US FINANCIAL MARKET
- U.S. stocks rallied strongly at the open on Thursday, with each of the major indexes climbing more than 1 %, as investors were encouraged by signs of progress in fiscal negotiations in Washington.
- Chevron warned that its third-quarter earnings would be significantly lower than in the second quarter as fuel margins were squeezed.
- Natural gas pipeline operator Regency Energy Partners will buy rival PVR Partners for $5.6 billion, giving it a foothold in the prolific Marcellus and Utica shale fields.
- The U.S. Air Force expects to finalize a $2.2 billion contract with Lockheed Martin for two more advanced military communications satellites in coming weeks.
- HP CEO Meg Whitman expects revenue to stabilize in 2014 with “pockets of growth” before the business accelerates again in 2015.
- Gold will extend losses into 2014 amid expectations the Federal Reserve will pare stimulus as the U.S. recovers, according to Morgan Stanley, adding to bearish calls from Goldman Sachs and Credit Suisse.
- Meredith Whitney, who built her own Wall Street advisory firm after winning renown for a 2007 call on Citigroup, deregistered her brokerage unit after three unprofitable years and is setting up an investment fund.
- Oil prices clawed back a little ground Thursday, a day after a big drop precipitated by an increase in U.S. crude inventories. Oil prices have bounced between $101 and $104 a barrel after the U.S. government was forced to partially halt operations last week.
- U.S. shoppers continued to show caution in their spending in September, gravitating toward bargains, as political strife in Washington and slow job growth hurt their confidence with the start of the holiday season just weeks away. A group of nine retailers were expected to report a 3.1 % rise in September same-store sales, compared to a 5.5 % gain last year, according to Thomson Reuters. L Brands reported sales rose 1 % in September, missing Wall Street estimates of a 2 % gain. Zumiez, The Buckle, and American Apparel all said same-store sales declined last month, continuing a tough stretch for stores that cater to younger shoppers.
US ECONOMY & POLITICS
- Federal Reserve Vice Chair Janet Yellen, President Barack Obama’s pick to lead the U.S. central bank.
- The Federal Reserve’s shock decision last month not to reduce its support for the U.S. economy was a “relatively close call” for policymakers, according to minutes of the meeting. The minutes of the Fed’s September 17-18 meeting, released on Wednesday, clearly showed top officials were concerned their decision to keep buying $85 billion in bonds each month could muddle their messaging with investors who largely expected a reduction.
- According to a Republican leadership aide, U.S. House Republicans are considering agreeing to a short-term increase in the government’s borrowing authority, keeping a possible default after October 17 at bay and buying time for negotiations on broader policy measures. President Barack Obama and congressional leaders are set to meet Thursday for further discussions.
- House Republican leaders will present their members with a proposal to raise the debt limit for six weeks without policy conditions. The proposal wouldn’t end the partial government shutdown as Republicans try to shift the debate back to spending issues. Under the plan, the Treasury Department wouldn’t be able to use so-called extraordinary measures to further extend borrowing authority, creating a hard six-week limit.
- Initial claims for state unemployment benefits increased 66,000 to a seasonally adjusted 374,000, the highest since the end of March and well above expectations for 310,000 claims, though technical problems in California from computer upgrades were responsible for half the increase in claims.
- The financial clouds that settled over U.S. cities during the 2007-09 recession are lifting. 72 % of city finance officers believe their municipalities are better able to meet financial needs this year than they were last year.
EUROPE & WORLD
- China signs second-biggest swap line with ECB. The deal is the latest of a string of currency swaps that China has created with other nations to promote usage of the yuan in global commercial and financial transactions, with the ultimate goal of rivaling the dollar as a reserve currency. As China’s second-largest trade partner, Europe is a natural destination for Beijing in raising the yuan’s profile. The yuan is now the world’s eighth most-traded currency.
- Japan’s machinery orders jumped, the highest since the collapse of Lehman Brothers in 2008 and a sign of a strengthening economic revival. Orders excluding ships and power generation rose 5.4 % from the previous month.
- Brazil raised interest rates for the fifth straight time on Wednesday and gave no indication of backing off its battle with high inflation even as Latin America’s largest economy struggles to pick up speed. The central bank raised its benchmark Selic interest rate to 9.5 % from 9.0 % as expected by all but two of the 65 economists polled by Reuters last week.
TODAY in HISTORY
- The U.S. Naval Academy opened in Annapolis, Md (1845)
- The tuxedo dinner jacket made its debut at a ball in Tuxedo Park, N.Y. (1886)
- Fiji gained its independence from Great Britain (1970)
- Vice President Spiro Agnew resigned after being charged with tax evasion (1973)
Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.
This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.