ECB cuts rates; Apple under pressure; Tesla’s big move
Stocks in Europe and the United States were pointing higher after the European Central Bank cut its benchmark interest rate to a new record low of 0.05% from a previous record of 0.15%. The ECB also cut its deposit rate to -0.2% from -0.1% in an effort to encourage banks to lend money rather than holding it in ECB accounts. After the announcement, the euro fell to its lowest level in more than a year.
Meanwhile, private sector employers added 204,000 jobs in August, according to the latest monthly report from ADP. That pace was slower than the 223,000 economists were expecting, but there was encouraging news in manufacturing, with 32,000 jobs added last month. That is the strongest monthly performance since December 2012. Jobless claims rose by 4,000 to 302,000, roughly in line with what economists were expecting. Wall Street will be watching closely for the Labor Department’s employment report for August, which is expected on Friday at 8:30am ET.
Stocks to watch
Among the stocks the Yahoo Finance team will be watching for you today: Yum Brands (YUM). The fast food chain operator said it expects same-store sales in China to fall 13% in its third quarter. The company had previously warned that issues with a food supplier in China caused a “significant, negative impact” on KFC and Pizza Hut sales in the country. China is Yum’s biggest market, where it generates half its revenue.
Another stock to watch today is Family Dollar (FDO). Reuters reported that billionaire investor Carl Icahn sold the rest of his stake in the dollar store chain. Icahn’s investment in the company is worth about $200 million, according to Reuters. Icahn pushed Family Dollar to sell itself after disclosing a majority stake in the company. Family Dollar is currently at the center of competing takeover bids from rivals Dollar General (DG) and Dollar Tree (DLTR).
Watch shares of Apple (AAPL), which was lower in early trading after the stock saw its worst day in more than seven months yesterday, down more than 4%. Apple investors have had plenty of news to process this week, including the hacking of celebrity iCloud accounts, as well as Samsung’s latest Galaxy phones. Motorola is expected to unveil its new smartwatch Thursday.
And after much speculation, Tesla (TSLA) reportedly is going to build its $5 billion giga-battery factory in Nevada, which beat out California, Arizona, Texas and New Mexico as the location for the new facility. The company is expected to employ as many as 6,500 workers at the new plant. State officials scheduled a news conference for 4pm ET in Carson City, Nevada.