The Day Ahead: Rally in Question

 | Jan 16, 2014 | 8:45 AM EST  | Comments
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A two-day market rally brought the major indices closer to going positive for the year Wednesday, but stock futures were stalled Thursday morning in a range that points to a negative-to-mixed open.

This comes as two big-money centers reported earnings this morning, Citigroup (C) and Goldman Sachs (GS), as well as private-equity group BlackRock (BK).

Goldman beat Wall Street earnings estimates by a wide margin, but quarterly net income fell by $1 per share from a year earlier. Meanwhile, Citigroup missed big, delivering adjusted net income of $0.82 vs. views of $0.95 per share, and it missed on the top line, booking $17.8 billion in revenue vs. calls for $18.3 billion.

Meanwhile, BlackRock beat earnings estimates by $0.59 per share, giving the stock a 5% boost in premarket trading. And UnitedHealth (UNH) surpassed bottom-line expectations by a penny, with top-line results meeting consensus estimates.

After the market close, we'll hear from tech bellwether and Action Alerts PLUS holding Intel (INTC), as well as two more financials, American Express (AXP) and Capital One (COF), among others.

Late Wednesday, rail operator CSX (CSX) missed EPS estimates by a penny and delivered in-line revenue.

A couple of downtrodden names top the premarket action. Best Buy (BBY) shares were off by nearly a third of their value after the electronics chain short-circuited on December same-store sales. And beleaguered department-store operator J.C. Penney (JCP) said it would be closing 33 stores and cutting 2,000 jobs as it continues its makeover, sending shares down just under 1%.

Scads of economic data come out today, starting with the weekly initial jobless claims and the Consumer Price Index. The number of people filing for first-time unemployment benefits fell by 2,000 last week, to a seasonally adjusted 326,000, below predictions for 328,000 new filings. Meanwhile, price inflation was held in check in December, with CPI coming in at an expected 0.3% and core CPI, excluding food and energy, in line at 0.1%.

The Philadelphia Fed Survey and the Housing Market Index from the National Association of Home Builders will be released at 10 a.m.

In company news, Yahoo! (YHOO) has parted ways with COO Henrique de Castro. Shares were down in early trading.

Fedhead Alert: Ben Bernanke will deliver what may be his final speech as the central bank's chairman at 11:10 a.m. ET in Washington. And San Francisco Fed President John Williams gives a speech on the lessons of the Great Recession at 9:15 a.m., also in Washington.

Overseas, European markets were retreating from six-year highs, while Asian markets had a mixed session.

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