U.S. stocks inched higher this morning indicating what seems to be a steady to higher open. While investors remained jittery about the credit markets and consumer spending, after Starbucks slashed its earnings outlook for the fourth quarter.Yesterday, US markets finished lower again despite finding positive territory earlier in the session. Concerns over the health of financial-services firms as more announced write-downs and consumer spending as J.C. Penney and other retailers lowered their earnings outlook hit U.S. stocks. The Dow industrials dropped 120 points, or 0.91%, the S&P 500 ended 19 points lower, or 1.32%, and the Nasdaq Composite dropped 25 points, or 0.98%.
Several economic indicators will be released today just before the opening bell: September net foreign purchases, October industrial production and capacity utilization.
Oil prices climbed somewhat today to just above $94 a barrel, despite a surprising build in US crude reserves. Still, traders expectat global crude supplies will remain tight.
Overseas, stocks fell in Europe and Asia, led by banks and mining companies. This is the third weekly decline due to concerns that losses in the credit market will slow economic and profit growth.
Also in focus today:
Reports late Thursday indicated that Residential Capital, the troubled mortgage lending arm of GMAC, was close to breaching bank loan covenants. The unit is operated by private equity fund Cerberus Capital Management and General Motors Corp. (NYSE: GM), but GM may not provide financial support, according to the Wall Street Journal.
Starbucks Corp. (NASDAQ: SBUX) posted generally strong earnings after the close, reporting fewer sales and a 1% traffic decline in U.S. stores. This news overshadowed an otherwise healthy fiscal fourth quarter. SBUX shares a re declining over 9% in premarket trading.
Fannie Mae (NYSE: FNM) said it will "hold a conference call today to answer accounting questions, after Fortune magazine reported that the U.S. mortgage lender may be "camouflaging" credit losses." After the report, FNM shares were down over 10%.
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