Stocks slip ahead of Fed minutes
Investors await notes from the latest policy meeting. The US trade deficit shrinks. Wholesale inventories are up. Spain announces more austerity measures.
By Andrea Tse
Stocks edged mostly lower Wednesday as investors awaited minutes from Federal Reserve policymakers' most recent meeting for more insight on the central bank's views about additional quantitative easing.
The Federal Open Market Committee's minutes from the June 20 decision are due out at 2 p.m. ET.
Goldman Sachs economists say they will be particularly interested in how many FOMC members expect further eventual easing and in what form; how close the committee was to either doing more or less than Operation Twist 2 at the June meeting; how much discussion there was of qualitative changes in the forward guidance; and how much more negative the Fed staff has become about the economic outlook.
Stocks finished in the red Tuesday, pulled lower by earnings worries in the technology sector and continued apprehension about Europe's debt crisis after optimism about a rescue plan for Spain proved short-lived.
The Commerce Department reported before the markets open that the U.S. trade deficit shrank to $48.7 billion in May, from a slightly upwardly revised $50.6 billion in April, which was roughly in line with expectations for $48.5 billion, according to a survey of economists by Thomson Reuters. May exports were $0.4 billion more than April exports of $182.7 billion. May imports were $1.6 billion less than April imports of $233.3 billion.
The April to May increase in exports of goods reflected increases in foods, feeds, and beverages and capital goods. The April to May decrease in imports of goods reflected decreases in industrial supplies and materials; consumer goods; and foods, feeds, and beverages.
The Commerce Department said wholesale inventories edged higher in May, rising 0.3% to $484.1 billion, in line with economists' forecasts, Reuters reported. The government lowered its estimate for inventory growth in April, Reuters said, adding that inventories are a key component of GDP calculations. Many economists think economic growth slowed in the second quarter, and the wholesale inventories data appear to support that view.
In corporate headlines, UBS initiated coverage of Apple (AAPL) with a "buy" rating and a 12-month price target of $740, saying it sees the release of the iPhone 5 as another positive catalyst for the stock, which it views as being reasonably priced. UBS said long-term earnings per share could top $70, compared with the current consensus estimate of $48.84, in fiscal 2012. As for near-term earnings, UBS sees some potential bumps in the road.
JPMorgan Chase (JPM) plans to follow through on CEO Jamie Dimon's threats to claw back stock compensation from the employees responsible for the disastrous trade in the Dow component's synthetic credit portfolio that's led to at least $2 billion in losses, according to The Wall Street Journal.
VOXX International (VOXX) reported a fiscal-first-quarter loss of $9 million, or 20 cents a share, on sales of $194 million after the close Tuesday. The average estimate of analysts polled by Thomson Reuters was for a profit of 10 cents a share in the May-ended period on revenue of $207.8 million.
Hhgregg (HGG) joined the warning parade Tuesday, saying it now expects earnings of 90 cents to $1.05 a share in its fiscal year ending in March 2013. The Indianapolis consumer electronics and appliance retailer had previously forecast a profit of $1.12 to $1.27 a share, and Wall Street's current consensus view is for $1.20 a share.
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A dollar borrowed with interest, paid with a new fiat dollar = more debt.
They've already lost all of our money.
blame it on the 80's. the mantra, "put your equity to work" was about borrowing against your "strengths". and so many fools went for it. and so many of the same fools were voted into office to borrow away everyone's future.
>>>>Another California city files for bankruptcy protection. There will be many more, and maybe even Illinois/California will file in a year or two... Still think Government Debt is safe? <<<<
And we know Dodd is corrupt- just another smiling crook with a D after his name.
I agree the TBTF banks didn't deserve bailouts, but even baby Bush thought they did. These banks have already done the damage - and we can't even see the extent of damage because we haven't factored in currency depreciation with all of the money printing we've had to do to cover their losses.
Stocks to open slightly higher ahead of Fed minutes
Stocks slip ahead of Fed minutes
ARE YOU KIDDING ME?..........here are the real news which will be hitting our shores pretty soon and ruin it all:
"SPAIN AUSTERITY PLAN UPS TAXES, CUTS SPENDING"
yeap like Egypt, like Spain and now arriving soon to the US.......
Market has been going down, so Fed will pump it up today with double talk. Remember end of month June, market was heading into a bad quarter until the EU said thay are thinking about dealing with the EU debt. Stock shot up 277 points and saved the quarter.
EU, Fed what are they good for "absolutely nothing". Sounds like asong
The little people weren't the ones who created these insanely complicated interwoven MBS and Libor scandals. We didn't bet against entire cities and countries.... it's time for those "big people" who are responsible for this mess to take their OWN RESPONSIBILITY for it.
I know MG, personal responsibility is only meant for the little people when they lose...but not for the financial big wigs, right?
I've never been on unemployment my entire life. I don't collect SS or Medicare or food stamps, but I will defend those who do, so go back to playing with your FisherPrice toys.
The longer we continue down this path of interest returns lower than inflation we will continue to exacerbate compression. We are basically eating our seed corn folks. And as one poster pointed out it appears our financial leaders are unable to grasp the reality that we are in new undefined territory and the old school stuff seems mostly a futile excercise. I personally have this feeling I need to protect everything and any positive returns seem way down the list at this point. When folks no longer have trust or confidence in our central bankers they will pull back and horde.. We are seeing a world economy on the brink. I have no answers.
The Federal government can always pay off its debt simply because it can create (and inflate) the supply of money. All the government has to do (the Treasury) is issue bonds which the Fed buys. The government can then meet its debt obligations. Over a period of time, from the benefits of inflation, the government shrinks it debt with cheaper dollars.
Another interesting fact is that the government can control the cost of its borrowing by contolling the shape of the yield curve. For example, the Fed can purchase 10-year Treasuries driving up their prices and down the yield.
Infaltion isn't a bad thing once one remembers that money is simply a medium of exchange. As you get it, you should spend it on life's necessities and what's left over should be invested in hard assets (oil or Gold for example) or tangible assets like equities.
Don't have any money left over? Too bad. You'll have to ask Obama for a handout.
I am interested in knowing what the heck Mitt plans to do. His 59 point plan is vague. I don't see how he plans to bring back the economy. You can't just make statements like "let's get rid of the EPA" and think that this and extending the Bush tax cuts for everyone will solve our problems. And if he privatizes SS, we will lose it because the world economy is in the toilet. Is he going to start a trade war with China? We owe them so much money, he needs to be careful. Is he going to start a new war in the Middle East? That's what baby Bush did and it doesn't work - it just makes people like Cheney more rich.
Whether President Obama or Romney wins the election, we are scr3wed for at least another 2 years, maybe longer.
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[BRIEFING.COM] The major averages hover near their session lows with the S&P 500 down 0.5%.
The Federal Reserve has released the minutes from its May 1 meeting. The minutes indicated that many participants believed more economic progress needs to be seen before quantitative easing can be slowed down. However, some members did express their willingness to slow asset purchases as early as June, provided economic conditions warrant the change.
With regards to inflation, the ... More
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