Stocks and exchange traded funds (ETFs) are moving into slightly positive territory this morning after an index of economic activity signaled that the economy will continue to grow next year.
The Conference Board’s index of leading economic indicators rose 1% in September. This follows a 0.4% gain in August and it’s the sixth straight gain for the index, reports the Associated Press. Economists predict that the economy grew about 3% in the third quarter, but there are questions about whether this is sustainable as unemployment continues to rise and consumers don’t spend.
Earnings continued to pour in, with mixed results:
- Merck (NYSE: MCK) posted a bigger third-quarter profit thanks to slight rise in sales and a gain after selling one of its divisions to clear a merger with Schering-Plough Corp. The sale brought in $2.8 billion.
- AT&T (NYSE: T) reported that its wireless business is thriving, thanks to phenomenal sales of the iPhone. The provider added 2 million subscribers in the third quarter, blasting predictions.
- UPS (NYSE: UPS) reported a third-quarter earnings decline of 43% on declining revenue. The shipper’s CEO said there were signs of recovery, but they’re still holding off on calling a turnaround in demand.
iShares S&P Global Telecommunications (NYSEArca: IXP) is up about 1% this morning; AT&T is 15.3%
iShares Dow Jones Transportation Average (NYSEArca: IYT) is down about 1.5% this morning; UPS is 8.2%
Oil prices took a step back from 2009 highs and dropped below $80 a barrel. A steadier U.S. dollar is having an impact on retreating prices, since oil is priced in greenbacks. (ETFs for when the dollar weakens).
For more stories on oil, visit our oil category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.