The stock market calmed today after rallying yesterday on news
that the United States government avoided default and
) reported a steep drop in revenue.
Thanks to an eleventh-hour deal yesterday, the government is no
longer shut down and federal employees can return to work. The
Senate's compromise, which keeps the government funded through Jan.
15, passed the House of Representatives late last night 285-144.
All of the votes against the bill came from Republicans, but 87 GOP
representatives voted with the majority.
Stocks closed near multi-year highs yesterday, but pessimists are
quick to point out that the short-term nature of the compromise
merely forestalls the next raucous fiscal fight. Dagong, a Chinese
credit ratings agency, still downgraded US debt after the impasse.
"The partial US federal government shutdown apparently highlights
the deterioration of the government's solvency, pushing the
sovereign debts into a crisis status," Dagong
. "As the issue of paying sovereign debts falls into a tool that
the parties make use of to realize their own interests, the
political environment is unfavorable for eliminating the risk of
its sovereign debt default in the long term. The recurrence of the
bi-partisan conflict over debt ceiling once again reveals the US
superstructure's incapacity to solve national debt crisis."
There is still a backlog of economic data that was put off due to
the government shutdown, including the big non-farm payrolls
report. Today, the government reported that initial claims for
unemployment insurance fell last week, but still came in higher
than expected. A total of 358,000 Americans applied for jobless
benefits last week, down from 373,000 in the previous week.
US stock index futures slipped this morning after yesterday's bump.
(INDEXDJX:.DJI) futures were down 0.35% at 15,195. Futures on the
(INDEXSP:.INX) fell 0.07% to 1,712.00 and
(INDEXNASDAQ:.IXIC) futures climbed 0.02% to 3,264.75. Spot gold
prices spiked 2.75% to $1,317.50.
In earnings news, Goldman Sachs beat analyst expectations. The
investment bank's earnings rose to $1.52 billion, or $2.88 per
share from $2.85 a year ago. This beat the average earnings
estimate of $2.47. The increase in earnings was mostly due to lower
expenses, as revenue fell 20% to $6.72 billion, which also fell
short of estimates. Goldman also announced that it is raising its
quarterly dividend by a nickel to $0.55.
) shares jumped 2.3% this morning after the telco reported
better-than-expected earnings. Profit rose 40% year-over-year to
$2.33 billion, or $0.77 per share in the third quarter, beating
estimates of $0.74. Over the quarter, Verizon announced that it
will buy the remaining 45% of Verizon Wireless for $130 billion.
) will report earnings after the closing bell today. Analysts
expect a 14% year-over-year rise in profit to $3.5 billion, or
$10.35 per share. However, investors will be just as interested in
the search giant's non-advertising revenue streams such as device
and app sales as the cost-per-click on desktop ads declines.