Stock futures point lower this morning after a weak showing in equities markets worldwide. European stocks are trading lower, and Asian markets were mostly down overnight. Volatility will no doubt be the tone of the day, as the Fed starts its two-day meeting. Durable goods fell 2.8%, below expectations. The dollar slid after the report and Treasurys rallied.
The Dow closed 14 points lower yesterday after another tumultuous day that saw it soar as much as 100 points early in the day. Just like Monday's session, trading was marked by an afternoon witching hour when prices turned. The market moved lower mid afternoon as rumors of troubles with mortgage debt and credit quality swamped stocks. In the first two days of the week, the Dow is off just a total 22 points, but someone not watching CNBC all day might have missed the Dow travel several hundred points in volatile trading. The Nasdaq was down just about three points yesterday, and S&P 500 was down nearly five points.
"It's the end of the quarter. That's what matters. We're going to see some volatility. That may be one of the reasons things are getting weird at 2 o'clock," says CNBC's Bob Pisani.
Coinciding with yesterday's selling were comments from SEC Chairman Christopher Cox that the commission has opened 12 enforcement investigations into matters involving collateralized debt obligations.
"The bears basic position is now that there's not just one investigation. There's at least a dozen going on, and someone's going to find something," Pisani said.
In the market's focus once more is Bear Stearns, reported to be the target of a preliminary inquiry by the SEC because of its troubled hedge funds. Bear Stearns said in a statement to the London Stock Exchange today that its Bear Stearns Private Equity does not have any exposure to its hedge funds and is managed and administered by a separate team. Bloomberg news service today takes a look at how the firm assigned its top mortgage trader Thomas Marano to help manage the bailout of one of its faltering fund.
The 10-year this morning was yielding 5.05%, below the 5.102% of yesterday afternoon.
"I think it will be quiet," said CNBC's bond market expert Rick Santelli. "Traders absolutely hate these two-day meetings. It's like a waiting game." The Fed is not expected to take any action on rates but traders are hoping it will modify its language on inflation to remove the word "elevated," which could be a springboard to a stock rally. Santelli has been advising we watch the yen dollar trade, and this morning Reuters says there is concern that a rising yen signals liquidity fueling the equities markets could dry up.
CNBC Wealth Survey
Forty-eight percent of Americans surveyed in the quarterly CNBC Wealth in America Report say they are not taking a summer vacation and those that do plan to spend less than they did a year ago. About 55% say they are driving less because of high gasoline prices. CNBC's Steve Liesman will report on the survey all day today.
Deal or No Deal?
We all want to know about the health of the merger business, and we should be hearing from some of the Street's biggest deal makers attending the Wall Street Journal's Deals and Dealmakers conference today. CNBC will be broadcasting from the conference all day and CNBC.com will have live blog comments from Goldman Sachs CEO Lloyd Blankfein and also Treasury Secretary Hank Paulson. Live feeds from the conference will be available all day on CNBC.com.
OPEC President Mohamed Al Hamli said at a Cambridge Energy conference in Istanbul that efforts by oil consuming nations to cut their dependence on crude will hurt the ability of OPEC to guarantee future supplies. CNBC Global Energy Analyst Daniel Yergin is hosting the event. Oil is weaker today after prices fell sharply yesterday to $67.77 per barrel, or off $1.41.
Living Up to the Hype?
Several reviews are out on the iPhone ahead of Friday's launch and for the most part, they are good. Check out the special report on iPhone on CNBC.com.
Petro-Canada followed U.S. oil majors Conoco and Exxon out the door as Venezuela grabbed control of heavy crude projects in the Orinoco belt, giving its state-owned oil company PdVSA majority control. Venezuela's energy minister says he has extracted deals from BP, Chevron and Total allowing them to continue operating in the country.
Around the World
U.K. Prime Minister Tony Blair ends his 10 years in office today, handing the government to Gordon Brown, chancellor of the exchequer.