What’s the Story

by CC September 18, 2012 9:18 am • Commentary


U.S. stock futures were little changed, after the Standard & Poor’s 500 Index rose to the highest level since 2007 last week, as investors watched European leaders’ efforts to resolve their debt crisis.

FedEx Corp. (FDX) fell 2.2 percent as it reduced its profit outlook after quarterly earnings fell. Bank of America Corp. (BAC), the second-biggest U.S. lender by assets, slid 0.6 percent. Advanced Micro Devices Inc. (AMD) dropped 8.5 percent after announcing its chief financial officer will resign.


The current-account deficit in the U.S. narrowed more than forecast in the second quarter, helped by a pickup in exports and a bigger income surplus.

The gap, the broadest measure of international trade because it includes income payments and government transfers, shrank 12 percent to $117.4 billion from $133.6 billion in the prior quarter, a Commerce Department report showed today in Washington. The median forecast of economists in a Bloomberg survey called for a $125 billion deficit.


Shares of Dole Food jumped 10% after it struck a deal to sell its world-wide packaged-foods unit and its Asia fresh-produce business for nearly $1.69 billion to Japan’s Itochu Corp. JP:8001 +0.24% , confirming a deal first reported last week that remains subject to approval from Dole shareholders.

Chip-maker Advanced Micro Devices Inc. AMD -8.23% fell a day after the company said its chief financial officer, Thomas Seifert, was resigning.

Traders also kept an eye on Spanish bond yields, which on Monday climbed above 6% for the first time in more than a week as Madrid remained reluctant to seek help from the euro-zone rescue funds—a prerequisite for the bond-buying program outlined this month by the European Central Bank.

On Tuesday, the yield on Spain’s 10-year government bond ES:10YR_ESP -0.68% fell after the country successfully auctioned short-term bills, falling around 0.07 percentage point to 5.90%, according to FactSet.

Shares of Apple Inc. AAPL -.00% were also expected to be in the spotlight after closing at a record high just below $700 on Monday after the company said it had sold out of pre-orders for its new iPhone 5.

The Commerce Department reported the current-account deficit narrowed more than expected in the second quarter. A home builders’ index for September is scheduled for release at 10 a.m. Eastern.

Nymex crude-oil futures CLV2 -0.51% fell 75 cents to $95.87 a barrel in after a sharp fall late in the prior session. Gold futures GCZ2 -0.25% declined $5.00 to $1,765.6 an ounce. Read: Oil stays weak as analysts debate prior-day drop 

The dollar index DXY +0.18% rose to 79.108. The euro EURUSD -0.47% fell to $1.3063, while the dollar dipped versus the Japanese yen USDJPY -0.14% to ¥78.621.

Calculated Risk

The total US for-sale inventory of single family homes, condos, townhomes and co-ops (SFH/CTHCOPS) remained at historic lows, with 1.84 million units for sale in August, down -18.68% compared to a year ago and 40% below its peak of 3.10 million units in September 2007, when Realtor.com began monitoring these markets.

The median age of inventory of for sale listings was 91 days in August, up by 3.41% from July, but -11.65% below the median age one year ago (August 2011). While the median age of the inventory is highly seasonal, the year-over-year decline is consistent with other data showing a significant improvement in market conditions.