Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:40 AM ET
S&P 500: +15.25; 1,476.75
NASDAQ 100: +16.50; 1,991.25
Dow: +101.00; 13,380.00
NIKKEI 225: +2.57%; 16,569.09 (+415.27)
HANG SENG: +2.13%; 23,984.14 (+499.60)
SHANGHAI SE COMPOSITE: +0.99%; 5,218.82 (+50.94)
BSE SENSEX 30: +1.30%; 15,318.60 (+196.86)
FTSE 100: +0.73%; 6,257.10 (+45.10)
CAC 40: +1.33%; 5,666.66 (+74.13)
XETRA-DAX: +0.88%; 7,586.38 (+66.44)
Commodity Futures (Reuters/Jefferies CRB)
Oil: +0.63%; $73.82 (+$0.46)
Gold: +0.82%; $679.40 (+$5.50)
Natural Gas: +1.77%; $5.74 (+$0.10)
Silver: +2.17%; $12.22 (+$0.26)
U.S. Breaking Newssee today's Wall Street Breakfast for earlier news
Bush to Introduce Plan to Save Mortgage Markets
European stock markets and U.S. futures rallied Friday morning on media reports the Bush administration is ready to introduce measures to help stem a growing wave of mortgage defaults, and a scheduled speech by Fed chairman Ben Bernanke. President Bush, who speaks shortly after 11 a.m. ET, will announce the FHA (Federal Housing Administration), which insures mortgages for low to middle-income borrowers, will now be able to insure delinquent loans, allowing borrowers to avoid foreclosure and enabling them to refinance at better rates, a Bush official told Bloomberg anonymously. Delinquent loans are currently ineligible for FHA insurance. Under the new plan they will be eligible -- if borrowers have fallen behind because of a monthly-payment increase, the Washington Post reported. Such increases have led to a rash of defaults as adjustable-rate mortgages issued from 2004 to 2006 roll over. The change will affect borrowers at least 90 days in arrears, allowing them to retain their homes, the Bush official said. Bush will also push proposals to give tax breaks to homeowners who refinance, he said. However, the president still opposes relaxing the mortgage-lending caps on government-sponsored lenders Freddie Mac and Fannie May, who have said they could add market liquidity by buying more of the mortgages shunned by investors. Bush has faced criticism over a lack of action to prevent spreading foreclosures: "The Federal Reserve's interest-rate reductions alone can't fix the problem," economist Peter Meister said, calling Friday's moves a positive for the economy as a whole. Fed Chairman Bernanke is due to speak at 10 a.m. ET at a gathering of central bankers. He is under pressure to give some indication of future interest rate moves, which many anticipate will be dropped in the coming months. "Our economists now expect the Fed to cut rates by 75 basis points before the end of the year," Citigroup said in a note. "Fed fund cuts have generally been positive for global equity markets."
Sources: Bloomberg, Wall Street Journal, Washington Post
Commentary: Will a Bernanke-Bush One-Two Lift the Markets Ahead of the Holiday Weekend? • Why Do Fed Bankers Meet in Ritzy Jackson Hole? • All Eyes Are on Ben Bernanke as Volatility Returns to the Market
Stocks/ETFs to watch: SPY, DIA, AGG, FRE, FNM
Apple to Unveil Ringtones for iPhone -- NY Post
The New York Post reports multiple sources say Apple is developing an offering with major music labels (ex-Universal) to sell ringtones for iPhones via iTunes. Details of pricing were not given, but the service is expected to be introduced when Apple announces its new iPods, which some believe will happen September 5 (full story). The ringtones will reportedly be sold as enhanced downloads, with a feature allowing for personalized ringtones instead of only pre-determined samples like those sold by wireless carriers. Songs previously purchased on iTunes will be convertible to ringtones. Apple CEO Steve Jobs has forecast 1 million iPhones will be sold by the end of the current quarter and 10M units will be sold by end of next year. The U.S. market for ringtones has grown to $600M, compared to $68M in 2003. Separately, the NY Post says Amazon has "tentatively set a mid-September target for the launch of its long-anticipated music service," according to sources. Songs will be sold in iPod-compatible non-DRM MP3 format, with about one million tracks available at launch. Amazon is expected to charge $0.99 for new and popular tracks and $0.89 for emerging artists and back catalog tracks. Apple charges $0.99 for tracks with DRM and $1.29 for unrestricted tracks.
Sources: New York Post I, II, Silicon Alley Insider
Commentary: Goldman: New iPods Due Soon, Another Reason to Own Apple • Expect New iPods on Sept. 5 • Amazon.com's DRM-Free Music Store May Reshape Market
Stocks/ETFs to watch: AAPL, AMZN
Earnings call transcript: Apple F3Q07, Amazon.com Q2 2007
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
Today's Market (via Sam Collins, ChangeWave.com)
Recap of Yesterday's Action
Nervousness is in the air today, over what Federal Reserve Chairman Ben Bernanke may or may not say, and the effects of the uncertainty were even felt Thursday, as markets closed mixed and slightly lower.
But before the opening some unexpected good news hit the tape -- a revised (upward) GDP number. At 8:30 a.m., the Commerce Department raised the Q2 number to 4.0% from a previously reported 3.4% rate.
But after a brief rally, that good feeling ended in over Bernanke's impending speech and a report that the U.S. commercial paper market fell for a third straight week -- the biggest slump since 2000.
However, technology stocks performed well with Apple (NASDAQ:AAPL) rising by $2.17 and Dell (NASDAQ:DELL) up 60 cents, which resulted in a positive day for the Nasdaq. But the financial stocks took another beating, as did retail stocks with shares of Wal-Mart (NYSE:WMT) falling after Merrill Lynch (MER) cut it to an outright "sell"
At the close, the Dow Industrials were down 51 points at 13,239, the S&P 500 was off six to 1,458, but the Nasdaq gained two to close at 2,565. The NYSE traded 1.2 billion shares and the Nasdaq traded 1.8 billion, with decliners outdoing advancers by about 17-to-12 on both exchanges.
Crude oil (October contract) lost 15 cents closing at $73.36 a barrel, and the Amex Energy SPDR (NYSEARCA:XLE) gained 5 cents at $68.90. The December gold contract fell by $1.50 to $673.90 per troy ounce, and the Philadelphia Gold/Silver Index [XAU] fell by 50 cents to $137.16.
What the Markets Are Saying
The big question is: Will the reversal of Aug. 16 hold? With the sentiment indicators strongly negative (a contra-indicator) -- and therefore bullish -- and the corporate insiders buying stocks (also bullish), it looks like the cards are stacked in favor of the bulls.
Now the charts of the S&P 500 and the Nasdaq are forming what looks to be a reversed head-and-shoulders formation, and that's bullish too. For now it looks like another case of "Be long or be wrong."
Today's Trading Landscape
There are no significant earnings due today but the focus will be on economic reports. The main event will, of course, be Chairman Bernanke's speech at Jackson Hole -- a prelude to the next Fed meeting on Sept. 18.
However, we’ll also get personal income figures (the consensus expects 0.3%), personal spending data (the consensus expects 0.4%), the core Personal Consumption Expenditures (PCE) price inflation figure (the consensus expects 0.2%), the Chicago PMI (the consensus expects 53), the July factory orders report (the consensus expects 1%), and the University of Michigan consumer confidence survey (the consensus expects 82.5) will all be reported today.
The bond markets will close early for the Labor Day weekend. Dell, Inc. (DELL) reported better-than-expected earnings prompting talk of a big turnaround at the former biggest personal computer maker. The pre-opening looks higher as a result of an expected plan by President Bush to help stem a tide of mortgage defaults.
Asian Headlines (via Bloomberg.com)
• Asian Stocks Climb Ahead of Bush Measures to Help U.S. Subprime Borrowers Asian stocks rose to a three-week high ahead of an announcement by U.S. President George W. Bush of measures to help subprime-mortgage borrowers.
• India's Economy Unexpectedly Quickens, Adding Pressure for Rate Increase India's economic growth unexpectedly accelerated last quarter, stoking inflation concerns that may force the central bank to raise interest rates further. Stocks and the rupee extended gains.
• Quanta Second-Quarter Net Doubles on Laptop Sales to Hewlett-Packard, Dell Quanta Computer Inc., the world's largest maker of notebook computers, reported second-quarter profit doubled on sales of laptops to customers including Hewlett-Packard Co. (NYSE:HPQ) and Dell Inc. (DELL).
• Japan's Consumer Prices Fall as Deflation Persists; Factory Output Drops Japan's consumer prices declined for a sixth straight month in July, showing that the world's second- largest economy has yet to overcome a decade of deflation. Industrial production and household spending dropped.
European Headlines (via Bloomberg.com)
• Europe Sentiment Drops to Six-Month Low on Fallout From U.S. Mortgage Woes European consumer and business confidence dropped more than expected in August to the lowest in six months after the crisis in the U.S. housing market pushed up borrowing costs in Europe.
• Metro Holder Haniel Increases Stake, Pools With Founders to Seal Controls Two of Metro AG's biggest investors joined forces to buy control of Germany's largest retailer, spurring speculation they'll press the company to speed expansion abroad or sell department stores and property.
• Barclays Rescues $1.6 Billion Cairn Capital Fund as Credit Access Dries Up Barclays Plc (NYSE:BCS), the U.K.'s third- biggest bank, will help rescue a $1.6 billion debt fund run by London-based asset manager Cairn Capital after it was unable to raise money in the credit markets.
• Arcandor Advances After Saying It's in Alliance Talks With Other Retailers Arcandor AG, the owner of Germany's biggest department-store chain and the Thomas Cook travel agency, rose the most in two years in Frankfurt trading after saying it's in talks about retail alliances.