China’s economic expansion slowed in the third quarter to its weakest pace since early 2009, but core domestic drivers of growth remained robust, suggesting little chance that monetary policy can be relaxed near term.
Gross domestic product rose 9.1 percent in the third quarter from a year earlier, moderating from 9.5 percent in the previous quarter as the pace of exports softens. The rise was slightly below forecasts for a 9.2 percent increase.
IBM’s quarterly results failed to impress investors used to a stellar showing from Big Blue, adding to concerns about lackluster corporate IT spending and dragging its stock down more than 3 percent.
The company’s earnings beat forecasts and it increased its 2011 earnings-per-share outlook but it faced a high hurdle after recent strong reports from Oracle and Accenture, and analysts focused on slower expansion in key regions and businesses.
Further stoking worries about IT spending, business software maker VMware Inc posted quarterly profit above expectations but warned of uncertainty among some of its corporate customers in Europe.
DShort
Last week’s optimism appears to have evaporated; at least that’s what the Monday market results suggest. The S&P 500 hit in intraday low at 1198.55 but rallied in the final minute of trading to close above 1200 at 1200.86, a loss of 1.94% for the day.
Year-to-date the index is in the red at -4.51% and 11.94% below the interim high of April 29.
From an intermediate perspective, the index is 77.5% above the March 2009 closing low and 23.3% below the nominal all-time high of October 2007.
Economics:
- At 8:30 a.m. ET we get the producer price index for September. Economists think wholesale prices rose a little bit after being unchanged in August. Inflation’s really not the problem right now.
- At 9:00 a.m. we get Treasury International Capital data for August, and everybody freaks out for a second about whether China is buying Treasurys or not. They are.
- At 10:00 a.m. we get the NAHB Housing Market Index for October. Some hints about how economists expect this number to look: One word, three letters, rhymes with “sad.”
FedSpeak, Etc:
- 10:00 a.m.: Treasury Secretary Tim Geithner testifies before the Senate Committee on Small Business and Entrepreneurship about the Small Business Jobs Act.
- 1:15 p.m.: Ben Bernanke speaks at a Boston Fed conference.
- 4:30 p.m.: Atlanta Fed President Dennis Lockhart speaks.
Earnings:
- Genuine Parts
- Intuitive Surgical
- Omnicom
- State Street
- UnitedHealth
- Parker Hannifin
- Coca-Cola
- Johnson & Johnson
- Harley-Davidson
- Forest Laboratories
- Apple
- CSX
- Intel
- Juniper Networks
- Linear Technology
- Yahoo
- Bank of America
- EMC
- W.W. Grainger
- Goldman Sachs