Market holds breath for debt deal

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Stocks are range-bound today as investors anticipate a resolution to the deadlock in Washington.

S&P 500 futures are down fractionally, reversing earlier gains after Citigroup missed estimates. European indexes are climbing by about 1 percent after Germany's Zew survey of investor confidence rose to a three-year high.

Asian markets were mixed but modestly higher, led by Australia, Taiwan and Hong Kong. Gold and silver plunged, reflecting confidence that politicians will raise the United States debt ceiling soon.

Two days remain before the world's biggest economy reaches the statutory limit on its borrowing. Lawmakers have been unable to reach an agreement on raising the ceiling, though senators yesterday were hopeful that a deal would emerge today.

The S&P 500 pulled back to its 100-day moving average last week on worries about the debt situation, but then bounced after House Republicans met with President Obama. The index is up 3.9 percent from those lows in just the last four sessions. International markets have been even stronger during that time as investors find value in countries such as Thailand, India, and Brazil.

Our researchLAB market-analysis tool also shows continued strength in semiconductor-related stocks, steelmakers, and companies that provide office supplies and equipment. Precious metals, ocean shippers, and Chinese Internet companies have lagged.

Attention will now focus increasingly on corporate earnings. Financial giant C is down about 1 percent this morning after quarterly profit and revenue missed expectations. Coca-Cola matched estimates, while Johnson & Johnson beat consensus numbers and raised full-year guidance. Today's big names after the closing bell include semiconductor maker Intel and Internet giant Yahoo. The only economic report on the calendar is the New York Federal Reserve's Empire manufacturing index at 8:30 a.m. ET.

Most other commodities are negative in addition to the 1 percent drop for gold and the 3 percent plunge in silver. Oil is down more than half a percent, led by Brent crude, which could hurt refiner stocks. Copper is down a similar amount and agricultural products are mostly negative.

The euro is also down against the U.S. dollar as hope of a debt deal lifts the greenback. The Japanese yen is modestly higher across the board, which reflects a certain degree of risk aversion.

In other company-specific news, software maker Teradata and retailer Coldwater Creek are indicated sharply lower after reporting weak quarterly results. Packaging Corporation of America is up more than 1 percent after earnings and revenue beat expectations.

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