US Stocks Continue Higher Despite Poor Wal-Mart, Cisco Results


Eurozone and Japanese economic growth decelerated in the third quarter. The preliminary estimate of Q3 GDP in the eurozone rose 0.1% from the prior quarter. Japanese GDP rose 0.5% quarter-over-quarter, better than the 0.4% rate estimated by economists. The Japanese Nikkei (INDEXNIKKEI:NI225) finished 2.12% higher, though some of the gains were likely attributable to the late day gains by US equities yesterday. European stock indices were generally higher.

Federal Reserve Chairwoman-Elect Janet Yellen gave testimony today before the Senate Banking Committee. Her comments largely stuck to the existing rhetoric that the FOMC led by Ben Bernanke has adopted, though Treasuries and US stocks did rally during the hearing. The Senate committee will vote to confirm her nomination as early as next week.

US equities opened at the flatline and drifted higher throughout the day. The S&P 500 (INDEXSP:.INX) closed up 0.45%, led by linear gains in materials, utilities, financials, health-care, and consumer-related stocks. The tech sector was the sole decliner, undoubtedly due to tertiary damage from the sizable earnings miss from Cisco ( CSCO ) last night.

It is worth mentioning that there is a large amount of open interest in the SPX 1800 calls expiring tomorrow, which could be causing the 1800 strike to act as a magnet.

Weekly jobless claims fell to 339,000 from last week's 341,000. Economists had been looking for 330,000. The US September trade deficit expanded to $41.8 billion, largely due to an increase in net real goods imports. This was $2.8 billion more than economists had estimated. All else equal, the updated data should cause US third quarter annualized GDP to be revised lower by 0.3%.

President Obama announced changes to the Affordable Care Act to allow consumers to keep cancelled plans for one year while problems were worked out with the existing system. The insurance industry cautioned that the change could lead to higher premiums for existing customers.

Wal-Mart ( WMT ) reported earnings before the market opened, beating earnings by $0.01 at $1.14 and missed revenues at $115.69 billion vs $116.82 billion estimates. The company said that US comp sales growth would be zero for the current fiscal year 2014. Additionally, the company's earnings and revenue growth were below estimates. Wal-Mart initially traded down 2%, but recovered all of the losses to close in positive territory.

Tomorrow's Financial Outlook

The Federal Reserve will publish October industrial and manufacturing production figures in the morning. Thus far, October economic data has not been measurably worse despite the government shutdown. Economists are expecting industrial production to grow 0.2% from the prior month.

Twitter (NYSE: TWTR ) options will open for trading tomorrow on the CBOE. The options will list between $35 and $50 with $1 intervals between the strikes.

The only notable global economic data release is the eurozone's October consumer price index.

There are no major earnings reports scheduled for tomorrow.

Twitter: @Minyanville

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: CSCO , TWTR , WMT



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