important video game sold $170 million in the first day, a record for any game.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Reader Comments (Page 1 of 1)
9-27-2007 @ 3:40PM
Van said...
I would have to bet that GM stocks will double by the end of the year..Goldman & Sachs has been purchasing this stock for some time now and they must be hedging on this for a big profit.....
10-15-2007 @ 2:32PM
Nick said...
Starbucks stock has been on a lackluster downward trend for 12.5 months now, the longest down string in its history. This is highly unusual for a growth company, considering it is set to double in the next 5 years. So where does the stock price go from here? Surely, it must go up. One thing that will help its bottom line (and offset milk cost increases) is the continued falling of the value of the dollar. Last year, for every Euro in profit Starbucks made in the E.U., meant $1.28 . As of today, that same Euro in profit equates to $1.425, more than a 10 percent increase -- without even any net true profit increase. The trend in the dollar will continue for some time; therefore, I think it is safe to say that in dollar terms, Starbucks is probably going to show an acceleration in both top line and bottom line figures for those foreign markets with increasing local foreign currency values visa vie the dollar. In all this should help the company's total bottom line, even taking into account the US market.
The stock price may fluctuate for a short while longer in the 25.90 to 26.50 range; however, I believe now is the time to accumulate the shares. When it starts its upward climb (and it will), it will be a rapid climb and one may lose out on some early momentum. As a growth company, Starbucks in my opinion, should already be a $48 to $50 stock !