Wall Street is heading for another day of gains as investors
expect the incoming Federal Reserve head to continue monetary
stimulus. Investors are also encouraged by the much lower figure
for jobless claims.
After reaching record highs yesterday,
(INDEXDJX:.DJI) futures were up 0.04% at 15,785.00 while futures on
(INDEXSP:.INX) rose 0.14% to 1,781.20. However,
(INDEXNASDAQ:.IXIC) futures were down 0.26% to 3,393.00.
Janet Yellen will deliver her testimony to the Senate Banking
Committee to begin her confirmation process. Yellen released a
prepared statement yesterday after the market close, defending the
Fed's quantitative easing. Her dovish statements indicated that she
isn't about to pull back on the stimulus program, but traders will
be listening closely to her testimony today for clues about when
the central bank will reduce the pace of asset purchases. The
hearing will begin at 10 a.m.
Three major US economic indicators were released today. Initial
jobless claims fell by 2,000 last week to 339,000. The indicator
has been volatile lately due to processing delays in California.
Labor productivity rose 1.9% while labor costs fell 0.6% in the
third quarter. America's trade deficit with the rest of the world
widened to $41.8 billion from $38.7 billion.
A better-than-anticipated report on Japanese GDP also lifted global
markets. Japan grew 2.4% on a yearly basis in the third quarter.
The eurozone didn't fare so well, however. France's economy grew
just 0.2%. On a quarterly basis, France contracted by 0.1%. Germany
missed expectations, growing just 0.6%. Italy's recession continued
for its ninth straight quarter, shrinking 1.9%. The eurozone as a
whole shrank 0.4% year-over-year.
In company news,
Cisco Systems, Inc.
) shares dropped nearly 12% despite the networking company's
better-than-expected earnings report. Adjusted earnings per share
were $0.53, up from $0.48 per share a year earlier. Revenues rose
just 1.8% as orders were weak. CEO John Chambers said Asian sales
were down 10%, blaming the political situation China, which favors
competitors such as
(SHE:002502). Guidance for the current quarter were ugly. Cisco
predicts it will see revenue drop 8-10% on a yearly basis.
Wal-Mart Stores, Inc.
) fell 1.7% in the pre-market. The chain store reported greater
earnings than expected with EPS of $1.14 from $114.9 billion in
revenue. Comparable store sales fell 0.3%, however.
One gainer this morning was
Office Depot Inc
), which rose 3.5% in pre-market trading after
Bank of America
) raised its rating on the stock to Buy from Underperform. The
bank's analysts cited the merger with OfficeMax and the newly
appointed CEO as positive developments.