In the Headlines
Typical of the recent index correlation, European stocks were down sharply Wednesday morning, which meant Wall Street futures pointed to a significantly lower open.
S&P 500 futures were down more than 2%.
Despite the planned resignation of Italy's prime minister, that nation's 10-year bond yield rose beyond 7% on new uncertainty about Italy's fiscal and political situation.
Analysts say another factor behind the rising yield was a clearing house's move to raise margins on Italian bond trade -- in other words, requiring extra insurance against losses.
There was some good economic news from China, where the consumer price index showed inflation slowing last month. Asian stocks closed mostly higher Wednesday.
Before this morning's open, the Mortgage Bankers Association said mortgage applications jumped 10.3% last week on lower interest rates and better demand for refinancings.
Inventories and Commodities
Today's government reports include September wholesale inventories figures from the Commerce Department, due out at 10 a.m. EST. Economists expect an increase of 0.5% for September.
At 10:30 a.m., the Energy Department is set to issue its weekly tally of crude oil reserves. The department's Energy Information Agency released a report, forecasting a per-barrel cost of crude at $100 later this year and into next year.
Many industry analysts have pointed out that the price has been trending higher along with the possibility of further quantitative easing. Crude was trading $1.23 lower, to $95.57 per barrel.
Meanwhile, gold was declining, shedding $5.10, to $1,794.10 per ounce.
Today's earnings reports include third-quarter results from General Motors (GM). The auto maker earned $1.03 per share on revenue of $36.7 billion. Wall Street had been eyeing income of $0.96 a share on revenue of $36.66 billion.
In today's conference call, analysts will listen for effects of increased costs on the company's margins, and for discussion of the European business climate.
GM shares slumped $0.45, 1.80%, to $24.59 following the results.
Also before the open is Ralph Lauren (RL). It's expected to report income of $2.24 per share on revenue of $1.84 billion. The clothing maker and retailer is among consumer discretionary names that have performed well in recent months. The stock pulled back from last week's all-time high, and is holding above key moving averages.
The retail sector makes another appearance this morning when Macy's (M) reports its third quarter. Wall Street expects earnings of $0.16 a share and revenue of $5.88 billion. On Tuesday, the stock rallied to a four-year intraday high.
A couple of after-the-bell reports should get some attention. DJIA component Cisco (CSCO) releases fiscal first-quarter results.
Revenue growth at the network gear maker slowed in the past four quarters, and earnings have been flat or slowing in the past three quarters. The company has been taking steps to address slowing growth, so analysts will be attentive to specifics about sales into global regions, as well as government and business sectors.
For the quarter, Wall Street expects profit of $0.39 per share and revenue of $11.02 billion. That would mark a year-over-year decrease in earnings but an increase in revenue.
Coffee pods will also be in focus later today, as Green Mountain Coffee Roasters (GMCR) brews up its fourth-quarter report. Analysts expect per-share income of $0.48 per share and sales of $760.48 million.
The stock skidded 30% last month, and is hovering below its 40-week moving average. Hedge fund manager David Einhorn made some negative remarks about the company's potential a few weeks ago, so analysts and investors will be eager to hear details that would confirm or refute those views.
Price movers ahead of today's open included Yahoo! (YHOO), advancing $0.33, 2.07%, to $16.30. The company has joined forces with Microsoft (MSFT) and AOL (AOL) to form an advertising alliance. The companies will now be selling each other's unsold premium ad inventories.
On the downside, graphics software maker Adobe (ADBE) plunged $3.07, 10.09%, to $27.35 in early trade. The company is expected to announce this week that it has halted development on its Flash products for mobile devices. Apple (AAPL) had refused to support Flash in its mobile version of Safari, saying it was a slow, bad experience for users. Adobe already said it would lay off 750 workers.
At SunTrust, Abercrombie & Fitch (ANF) was downgraded to Neutral from Buy. SunTrust's analyst cited slower third-quarter sales and same-store results.
It's one of those downgrades that comes somewhat late; last week, Abercrombie's stock gapped down nearly 20% as the company reported weak overseas growth.