Stock Futures Slip as Debt-Deal Excitement Fades
NEW YORK ( TheStreet) -- Stock futures were retreating Thursday after the build-up in expectations of a last-minute congressional fiscal deal gave way to the deflating reality that this was only temporary solution and that the brinkmanship in Washington may be headed for a repeat in a few months.
Investors also were weighing the impact that the the fiscal deadlock had on U.S. economy while turning their attention to the third-quarter earnings season, which was showing mixed results Thursday.
Futures for the S&P 500 were slipping 2.75 points, or 5.24 points below fair value, to 1,710.5. Futures for the Dow Jones Industrial Average were slumping 62 points, or 116.83 points below fair value, to 15,187. Futures for the Nasdaq were dipping 1.5 points, or 11.07 points below fair value, to 3,262.5.
The House of Representatives Wednesday night passed a bill to fund the government and raise the nation's borrowing limit by a vote of 285 to 144. Republicans and Democrats upheld a bill negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell after a nearly-three week shutdown of a vast array of government offices and services. The deal, like a litany of others, was secured shortly before the United States would have been largely unable to pay its debts.
IBM IBM shares were sinking nearly 6% to $175.67 in premarket trading after the technology giant reported better-than-expected third-quarter earnings but missed on the top line following a negative currency hit and as key growth markets trailed the majors for the first time. "Clearly we need to improve performance predominantly in the key growth markets," IBM Chief Financial Officer Mark Loughridge said during IBM's earnings call. "But we are confident this can get back on track by 2014," with mid-single digit growth in the growth markets by mid-2014.
The Labor Department reported Thursday that initial jobless claims fell by 15,000 to 358,000 in the week of October 12, which was above the 335,000 figure economists were expecting. The four-week moving average, indicative of longer-term trends, rose 11,750 to 336,500. Gennadiy Goldberg, a New York-based strategist at TD Securities wrote in a note that while Federal workers are not reflected in the higher initial claims total, part of the ongoing increase in claims likely remains attributable to some non-government workers being impacted by the government shutdown. It was also noteworthy that the numbers may have been skewed somewhat by computer system upgrades affecting claims processing.