Financial news today, May 8, 2014: The Dow Jones Industrial Average jumped Wednesday after Fed Chair Janet Yellen told the Joint Economic Committee of Congress that the U.S. economy needed additional support to buffer the "considerable slack" in the labor market. Yellen also stressed risks in the housing market and rising geopolitical tensions.
This morning (Thursday), U.S. futures are flat on positive Chinese trade data and the anticipation of jobless claims.
Here's what you need to know to make your Thursday profitable:
- Housing Struggles on Tap: Federal Reserve Chair Janet Yellen stressed concerns about the housing market on Wednesday, an unusual departure from past upbeat tones about the economy. Said Yellen: "The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery." According to Census Data, building permits - a typical gauge of future housing construction - slipped 2.4% in March, while existing home sales remained flat.
- Today's Economic Calendar: This morning, Federal Reserve Chair Janet Yellen will testify before the U.S. Senate. Two Federal Reserve Presidents will speak today, in addition to Federal Reserve Governor Charles Possner. Jobless claims arrived this morning at 8:30 a.m., and the Federal Reserve will release its balance sheet after the market closes. See below for a full calendar of today's events.
- Tesla Slumps: Shares of Tesla Motors (TSLA) fell by 7.62% in after-hours trading despite beating earnings expectations. The company posted earnings of $0.12 per share (excluding one-time items) on $713 million in sales. During a conference call, the company said it will double down on its plans to build cars in China within the next four years and expand its operations in East Asia. TSLA expects to deliver up to 7,500 Model S units for the quarter, in an effort to surpass 35,000 Model S deliveries in 2014.
- A New Cable Giant: The Wall Street Journal reports that Goldman Sachs (GS) is consulting DirecTV (DTV) to evaluate its possible merger with AT&T (T). The deal would provide services to 25 million customers and create a new powerhouse to compete in bundled services against Comcast (CMCSA) and Time Warner Cable (TWC).
- Alibaba IPO Profits: When Alibaba launches its initial public offering (IPO) in the near future, the biggest winner will be Japan's Masayoshi Son. That's because Son's SoftBank Corp. (SFTBF) invested $20 million on a Chinese web portal 14 years ago. That unknown company evolved into the world's largest internet commerce company, and Softbank's stake in the company has been estimated at nearly $58 billion. And, unlike Yahoo! Inc. (YHOO), Softbank is not required to sell any of its shares during the IPO.
- A Big Oil Deal: The oil-and-gas arm of Freeport-McMoRan Copper & Gold (FCX) announced it is selling its Eagle Ford Shale assets for $3.2 billion to Canadian energy producer Encana (ECA). Following the deal, Freeport will use approximately $2.5 billion in profits to repay debts and to purchase new deep-water assets in the Gulf of Mexico.
- The Buyback Begins: The board of Ford Motor Co. (F) has approved a $1.8 billion share repurchase plan as the auto maker looks to offset impending share-based compensation and other expenditures. The company will repurchase up to 116 million shares of common stock.
- Earnings Reports: Stay tuned for earnings reports from The Priceline Group (PCLN), Valeant Pharmaceuticals International (VRX), DISH Network Corp. (DISH), Canadian Natural Resources (CNQ), Toyota Motor Corp. (TM), and Wendy's (WEN).
Complete U.S. Economic Calendar May 8, 2014 (All times EDT)
- MBA Purchase Applications at 7 a.m.
- Federal Reserve Gov. Charles Plosser speaks at 8 a.m.
- Jobless Claims at 8:30 a.m.
- Philadelphia Federal Reserve Bank President Daniel Tarullo speaks at 8:30 a.m.
- Federal Reserve Chair Janet Yellen speaks at 9:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 30-Yr Bond Auction at 1:00 p.m.
- St Louis Federal Reserve Bank President James Bullard Speaks at 2:00 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
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