GE Mulls Finances and Bernanke Spooks the Markets: Morning Buzzers
U.S. stock futures declined on Thursday morning following a massive sell-off in global markets. Japan’s Nikkei plunged 7.32 percent because of a cocktail of factors, but the primary catalyst seems to be Chairman Ben Bernanke’s testimony before Congress on Wednesday. Initial claims for unemployment insurance for the week ended May 18 fell 23,000 to 340,000, slightly better than expectations. The four-week moving average declined 500 to 399,500.
Futures at 8:35 a.m.: DJIA: -0.74%, S&P 500: -0.94%, NASDAQ: -0.87%.
Here’s what’s buzzing on Thursday morning:
Hewlett-Packard (NYSE:HPQ) closed the regular session up 0.65 percent and climbed as much as 11.63 percent higher in pre-market trading after reporting fiscal second-quarter earnings that beat expectations. Net revenue declined 10 percent on the year (9 percent after adjusting for currency) to $27.6 billion, beating the average estimate of $28.12 billion. Adjusted diluted earnings declined 11 percent on the year to $0.87 per share, beating the average analyst estimate of $0.81 as well as its own guidance for earnings in a range between $0.80 and $0.82 per share… (Read more.)
Ford (NYSE:F) will add an additional 200,000 units of annual straight-time capacity this year, the company said on Wednesday. In addition, Ford will produce an extra 40,000 units by idling select plants for only one week during what has been the traditional two-week summer shutdown. This news came right before an announcement on Thursday from Ford Australia that the company will cease local manufacturing by October 2016. The decision was driven by “increasingly challenging market conditions – including market fragmentation and the high cost of manufacturing. Ford losses in Australia in the last five years have totaled approximately $600 million [Australian dollars].”
Dollar Tree (NASDAQ:DLTR) climbed as much as 2.13 percent in pre-market trading after reporting earnings that came in ahead of expectations. Revenue climbed 8.26 percent on the year to $1.87 billion, in line with the average estimate. Adjusted earnings increased 18 percent to $0.59 per share, beating the average analyst estimate of $0.57 per share.
General Electric (NYSE:GE) CEO Jeff Immelt is reportedly mulling over the fate of its capital arm. Speaking at a conference in Florida, Immelt suggested that the company could list its consumer finance division and use the money to fund share buybacks and strengthen its industrial operations.
How Ben Bernanke Spooked the Market: The stock market was off to a bullish start in the morning as investors assumed that the testimony of Federal Reserve Chairman Ben Bernanke before the Joint Economic Committee would soothe their nerves about the fate of the quantitative easing program. However, during the question and answer session, Bernanke remarked that the FOMC could begin to taper back its bond purchases if economic data warranted it. The mere possibility that Operation Taper could begin during the “next few meetings” obviously gave investors the jitters as the major stock indices immediately began to slide down from their record intraday highs… (Read more.)
Bernanke’s Testimony: Is Congress Failing the Economic Recovery? Wherever Bernanke goes, he can’t escape federal fiscal policy. The federal deficit and growing debt crisis have defined the post-crisis political environment in America. Ideological budget warfare has given birth to the sequestration spending cuts, which are arguably the largest drags on U.S. economic growth. Combined with the expiration of tax holidays and explicit tax increases, federal fiscal policy has co-dominated economic conversation in the U.S. alongside the Federal Reserve’s monetary policy, so it’s unsurprising that Bernanke would include it in the highest-level overview of the current economic situation… (Read more.)
You can follow Dan on Twitter (@WSCS_Dan)
Don’t Miss: Here’s How Ben Bernanke Spooked the Market.