Stocks are inching lower this morning as investors take profits
following Wednesday's sharp rally.
S&P 500 futures are down about two-tenths of a percent and have
been rebounding in the last hour. Europe is posting similar
declines, while Asia was mostly higher in the overnight session.
The S&P 500 surged 1.4 percent yesterday as politicians in
Washington agreed to raise the country's debt ceiling and reopen
the government. The index has run 4.5 percent over the space of
just six days. It began that move by testing support at its 100-day
moving average, the third time this year it bounced sharply from
that key level. The benchmark is back within striking
distance of its all-time high from mid-September, while the Russell
2000 small cap index closed at a record level.
Attention will now focus on economic news and corporate earnings.
Investors also face the unusual situation of receiving reports such
as monthly retail sales and non-farm payrolls long after their
normal releases because of the government shutdown, so there could
be delayed reaction to numbers that should have been known earlier.
Initial jobless claims will be announced at 8:30 a.m. ET, followed
by the Philadelphia Federal Reserve's regional activity index at 10
a.m. China will also announce gross domestic product, industrial
production and retail sales tonight, which could have a big impact
Earnings from major companies have also been modestly disappointing
so far. Last night, International Business Machines missed revenue
estimates by more than $1 billion, triggering a 7 percent decline
in the stock. EBay issued a weak outlook and is down 6 percent.
SandDisk inched higher on a strong report, but Select Comfort
plunged more than 20 percent after profit and revenue missed
This morning's big reports include Goldman Sachs and UnitedHealth,
which both fell after revenue lagged consensus.
Commodities and currencies have a mildly bearish tone, with
economically sensitive oil down about half a percent and copper
lower by almost 1 percent. Precious metals rebounded on short
covering. The euro continued to advance, but the safe-haven
Japanese yen was strong across the board.