Spain Announces Cuts: Market Happenings for Wednesday, July 11, 2012

Premarket, futures are up as Spain announces drastic cuts on its path to fiscal responsibility. Gainers this morning include ANF (+4.97%), JDSU, JNPR, ANR and NBR while losers include WY (-6.81%), BBY, LIFE, GILD and SPLS.

The Market

Prime Minister Mariano Rajoy said the country would cut €65 billion ($79.6 billion) in less than three years by reducing government and raising taxes, requiring austerity and more efficiency. He said they will significantly reduce the number of public institutions.

His speech came after European finance ministers agreed on Monday to offer the struggling country an initial €30 billion by the end of the month to help bail out its troubled banks. Yields for Spanish 10-year bonds, which have hovered around the perilous 7% level in recent weeks, fell to 6.67% Wednesday.

European stocks were mixed in midday trading and Asian markets ended mixed.

The U.S. trade deficit came in at $48.7 billion in May, just slightly below expectations. Dropping from $50.1 billion the prior month.

The Federal Reserve will release its minutes at 2 p.m. ET.

JPMorgan reports earnings Friday and the bank is expected to show how much it has lost so far due to the risk taking of its London Whale trader.

The national average price of gasoline rose two-tenths of a cent to $3.383 per gallon.

DJIA Stock of the Day – AT&T (T).

Earnings Reports

Earnings reports: SCHW-Schwab (Consensus $0.18), MAR-Marriott (0.42).

Financial Calendar

0700 ET Weekly MBA mortgage applications, previous -6.7% with purchase sub-index +0.6% and refi sub-index -8.4%.

0830 ET May U.S. trade deficit expected -$48.5 bln, Apr -$50.1 bln.

1000 ET May wholesale inventories expected +0.3%, Apr +0.6%.

1030 ET DOE Weekly Petroleum Status Report.

1300 ET Treasury auctions $21 billion in 10-year T-notes.

1400 ET FOMC June 19-20 meeting minutes.

1540 ET Fed’s Williams speaks in Portland, Oregon.

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