Stock Market Today: New Rules for Big Banks

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Stock market news today, April 9, 2014: The Dow Jones Industrial Average rose 10 points yesterday to finish at 16,256. The Nasdaq increased 33 points to finish at 4,112, while the S&P 500 added 6 points to end the day at 1,851.

Today, the FOMC will release minutes from its March meeting. Investors are seeking clues on when Fed Chair Janet Yellen and the central bank will exercise an increase in interest rates.

Here are the five things to know to make your day profitable:

Five Biggest Stories in Today's Stock Market, April 9, 2014

Dow Jones Industrial Average
N/A: DJIA
Aug 27 10:36 AM
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Price: 17,097.10 | Ch: -9.60 (-0.1%)
  • Changes to Capital Requirements: U.S. regulators aim to increase capital requirements for the eight biggest U.S. banks - including JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corp. (NYSE: BAC), Goldman Sachs Group Inc. (NYSE: GS) and Wells Fargo & Co. (NYSE: WFC). The new "leverage ratio" would force the largest eight U.S. banks to hold a minimum 5% equity - as much as $68 billion total - on their books in order to stop steep losses in the event of another financial crisis. The new rule also prevents banks from using their own financial models, which made it possible in the past for companies to fudge numbers and maintain lower leverage ratios. The rule will take effect on Jan. 1, 2018.
  • Dissent in the Ranks: During a speech in Rochester, Minn., yesterday, Minneapolis Federal Reserve President Narayana Kocherlakota argued that the U.S. central bank should not cut its stimulus plans and instead enhance efforts to decrease joblessness across the nation. Kocherlakota, who was the lone official to dissent when the FOMC voted to slash QE3 by another $10 billion last month, believes the bank is moving too quickly in its efforts to change monetary policy. The bank president argues that the Federal Reserve should continue its "easy money" policy until the unemployment rate falls well below the 6.5% target.
  • A "Mixed" Number: Although the U.S. unemployment rate is falling and only 63.2% of adult Americans are in the workforce, the number of job openings in the nation has struck a six-year high. As of February, there were 4.17 million jobs available - the highest figure since January 2008, according to the U.S. Labor Department. Keep your eye on Money Morning this week for a deeper examination into what this figure means, and why the American economy needs a transformation in education, training, and enthusiasm for many of these positions.
  • Beef Price Hit All-Time High: There's a reason you're paying so much for a steak dinner these days. Beef prices struck an all-time high in the U.S. in February, and relief isn't expected to come in 2014. According to government figures, the retail cost of "all-fresh" USDA choice-grade beef struck $5.28 a pound in February, a 7.5% increase year-over-year. Thanks to harsh weather across the U.S. (drought in the west, and cold everywhere else), the nation's cattle herd declined to levels not witnessed since 1951. The USDA reports that the last time herd levels were this low, the U.S. population was roughly half of what it was today.
  • A Letdown at IPO Time: In an effort to cash in on the hot IPO season, La Quinta Holdings Inc. (NYSE: LQ) announced its price per share. Unfortunately, the company's share price was below its target. The company will sell approximately 38.3 million shares at $17 a share, according to Bloomberg. The company had hoped to price the stock between $18 and $21.

Note: The Fed's 2014 taper means volatility ahead. So we've outlined how to find profits in a volatile market - like triple-digit gains in just days - if you start with this strategy...

U.S. Economic Calendar April 9, 2014

  • MBA Purchase Applications at 7 a.m.
  • Wholesale Trade at 10 a.m.
  • EIA Petroleum Status Report at 10:30 a.m.
  • 10-Yr Note Auction at 1:00 p.m.
  • FOMC Minutes at 2:00 p.m.
  • Chicago Fed President Charles Evans speaks at 3:30 p.m.
  • Federal Reserve Gov. Daniel Tarullo speaks at 7:00 p.m.

Key Companies Reporting Earnings April 9, 2014

  • Consensus earnings per share for Progressive Corp. (NYSE: PGR) is $0.40.
  • Consensus earnings per share for Constellation Brands Inc. (NYSE: STZ) is $0.76.
  • Consensus earnings per share for MSC Industrial Direct Company Inc. (NYSE: MSM) is $0.85.
  • Consensus earnings per share for PriceSmart Inc. (Nasdaq: PSMT) is $0.87.
  • Consensus earnings per share for Tech Data Corp. (Nasdaq: TECD) is $1.95.
  • Consensus earnings per share for Penford Corp. (Nasdaq: PENX) is $0.09.

Other Companies Reporting

Bed Bath & Beyond Inc. (BBBY), Joe's Jeans Inc. (JOEZ), Ruby Tuesday Inc. (RT), AngioDynamics Inc. (ANGO)

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