Stocks hope to continue rally; Consumer inflation tame; Tesla loses in Michigan
Stocks are struggling to make headway after yesterday’s rally. Investors getting hit with another wave of earnings this morning and data on consumer inflation.
The cost of living only edged up only slightly last month, showing inflation is very much under control.
The Labor Department reported the consumer price index rose 0.1% last month after dipping 0.2% in August. Stripping out the volatile food and energy sector, the so called core rate also rose 0.1% in September.
Something else tied to the consumer price index will be going up, 64 million Americans who receive social security benefits will see a small bump in their checks next year. The cost of living increase covers a rise in consumer prices and translates to a little over $20 more a month for the average retiree on social security.
Earnings also continue to pour in on Wall Street. Boeing (BA) reported earnings and revenue that handily beat estimates. Revenue rose more than 7% from a year earlier thanks to strong demand for its passenger jets. The company also raised its earnings outlook for the year.
Related: Boeing profits flying high; Yahoo jumps on beat; J&J working on Ebola vaccine
Yahoo (YHOO) posted earnings and revenue that topped analysts' estimates. Yahoo benefited from selling shares in Chinese e-commerce giant Alibaba (BABA) last month, in which it still holds about a 16% stake. The company also saw growth in mobile advertising last quarter, but its online advertising business continues to struggle. Yahoo is the parent company of Yahoo Finance.
In other news, Tekmira Pharmaceuticals (TKMR) shares rose in pre-market trading. The Canadian drugmaker said it would begin manufacturing a limited supply of its Ebola treatment. Tekmira said its new drug would be available in early December.
Johnson and Johnson (JNJ) is joining the race to deliver a vaccine for the Ebola virus. The U.S. drugmaker will begin testing a vaccine for the deadly disease in humans in January. Johnson and Johnson plans to have 250,000 doses of the experimental Ebola vaccine ready by May to use in clinical trials. Shares of J&J were higher on the news in early trading.
Tesla (TSLA) stock headed in reverse after the electric carmaker got a double-dose of bad news. Germany's Daimler-Benz is selling its 4% stake in the company and Michigan’s governor has just signed a car dealer-friendly law. That law blocks Tesla from selling vehicles directly to the public there.
Yahoo Finance Editor-in-Charge Aaron Task says Tesla is challenging the old economy. “It is really a fight for the future of the auto industry,” Task says.
The holiday wars have already begun! Target (TGT) announced it will offer free shipping for all online purchases starting today running through December 20th. The retailer is looking for ways to lure customers back to its stores after last year’s massive credit card data breach kept some shoppers away.
Related: Target already has holidays in its sight
Finally, some good news for would be borrowers. Those tighter lending standards that came following the housing meltdown are easing up. Federal regulators are dropping a plan to require borrowers to put 20% down for the best home loans. The real estate industry and others warn that such rules would hurt the housing recovery.
Officials are also changing the role of Fannie Mae and Freddie Mac to expand available credit, having them guarantee loans with borrowers putting as little as 3% down.
Related: America's housing policy: The definition of insanity
Task is baffled why regulators are pursuing this policy when it failed so miserably last time.
“This is really the definition of insanity, thinking that you can do the same thing over and get a different result,” he points out.
