The Day Ahead: Deal Hope Still There

 | Oct 16, 2013 | 8:30 AM EDT
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U.S. markets appear confident that a last-minute deal to avert a government default is imminent as stock futures point to a higher open this morning. The mood could have been more somber after news last night that ratings agency Fitch warned it could cut the U.S.'s triple-A sovereign credit rating as the battle rages in Washington over the debt ceiling.

European markets saw their mini-winning streak falter as U.S. lawmakers again failed to come to an agreement over the debt limit last night. Asian markets closed mixed. Spot oil prices have been slowly tracking toward the $100-per-barrel mark, dipping below $101 recently. December gold was up slightly to $1,279.50. The U.S. dollar was flat and the yield on 10-year Treasuries was up nearly 2% to 2.74%.

Meanwhile, earnings season continues unhindered. Late Wednesday, tech bellwether Intel (INTC) beat top-line estimates but offered weaker revenue guidance, sending shares down slightly in premarket trading.

Yahoo! (YHOO) reported results that were basically in line with views, which was enough to help the shares higher this morning. The Internet pioneer also said it amended its stock repurchase agreement with Alibaba. Shares of CSX (CSX) were also moving higher after the rail operator beat earnings estimates and raised its full-year outlook.

Several Charitable Trust holdings post quarterly reports today, starting with KeyCorp (KEY) before the bell. The regional bank booked higher profit in the third quarter on increased loans and deposits. Shares were up nearly 3% with the news.

Bank of America (BAC) saw third-quarter net-income rise, though shares dipped slightly. Also, look for earnings from financials such as PNC (PNC) and U.S. Bancorp (USB), as well as reports from Abbott Labs (ABT), BlackRock (BLK) and PepsiCo (PEP) in the premarket hours.

Newly added Charitable Trust position Noble Energy (NBL) reports after the close, as will Xilinx (XLNX). They'll be joined by American Express (AXP), eBay (EBAY), IBM (IBM) and Kinder Morgan Partners (KMP), among others.

Fallout from the partial government shutdown continues to be felt by market watchers as today's release of the Consumer Price Index from the Bureau of Labor Statistics has been postponed; however, investors can look for Business Inflation Expectations at 10 a.m. from the Atlanta Fed, as well as the Fed's beige book of economic conditions at 2 p.m. Also, the NAHB housing market index for September is expected to come in today at 57 for October, down from a revised figure of 58 in September.

Apple (AAPL) is a stock to watch today on a Dow Jones report that it may cut production of its new, lower-cost iPhone 5c due to falling demand. And Stanley Black & Decker (SWK) said quarterly profit rose, but shares plunged about 10% in the early going after the toolmaker lowered its guidance.

Twitter said it booked a wider loss in the third quarter after opening its books ahead of its highly anticipated initial public offering. It also chose to list its shares on the NYSE.

What could be the biggest IPO of the year comes from Plains GP Holdings (PGAP), a limited partnership engaged in the transport and storage of crude oil and refined products, which expects to price 128 million shares at $22 to $25 apiece, potentially valued at about $3 billion.

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