Anyone know why futures are weaker...anyone? Futures are weaker as President Obama's imposition of a 35 percent tariff on auto and light truck tires from China has traders worried about a potential trade war. China has respondedby probing the alleged dumping of American auto and chicken products.
Anti-tariff buffs, predictably, are dragging out the old Ben Stein lines from Ferris Bueller's Day Off: "In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression..."
Not surprisingly, Goodyear Tire is up 4 percent pre-open, Cooper Tire and Rubber up 3 percent, while poultry processors like Tyson are down on light volume.
Elsewhere:
1) Tenet Healthcare up 7 percent pre-open, raised full year EBIDTA guidance to $900-$950 million, from $810-$875 million. Volumes have grown slightly more than expected, bad debts are lower, and better trends in payer and patient mix were all helpful.
2) Sprint Nextel up 20 percent pre-open on a report from Britain's Sunday Telegraph that said that Deutsche Telekom had hired Deutsche Bank to help them consider a bid for the company.
The Street is skeptical of this: 1) rumors about Sprint-Nextel deals have been around for years, and nothing has happened, 2) Sprint would demand a premium, which would cost DT billions, 3) why would DT not simply try to improve T-Mobile USA's operations organically? 4) Why try to combine two operators that are struggling, with two different technologies?
Anyone?
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