Potential end to government gridlock boosts stocks
Global stocks are getting a boost this morning following hopeful signs from a meeting between the President and House Republicans, with the two sides trying to resolve the ongoing government shutdown and approaching debt limit deadline. The Dow is coming off its second best percentage gain of the year and best point gain.
Hope aside, the government remains shut down, meaning investors will not get a look at several reports that had been scheduled for today, including September retail sales, September producer prices, and August business inventories. However, the University of Michigan's preliminary October consumer sentiment index will be out at 9:55 a.m. ET, with economists looking for a reading of 76.0, compared to the September's final 77.5.
Earnings season begins in earnest today, with JPMorgan Chase (JPM) and Wells Fargo (WFC) both out with quarterly numbers this morning. JPMorgan is expected to be out with its numbers at 7 a.m. ET, while Wells Fargo's quarterly report will come an hour later.
JPMorgan Chase (JPM) is also a stock to watch, even before its earnings are out, with the bank saying it has sold all exposure in its money market funds to short term U.S. government debt. That follows similar moves by other money market mutual funds.
Gap (GPS) reports September same-store sales fell 3 percent, compared to the 1.6 percent gain expected by analysts. CEO Glenn Murphy said September was "somewhat challenging" but that the company remains committed to meeting its full-year goals.
Micron Technology (MU) reported fiscal fourth quarter profit of 20 cents per share, excluding certain items, five cents below estimates. Revenue did beat expectations, but investors are focusing on an ongoing increase in memory chip prices because of a September fire at a Hynix plant that's constrained supplies.
Safeway (SWY) earned 10 cents per share, excluding certain items, six cents below estimates, though revenue exceeded expectations. The grocery chain also announced it will leave the Chicago market by selling its 72 Dominick's stores in that area. Activist investor Jana Partners has been pushing Safeway to reevaluate its presence in certain regions, including Chicago.
SunTrust Banks (STI) will pay about $1.2 billion to settle several mortgage-related cases with government agencies. The settlement will result in a $179 million after-tax impact on third quarter earnings.
Agrium (AGU) is drawing praise from Jana Partners, even as Jana cuts its stake in the fertilizer producer to 2.7 percent from 7.5 percent. Jana said it's pleased with Agrium's moves to returning cash to shareholders and improving its overall operations. Jana said the decision to cut its stake was part of an evaluation of its overall portfolio.
Potash (POT) said it expected third quarter earnings of about 41 cents per share, six cents below analyst estimates. The cut was made in response to lower than expected potash sales.
Toyota (TM) was found not liable for the death of a California woman in one of the unintended acceleration cases against the automaker. Experts say this could influence the outcome of more than 80 similar suits around the country.