Stock Futures Higher as Senators Try to Soothe Markets
NEW YORK (TheStreet) -- Stock futures were edging higher Wednesday as Senate Majority Leader Harry Reid tried to assure markets that he and Senate Minority Leader Mitch McConnell were moving toward a deal to end the partial government shutdown that has now entered its 16th day.
A failure to reach a deal by Thursday to raise the country's debt level could push the government into a default. House Speaker John Boehner has said he would try to fast track the Senate bill following Tuesday's collapse of a House proposal.
Futures for the S&P 500 were rising 10.25 points, or 10.09 points above fair value, to 1,702.25. Futures for the Dow Jones Industrial Average were gaining 95 points, or 94.99 points above fair value, to 15,190. Futures for the Nasdaq were adding on 15 points, or 18.99 points above fair value, to 3,255.75.
Generally it's expected that Congress will pass a short-term resolution where the government opens until January 15, 2014 and the debt ceiling is increased until February 7, 2014.
"The message is pretty clear," Nicholas Colas, the chief market strategist at New York-based brokerage company ConvergEx Group advised the more jittery investors in a morning note. "Sell consumer stocks and buy corporate bonds if you think Washington is nowhere near close to resolving its differences. Avoid tech stocks and industrials, but precious metals are OK."PNC Financial Services (PNC) was rising 0.81% to $73.10 after the Pittsburgh-based lender beat third-quarter earnings estimates on the top and bottom line, as the company was able to book earnings growth in an environment where revenue fell about 7% from year-ago levels. U.S. Bancorp (USB) on Wednesday reported very solid growth of average loans, at an annualized pace of nearly 9%. The Minneapolis lender reported third-quarter earnings of $1.468 billion, or 76 cents a share, compared to $1.484 billion, or 74 cents a share, in the second quarter, and $1.474 billion, or 74 cents a share, in the third quarter of 2012.
Comerica (CMA) of Dallas reported a decline in average loans but also beat analysts' third-quarter earnings expectations. The bank reported Wednesday third-quarter earnings attributable to common shares of $145 million, or 78 cents a share, increasing from $141 million, or 76 cents a share, in the second quarter, and $116 million, or 61 cents a share, in the third quarter of 2012. In other corporate headlines, Berkshire Hathaway (BRK.B) was edging marginally higher to $115.16 after U.K. engineering group IMI plc said Wednesday it had agreed to sell two consumer-oriented businesses to Berkshire's Marmon Group LLC for $1.1 billion as it hones its focus on industrial flow-control products and systems. Economic reports expected Wednesday include the National Association of Home Builders' housing market index for October at 10 a.m. EDT and the Federal Reserve's Beige Book report at 2 p.m. The housing market index is expected to have remained unchanged at 58 from September. The consumer price index indicator that was originally scheduled for Wednesday won't be released given that the Bureau of Labor Statistics has been affected by the shutdown. Overseas markets remained jittery as they awaited a last-minute deal in Washington. The DAX in Germany was down 0.14% while the FTSE in London was off 0.55%. The Nikkei 225 in Japan settled up 0.18% and the Hong Kong Hang Seng fell 0.46%. November crude oil contracts were up 14 cents to $101.35 a barrel. December gold futures were gaining $7.90 to $1,281.10. The benchmark 10-year Treasury was slipping 2/32, raising the yield to 2.741%. The dollar was off 0.1% to $80.40 according to the U.S. dollar index. -- Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.>
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