Stock market today, March 11, 2014: The Dow Jones Industrial Average lost 0.21%, finishing at 16,418.68. The Nasdaq lost 0.04% to end at 4,334.45. The S&P slipped 0.05%, closing at 1,877.17. Markets dipped marginally on news of China's steep drop in exports and Philadelphia Fed President Charles Plosser's speech pronouncing that February's harsh winter was responsible for the recent stunt in U.S. job growth.
Here are the five biggest stories to watch today and how they're moving markets:
Five Biggest Stories in Today's Stock Market, March 11, 2014
The Death of Arbitrage: On Monday,the Federal Reserve Bank of New York released a report stating that arbitrage has become rarer since 2008 due to the rise of high-frequency trading (HFT) systems. According to the report, arbitrage opportunities, or market price differences, between three currency pairs - dollar-yen, euro-yen, and euro-dollar - had occurred three times per minute during the active portion of the trading day early last decade. However, according to NY Fed research officer Ernst Schaumburg, in the last five years, the rise of sophisticated algorithms and HFT has "enhanced market efficiency as measured by the availability and persistence of pricing arbitrage opportunities available in the FX spot markets."
Billionaire Hits Herbalife: Charges against HerbalifeLtd.(NYSE: HLF) by hedge fund Manager Bill Ackman set up a great battle last year between Ackman and Carl Icahn. Given the surge in share price over the last year, it's clear that Icahn has won the first round. But Ackman still alleges that the company is a pyramid scheme, and Bloomberg reports he has planned to give a presentation today to back up his beef against the company. Ackman alleges he has obtained documents from a former employee that proves the company violated Chinese law through its direct selling and multilevel marketing practices. This is the latest in a string of events by Ackman to prove his theory on the company, which include hired lobbyists, SEC presentations, and letters to state's attorneys over the last few years.
Activist Investor At It Again: Billionaire activist investor Carl Icahn just can't play nice with executive teams. Icahn took to the airwaves Monday on CNBC and slammed eBay Inc.(Nasdaq: EBAY) Chief John Donahue for costing investors $4 billion. Icahn has repeatedly called for the company to spin off its vaunted PayPal division. Meanwhile, eBay rejected Icahn's board nominees, calling the two "unqualified" and urged investors to do the same. This battle continues to grow uglier between the board and Icahn, who owns approximately 2% of company shares.
The Cell Phone Wars: Following AT&T Inc.'s (NYSE: T) decision to slash prices, the battle for wireless subscribers is scorching. During a conversation with PBS's Charlie Rose, SoftBank (OTC: SFTBF) CEO Masayoshi Son remained confident that his company can still purchase T-Mobile US Inc. (NYSE: TMUS) and merge the telecom firm with Sprint Corp. (NYSE: S), despite disagreements with U.S. regulators. The U.S. government has argued that reducing the number of prominent wireless carriers from four to three would reduce consumer choice. However, should regulators reject his bid, Son indicated his intent to begin a price war against what he believes to be a wireless duopoly of AT&T and Verizon Communications Inc. (NYSE: VZ). Shares of Sprint are up more than 3% in pre-market trading, while shares of the supposed duopoly are down marginally.
Holding the Course: In a statement this morning, The Bank of Japan announced it will maintain its record-level monetary easing program. Central bank officials are attempting to stave off any direct hit to the economy from the coming April sales-tax bump. The Bank of Japan plans to expand its monetary base by up to 70 trillion yen per year, or nearly $677 billion. Concerns over the impact of the sales tax are so high that some fear the nation may experience its largest one-quarter slump since the earthquake hit in March 2011.
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U.S. Economic Calendar March 11, 2014
NFIB Small Business Optimism Index at 7:30 a.m.
ICSC-Goldman Store Sales at 7:45 a.m.
Redbook at 8:55 a.m.
JOLTS at 10 a.m.
Wholesale Trade at 10 a.m.
4-Week Bill Auction at 11:30 a.m.
3-Yr Note Auction at 1 p.m.
Key Companies Reporting Earnings March 11, 2014
Consensus earnings per share for American Eagle Outfitters Inc. (NYSE: AEO) is $0.26.
Consensus earnings per share for Arcos Dorados Holdings Inc. (NYSE: ARCO) is $0.16.
Consensus earnings per share for Bridgepoint Education Inc. (NYSE: BPI) is $0.03.
Consensus earnings per share for Diamond Foods Inc. (Nasdaq: DMND) is $0.08.
Consensus earnings per share for Dick's Sporting Goods Inc. (NYSE: DKS) is $1.10.
Consensus earnings per share for John Wiley & Sons Inc. (NYSE: JW/A) is $0.84.
Consensus earnings per share for Synta Pharmaceuticals Corp. (Nasdaq: SNTA) is $-0.31.
Others Reporting Earnings
TransMontaigne Partners L.P. (TLP) Park-Ohio Holdings Corp. (PKOH) Gray Television Inc. (GTN), NN Inc. (NNBR), Caesars Entertainment Corp. (CZR), Hertz Global Holdings Inc. (HTZ), VeriFone Systems Inc. (PAY), Midstates Petroleum Co. Inc. (MPO), Blueknight Energy Partners LP (BKEP)
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.