Executive Shakeup, Bullish Earnings, and the Fiscal Cliff: Market Recap
The U.S. equity markets closed down Wednesday on Wall Street:
S&P 500: -0.40%, Nasdaq: -0.70%, Dow: -0.46%.
On the commodities front, Oil (NYSE:USO) dropped 0.41 percent to $85.22 per barrel. Precious metals also dropped, with Gold (NYSE:GLD) falling 0.35 percent to $1,724.90 per ounce, and Silver (NYSE:SLV) falling 0.22 percent to $32.45 per ounce about seven minutes after the bell.
Steven Sinofsky, a 23-year veteran at Microsoft (NASDAQ:MSFT) who was widely presumed to be a favorite for the chief executive’s position in the near future and was the man behind the company’s recently launched Windows 8 operating system, has left the software maker. The move was completely unexpected and many are wondering if it was part of a process by current chief executive Steve Ballmer to get a firmer hold on the company. Shares closed down 3.22 percent. (Read more.)
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On Tuesday, The Home Depot (NYSE:HD) announced impressive financial results for the third quarter. The world’s largest home improvement specialty retailer earned $947 million (63 cents per share), compared to $934 million (60 cents per share) a year earlier. Home Depot has now surprised to the upside in seven of the past eight quarters, with the one exception being this year’s first quarter that came in line with estimates. Between these earnings and recent economic indicators, the company seems to be building a bullish stance on the recovery of the housing market. Shares closed up 3.63 percent. (Read more.)
With just seven weeks until the fiscal cliff, Congress assembled on Tuesday to begin what may become the most closely watched session this year. An estimated $560 billion in spending cuts and tax increases set to automatically trigger at the end of the year could cut GDP by four percentage points, and raise unemployment by one if a solution is not found beforehand. With the dust of the election settling, banks such as JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) are pointing at the fiscal cliff as the single largest roadblock to economic growth. (Read more.)
There’s good news and bad news about Greece. The good news is that the country managed to raise at least 4 billion euros ($5 billion) from an auction of one-month and three-month T-bills, and will be able to pay off 5 billion euros ($6.3 billion) worth of debt that comes due later this week. The bad news is that disagreement among Greece’s creditors is heating up and raising concerns that decision making will be delayed. Eurozone officials are apparently in open disagreement about the right strategy and timeline to bring down Greece’s overall debt. (Read more.)
Don’t Miss: These 4 Mega Banks Weigh in on the Fiscal Cliff.