Stocks revisit August levels as government shutdown enters 9th day
The continuing government shutdown and the approaching debt limit deadline are taking their toll on U.S. stocks. The Nasdaq and the S&P 500 are coming off their biggest one-day drops since August 27, and their lowest closes in a month. The Dow closed Tuesday at a 6-week low, with no visible progress on ending the ongoing DC deadlock.
Today brings another postponement of a government economic report, with the cancellation of the scheduled 10 a.m. ET release on August wholesale trade. However, we will get the minutes of latest FOMC meeting at 2 p.m. ET. The Energy Department will also be able to issue its weekly look at oil and gasoline inventories at 10:30 a.m. ET, and the Treasury will sell $21 billion in 10-year notes, with the results of that sale available shortly after 1 p.m. ET.
Non-government reports today include the Mortgage Bankers Association's regular Wednesday release on mortgage applications at 7 a.m . ET.
Retailer Family Dollar (FDO) is among the companies set to release quarterly earnings this morning, along with insurer Progressive (PGR) and industrial supplies maker Fastenal (FAST). Restaurant operator Ruby Tuesday (RT) will be on the short list of companies releasing earnings after today's closing bell.
Costco (COST) is a stock to watch today, reporting quarterly profit of $1.40 per share, six cents below estimates. September comparable store sales came in at a 3 percent increase, short of the 3.7 percent consensus estimate.
Alcoa (AA) reported quarterly profit of 11 cents per share, six cents above estimates, in its first quarterly report since being removed from the Dow Jones Industrial Average. Revenue was also above consensus, as auto parts revenue helped offset a decline in aluminum prices.
Yum Brands (YUM) earned 85 cents per share, excluding certain items, for its third quarter, missing estimates of 93 cents. Revenue also fell below analyst estimates, with the restaurant operator also warning that it will take longer than expected for sales in China to rebound.
Apple (AAPL) will hold an October 22 event to introduce a new version of the iPad, according to All Things Digital.
Men's Wearhouse (MW) is the target of a $2.3 billion takeover bid from rival clothing retailer Jos. A. Bank Clothiers (JOSB). The $48 per share cash offer is 36 percent above the Tuesday closing price for Men's Wearhouse shares. Jos. A Bank said Men's Wearhouse is currently reviewing its bid.
Wal-Mart (WMT) is ending its relationship with its India business partner, and putting plans for its own retail stores in that country on hold. Wal-Mart cites strict rules on local sourcing.
Starbucks (SBUX) is offering a free tall coffee to any customer who buys another person a beverage. It's part of a "come together" program that CEO Howard Schultz said is designed to send a message to the country's elected officials.
JPMorgan Chase (JPM) may reportedly cut back on lending to certain types of businesses, as it seeks to repair and protect its reputation. The Wall Street Journal said the bank has launched an internal review of its commercial lending clients.
H&R Block (HRB) is ending a planned sale of its banking assets to a unit of Republic Bancorp, because of delays in an approval decision from the Office of the Comptroller of the Currency. The nation's largest tax preparer plans to discuss further details in a conference call this morning.