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Good morning!
Stock market futures for Friday, Nov. 7, forecasted a 26-point rise from yesterday's close on news that the unemployment rate dropped to 5.8% for a six-year low. Yesterday, the Dow Jones hit another record high, adding nearly 70 points on the day. The S&P 500 Volatility Index (VIX) – the market's volatility gauge – dipped another 3.5%.
Today, watch for how the market reacts to the jobs report. This morning, we learned that the U.S. added 214,000 jobs in October, signaling positive momentum in the U.S. economy. As the economic picture improves, investors are waiting on the Federal Reserve to provide more guidance on when it might raise interest rates. New York Federal Reserve Bank President William Dudley said this morning that he would welcome a rate hike, as it would be the sign of continued economic growth in the nation.
Discoverer Inspiration, operated by Transocean, delivers a new containment cap to the BP oil spill on July 10, 2010.
Here's a roundup of the top stock market news stories, plus our "Money Morning Tip of the Day."
- Bad Beat: Shares of Transocean Ltd. (NYSE: RIG) slipped more than 5% in pre-market hours. The oil field service giant announced that it will take a $2.76 billion charge against September quarter earnings as demand for drilling declined. The firm also announced that it will delay its earnings report. Transocean stock is now down more than 40% on the year.
- Death of Retail: Shares of retail icon Abercrombie & Fitch Co. (NYSE: ANF) plunged nearly 14% this morning on news that it doesn't expect to meet third-quarter earnings estimates. The company warned that its international sales slipped by 15% in the third quarter, while domestic sales saw a 7% decline. The company slashed per-share earnings estimates to $0.40 from $0.42, down significantly from consensus Street expectations of $0.67.
- Entertaining Profits: Shares of The Walt Disney Co. (NYSE: DIS) were down more than 2% this morning on news that the company narrowly missed earnings expectations. DIS did announce that its film "Guardians of the Galaxy" grossed roughly $329.4 million in ticket sales. The film was a highly risky venture, but provided a strong return for the company. Disney reported that the company saw weakness in its networks business.
- Banks Behaving Badly: U.S. financial giant Bank of America Corp. (NYSE: BAC) said it is currently negotiating with regulators to settle an ongoing investigation into its Forex trading practices. The firm announced plans to add $400 million for possible legal expenses. The announcement comes just days after JPMorgan Chase & Co. (NYSE: JPM) disclosed that the U.S. Justice Department was also investigating the firm's currency practices. Shares of BAC were down roughly 0.5% this morning.
- Economic Calendar: This morning we saw the October unemployment report. Still to come, stay tuned for a speech from Fed Chairwoman Janet Yellen and an update on U.S. consumer credit.
- Oil Prices Today: Oil prices were up slightly this morning on news that OPEC said it would cut production if Brent crude slipped to $70 per barrel. December futures of WTI crude, priced in New York City, rose more than 0.8% to hit $78.57. Meanwhile, Brent prices, the global benchmark priced in London were up nearly 1%. The strong jobs report may boost prices in today's session.
- Earnings Reports: Stay tuned for earnings reports from Berkshire Hathaway (NYSE: BRK.A), (NYSE: BRK.B), The Walt Disney Co. (NYSE: DIS), Buckeye Partners LP (NYSE: BPL), EW Scripps Co. (NYSE: SSP), and Isis Pharmaceuticals Inc. (Nasdaq: ISIS).
Full U.S. Economic Calendar November 7, 2014 (NYSE: all times EST)
- New York Federal Reserve Bank President William Dudley speaks at 8:15 a.m.
- October unemployment report at 8:30 a.m.
- Federal Reserve Chair Janet Yellen speaks at 10:15 a.m.
- Federal Reserve Gov. Daniel Tarullo speaks at 2:30 p.m.
- Consumer Credit at 3 p.m.