U.S. stock futures were lower, indicating a similar start for stocks as as surging oil prices took some of the optimism that coursed throughout the markets following yesterday's Federal Reserve's quarter point rate cut to 4.5%Yesterday, U.S. stocks ended with big gains following the Fed's decision. Interestingly, stocks first declined following the policy statement announcement only to jump about an hour after it. The Dow industrials rose 137 points, or 1%, the S&P 500 18 points, or 1.2% and the Nasdaq Composite 42 points, or 1.5%.
Already yesterday in after-hours trading oil jumped above $95 a barrel and today rose to a new record above $96 a barrel. While the rate cut may have contributed to this surge in oil prices (through a lower dollar, which indeed reached yet another all-time low against the euro), many trader were also surprised by a drop in U.S. crude stockpiles which raised concerns about supplies for coming winter demand. Other energy futures also gained.
While oil prices may be the main reason to stop investors' enthusiasm over the rate cut, most in the Street also feel this may be the last Fed rate cut in a while as economic growth in the third quarter came at a strong 3.9%, there are some concerns of increasing inflation risk and as energy prices are surging adding pressure on inflation.
While the Fed and its future policy is still very much the focus this morning, several economic reports are also due today and investors will no doubt eye them to get a better feel of possible future events:
- At 8:30 a.m. -- September personal income and spending is due, which includes a key inflation measure.
- Also at 8:30, weekly initial claims will be released ahead of tomorrow's non-farm payroll.
- At 10:00 a.m. -- September pending home sales and the October ISM index, a gauge of nationwide manufacturing activity.
- Car and truck sales for October will also be released today.
Overseas, Asian stocks finished higher, but European stocks are trading lower.
A whole slew of companies is releasing earnings today including Exxon Mobil (NYSE: XOM), Eastman Kodak (NYSE: EK) and Sprint Nextel (NYSE: S).
In other news, Crocs Inc. (NASDAQ: CROX) was punished by investors in after-hours trading after the company reported results that generally beat estimates and as it raised guidance. CROX shares are down over 21.5% in premarket trading. Is Crocs a fad, seems to be the concern.
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Reader Comments (Page 1 of 1)
11-01-2007 @ 11:26PM
Kevin said...
The oil stock shortage is the biggist lie ever! ask your state and federal fuel tax revenue funds they are at an all time low!!! Nebraska $80,000,000 lower this year Iowa nearly $100,000,000 people are buying less gas there is more in oil than ever. Bush is just paying his buddies back. If we truely had honest representation our Concress an Representives would do something about it!!!!!
11-07-2007 @ 9:04AM
Phil Carleen said...
The U.S. government is a vital part of a market economy...it sets interest rates, provides liquidity for the dollar, owns gold, foreign currencies, and oil.Starting today, it should increase interest rates, buy dollars, sell foreign currencies, and SELL gold, using the very profitable proceeds to reduce the federal debt...then it should announce it will sell oil from our Strategic Reserve until the price reaches $60 per barrel...what do you think, or what else would you recommend?