- S&P 500
flat at record high
- Existing home sales fall, eyes turn to NFPs
- McDonald's misses forecasts in third quarter
Dow Jones: -0.15%
S&P 500: -0.01%
US stock markets opened broadly flat on Monday as investors showed caution ahead of the delayed release of the September non-farm payrolls figures due out tomorrow.
Indices had a strong week of gains last week on the back of upbeat corporate earnings from the likes of Google and Morgan Stanley, as well as speculation that the government shutdown may prompt the Federal Reserve to put off tapering stimulus. This pushed the benchmark S&P 500 up 2.4% on the week to an all-time high of 1,744.5 on Friday, a level which it held on to in early trading on Monday.
A backlog of US data should begin to unwind this week following the shutdown with last month's employment report likely to garner the most attention on Tuesday. Consensus forecasts are pointing to an 180,000 increase in US non-farm payrolls last month, higher than the 169,000 gain seen in August. However, the unemployment rate is expected to have remained unchanged at 7.3%.
Matt Basi, Head of UK Sales Trading at CMC Markets, said that while the barrage of upcoming economic announcements may spark intraday volatility, "it's unlikely we'll see significant money flows on the numbers given that we're now looking at historic data". He said that all but the most hawkish commentators have almost entirely priced out any prospect of Fed tapering in 2013, "taking the edge off US data announcements to an extent".
As for today's data, the National Association of Realtors reported that existing home sales slipped 1.9% month-on-month in September after hitting their highest level in nearly four years the month before. Sales fell to an annualised rate of 5.29m, just below the 5.30m forecast.
In other news, according to Barron's this weekend, money managers who took part in its autumn survey expect the S&P 500 and Nasdaq to both gain 5% to approximately 1,824 and 4,116 points, respectively, by the next June. The Dow is seen rising 7% during that time.
McDonald's falls after Q3 miss
Fast-food chain McDonald's was in the red after third-quarter profits rose 4.6% to $1.52 a share, slightly below the consensus forecast for $1.51. The company saw revenue increase 2.4% to $7.32bn (forecast: $7.43bn). Following global same-store sales growth of 0.9% during the period, McDonald's warned that October would be more or less flat.
Telecoms giant AT&T was higher after the news that it has agreed to lease around 9,100 of its towers and offload another 600 to Crown Castle for $4.85bn.
US Steel gained this morning despite saying it will be hit by a $1.8bn writedown for its North American flat-rolled and Texas operations in the third quarter. Market reports have suggested that the cash could be used to finance an expansion in Europe.
JP Morgan Chase edged higher after agreeing to pay $13bn to end US civil probes of its mortgage-bond instruments.
Phone-equipment manufacturer Tellabs jumped after saying it will be taken private by Marlin Equity Partners in a deal valued at about $891m, for a 4.3% premium to Friday's closing price.