Global shares fall as debt-cap rally fades. Global equities were mostly lower at the time of writing after Congress approved a deal to finance the U.S. government until January 15 and raise the debt limit so that the country can continue to increase its borrowing until February 7. Markets rose yesterday in anticipation of the agreement, but the short-term nature of the agreement has investors wary of another standoff in a few months. As you'd probably expect, some pork has found its way into the legislation that President Obama signed.
IBM shares tumble following bad sales miss. IBM's (NYSE:IBM) shares slumped 5.8% in premarket trading after the IT giant reported that Q3 revenues fell for the sixth quarter in a row, slipping 4% on year to $23.7B and missing consensus by over $1B. Sales were hurt by a 22% slide in China, where hardware revenue plunged 40%, with a rebound in demand not expected until after Q1 2014. Still, EPS of $3.99 beat Street forecasts, while net profit rose 6% to $4.04B.
eBay's shares drop after it warns of softening in U.S. eBay's (NASDAQ:EBAY) Q3 net profit rose 15.4% to $689M and EPS of $0.64 beat analyst expectations, while revenue grew 14% to $3.89B but missed consensus. eBay's shares dropped 4.2% premarket after the company gave guidance that was below analyst forecasts, which it blamed on a considerable softening in the U.S. e-commerce market and higher investment. However, PayPal's growth remained strong, with sales +19% to $1.62B in Q3.
Top Stock News
KPN CEO: Talks with America Movil could be revived. Although America Movil (AMOV, AMX) has withdrawn its €7.2B ($9.7B) bid for KPN (OTCPK:KKPNY) because of a disagreement over price, the deal may not be dead, the CEO of the Dutch telecom group has indicated. "I'm not going to say which price we wanted because there is a possibility that we will be sitting around the table again," Eelco Blok said. Despite the prospect of renewed talks, KPN shares were -8.35% in Amsterdam at the time of writing.
Google's earnings seen rising strongly. Google's (NASDAQ:GOOG) Q3 earnings are due out after the bell, with analysts forecasting that EPS grew to $10.35 from $9.03 last year while revenue jumped 31% to 14.82B. Expectations are "lower than typical," says Deutsche's Ross Sandler, as the transition to Enhanced Campaigns search ad platform - creating integrated PC/mobile campaigns - is expected to pressure prices and clicks over the near-term. Nonetheless, Sandler sees strong international numbers allowing Google to beat estimates.
Roche Q3 sales +8% to 11.57B francs. Roche's (OTCQX:RHHBY) sales climbed 8% to 11.57B Swiss francs ($12.63B) in Q3, just above consensus of 11.54B francs. The main drivers for Roche's growth over the whole of this year have included its breast-cancer drugs such as Avastin and Actemra/RoActemra. The Swiss pharmaceuticals company expects full-year sales to rise in line with 2012, when revenues climbed 7%. It also forecast that EPS will increase faster than sales.
Lockheed Martin to cut 600 jobs amid tough market. Lockheed Martin (NYSE:LMT) intends to lay off 600 employees at its Mission Systems & Training Division this month. The plan is not linked to the government shutdown, but instead stems from a lackluster business environment. This includes "continued uncertain program funding, delays in contract awards and an extremely competitive market," Lockheed Martin said.
SEC loses Cuban insider-trading case. A Texas jury has cleared billionaire Mark Cuban of insider trading by using a private tip to sell shares in Internet search company Mamma.com in 2004 and thereby avoid a loss of $750,000. While the stakes were relatively low, the loss is a high-profile one for the SEC, which brought the case. The question now is whether the result will encourage other SEC targets to fight any charges against them rather than settling.
Top Economic & Other News
U.K. retail sales return to monthly growth. U.K. retail sales rose a greater-than-expected 0.6% on month in September, recovering from a fall of 0.8% in August and supporting hopes that the economy will have grown strongly in Q3. However, there are those who are cautious. "U.K. retail sales are holding up very well, but wage growth is negligible and workers' real pay cuts continue month after month. Sustainable?" tweeted Reuters' Jamie McGeever.
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In Asia, Japan +0.8% to 14587. Hong Kong -0.6% to 23095. China -0.2% to 2189. India -0.6% to 20416.
In Europe, at midday, London -0.2%. Paris -0.4%. Frankfurt -0.6%.
Futures at 6:20: Dow -0.35%. S&P -0.2%. Nasdaq -0.1%. Crude -0.5% to $101.77. Gold +1.9% to $1306.80.
Ten-year Treasury Yield -3 bps to 2.63%
Today's economic calendar:
8:30 Initial Jobless Claims
9:15 Industrial Production
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: ADS, APH, BAX, BBT, BGG, BTU, BX, CY, DGX, DHR, DOV, FCFS, FCS, FITB, GS, HBAN, HLSS, MTB, NUE, ORB, OSTK, PENN, PM, PPG, SNA, SON, SVU, SYNT,TSM, TZOO, UNH, UNP, UTEK, VZ, WGO
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