Futures Turn Lower After GDP Report
Futures edged lower Tuesday following a lower-than-expected GDP figure and following the previous session’s sharp sell off.
The U.S. economy grew at a slightly slower pace than previously estimated in the third quarter, but weak inventory accumulation amid sturdy consumer spending strengthened views output would pick up in the current quarter.
Gross domestic product grew at a 2.0 percent annual rate in the third quarter, the Commerce Department said in its second estimate on Tuesday, down from the previously estimated 2.5 percent.
Stocks plunged sharply in the previous session, as the lack of progress in dealing with heavy debt both in the United States and Europe further sapped investor confidence in equities.
Meanwhile, ratings agencies Moody’s and Standard & Poor’s said there were no immediate plans to downgrade the credit rating of the U.S. following the failure of a bi-partisan Congressional “super committee” to reach agreement on reducing the US budget deficit.
But Fitch, the third leading ratings agency, which currently has the most positive rating of the three on U.S. debt, said it could cut the outlook on its "triple-A" rating, with a downgrade an outside possibility.
Also on the economic front, the minutes of the Fed meeting on interest rates on November 2 are due out at 2 pm ET and are likely to be read carefully for signs that the Fed considered some form of quantitative easing.
In Europe, yields jumped dramatically in an auction of three-month and six-month Spanish treasury bills, with investors still nervous despite a victory of the center-right against socialists in elections last Sunday.
Hewlett-Packard slipped after the tech giant reported that profit tumbled nearly 91 percent on weak computer sales.
Campbell Soup posted higher-than-expected earnings and reaffirmed its forecast for the fiscal year.
Video rental company Netflix said it raised $400 million in fresh capital by selling convertible debt to long-time backer Technology Crossover Ventures and stock to funds managed by T. Rowe Price.
U.S. regulators have informed Bank of America's board that the company could face public enforcement action if they are not satisfied with recent steps taken to strengthen the bank, the Wall Street Journal reported, citing people familiar with the situation.
Lockheed Martin has won a U.S. Air Force contract potentially worth $7.4 billion for upgrades to its problem-plagued F-22 Raptor fighter jet, designed to be the premier U.S. combat plane.
Samsung Electronics, the world's top TV maker, is in last-stage talks with Google to roll out its Google TVs, the head of Samsung's TV division told reporters on Tuesday.
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On Tap This Week:
TUESDAY: 5-yr note auction, FOMC minutes
WEDNESDAY: Weekly mortgage applications, durable goods orders, personal income & outlays, jobless claims, consumer sentiment, oil inventories, 7-yr note auction, Super Cmte. must vote on detailed recommendations; Earnings from Deere
THURSDAY: Thanksgiving Day: All US markets closed
FRIDAY: Black Friday, NYSE early close, Fed balance sheet, money supply, USDA food prices outlook
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