Stocks: U.S. stock indexes opened higher on Tuesday as better-than-expected earnings from Wal-Mart (N:WMT) and Home Depot (N:HD) allayed fears of a retail slowdown after last week's sharp selloff in the sector.

 

The Dow Jones industrial average (DJI) rose 12.5 points, or 0.07 percent, to 17,495.51, the S&P 500 (SPX) gained 1.34 points, or 0.07 percent, to 2,054.53 and the Nasdaq Composite index (IXIC) added 6.70 points, or 0.13 percent, to 4,991.32.

Commodities: Oil prices fell on Tuesday, erasing gains linked to security fears after the Paris attacks, as investor focused again on the global oversupply in crude and petroleum products that is showing no signs of abating.

Analysts said that despite the deadly Paris attacks and French retaliation against Islamic State (IS) in Syria, prices would remain low for the rest of the year and into 2016 as oil markets stay oversupplied.

Forex: The dollar continued to hover at seven-month highs against the other major currencies on Tuesday, after upbeat U.S. inflation data added to hopes that the Federal Reserve will raise interest rates at its meeting next month.

USD/JPY edged up 0.12% to one-week highs of 123.32.

Economic Indicators:U.S. consumer prices increased in October after two straight months of declines as the cost of gasoline and a range of other goods rose.

The Commerce Department said the consumer price index rose 0.2% last month, in line with economists' forecasts. The modest uptick in inflation could offer more support to expectations that the Federal Reserve will hike interest rates next month.

Economic Indicators: Industrial production in the U.S. fell for the third straight month in October, dampening optimism over the health of the economy, official data showed on Tuesday.

In a report, the Federal Reserve said that industrial production decreased by a seasonally adjusted 0.2% last month, disappointing expectations for a gain of 0.1%. Industrial production fell by 0.2% in September. Meanwhile, manufacturing production rose by a seasonally adjusted 0.4%, beating forecasts for a 0.2% increase and following a decline of 0.1% in September.

 

The report also showed that the capacity utilization rate, a measure of how fully firms are using their resources, dipped to 77.5% in October from 77.7% a month earlier, in line with expectations.

 

 

 

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Finally! Some good news from a retailer getting ready for the holidays. Walmart reported sales and earnings on Tuesday that topped Wall Street's forecasts.

Walmart is fighting the losing trend. Several prominent retailers have already reported poor results recently, including Macy's (M), Gap (GPS) and Nordstrom (JWN).

That has led to concerns that retailers may have to use massive discounts to lure shoppers in their stores this holiday season, promotions that could crush these companies' already wafer-thin profit margins.

Still, it's not as if expectations were all that high for the company. Walmart warned last month that sales would be weak and that wage hikes it announced earlier this year would hurt its profits. The stock is down 33% this year, making it the worst performer in the Dow.

Warren Buffett's Berkshire Hathaway (BRKB) disclosed on Monday that it cut its stake in the retailer in the third quarter, before the earnings warning. Walmart did report its fifth consecutive quarter of same-store sales growth in the U.S. And store traffic rose 1.7%. Those are encouraging signs.

CEO Doug McMillon said in the company's earnings release that the company is "taking the right steps to win with customers." But he conceded that Walmart still has "work to do." Competition from Amazon (AMZN, Tech30) has also hurt Walmart, along with other retailers. Walmart is investing heavily in its own online retailing operations. Growth, however, has been slow.

The company said that e-commerce sales were up only 10% from a year ago. Walmart cited "pressures in key international markets." The strong dollar is a problem for Walmart -- which generates about a quarter of its sales overseas. Nonetheless, Wall Street seemed relieved that the company's results were not worse. Neither was its outlook.

The company said that it expects fourth quarter earnings to be in a range of $1.40 to $1.55 a share. The current consensus estimate of analysts for the quarter is $1.43 a share.

Shares of Walmart (WMT) rose more than 2.5% in premarket trading on the news.

Walmart is the first of several big retailers to report its quarterly sales and outlook this week. Target (TGT) and Best Buy (BBY) are on tap to release their results later this week.

 

 

 

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What is it? Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.

When? At 8:30am Eastern Time.

Trading Tip: If the actual number is higher than the forecast, you can expect the USD to rise.

 

 

 

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Marriott International Inc. will buy Starwood Hotels & Resorts Worldwide Inc for $12.2 billion to create the world's largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.

The combined company will own or franchise more than 5,500 hotels with 1.1 million rooms worldwide and give Marriott greater presence in markets such as Europe, Latin America and Asia including India and China.

Marriott currently has three-quarters of its rooms in the United States. Starwood, which also owns St. Regis and Aloft hotel brands, gets nearly two-thirds of its revenue from outside the country.

Starwood shares fell 5.2 percent to $71.07 in premarket trading on Monday, below the offer price of $72.08, indicating investors were unhappy with the offer being at a 4 percent discount to the stock's Friday close. Marriott shares fell 1.3 percent to $71.65.

"We have been in the business for a long time but Starwood is more global than Marriott is," Marriott Chief Executive Arne Sorenson, who will lead the combined company, told CNBC. "It's a good thing that we will have more sources (of growth) from around the world."

Starwood had essentially put itself up for sale in April, when it said it was considering strategic alternatives, taking about 14 percent off its stock up to Friday's close.

The company, which had a market value of $12.67 billion as of Friday, had reached out to InterContinental Hotels Group Plc (IHG.L), Wyndham Worldwide Corp (WYN.N) and sovereign wealth funds for a possible deal since July, sources had told Reuters.

Starwood's shareholders will get 0.92 Marriott Class A share and $2 in cash for each share held. They will also get about $7.80 per share from the spinoff of Starwood's timeshare business and subsequent merger with Interval Leisure Group Inc (IILG.O), announced in February.

Marriott said it expected one-time transaction cost of $100 million-$150 million related to the acquisition, which was expected to add to earnings from the second year after it closes.

After the transaction closes, the company is expected to add three Starwood members to its board, which will expand to 14 members. The deal is expected to close in mid-2016, the companies said.

Lazard and Citigroup advised Starwood on the deal and Deutsche Bank Securities advised Marriott.

 

 

 

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Stocks: U.S. stock indexes opened slightly lower on Monday after recovering most of their weekend losses following Friday's attacks in Paris.

The Dow Jones industrial average (DJI) fell 20.38 points, or 0.12 percent, to 17,224.86, the S&P 500 (SPX) lost 1.98 points, or 0.1 percent, to 2,021.06 and the Nasdaq Composite index (IXIC) dropped 12.21 points, or 0.25 percent, to 4,915.68.

Stocks: Marriott International Inc (O:MAR) will buy Starwood Hotels & Resorts Worldwide Inc (N:HOT) for $12.2 billion to create the world's largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.

The combined company will own or franchise more than 5,500 hotels with 1.1 million rooms worldwide and give Marriott greater presence in markets such as Europe, Latin America and Asia including India and China.

Forex: The dollar held gains against the other major currencies on Monday, despite the release of downbeat manufacturing activity data from New York, as growing expectations for a December rate hike by the Federal Reserve continued to support the greenback.

EUR/USD slid 0.32% to six-month lows of 1.0740.

The Federal Reserve Bank of New York reported that its general business conditions index improved to -10.7 this month from a reading of -11.4 in October. Analysts had expected the index to rise to -6.0 in November.

Japan’s Economy: Japan's economy fell back into a recession in the third quarter, according to official figures released on Monday. The weak data underlined how government policies have struggled to bolster growth in the world’s third-largest economy.

Japan’s gross domestic product shrank by an annual 0.8% in the three months to September, after a 1.2% contraction in the second quarter. Two consecutive quarters of declines mark a technical recession. The data added to pressure on the government and the Bank of Japan to expand a stimulus package championed by Prime Minister Shinzo Abe.

Economic Indicators: The New York Federal Reserve’s index of manufacturing conditions contracted for the fourth straight month in November, dampening optimism over the strength of the economy, official data showed on Monday.

In a report, the Federal Reserve Bank of New York said that its general business conditions index improved to -10.7 this month from a reading of -11.4 in October. Analysts had expected the index to rise to -6.0 in November.

 

 

 

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