Janet Yellen, the President’s nominee to replace Ben Bernanke, affirmed Bernanke’s policies and lifted spirits on Wall Street. The Dow gained 54 points, the Nasdaq rose by 7, and the S&P 500 advanced 8. The price of Cisco shares (CSCO) lost nearly 11% after issuing disappointing guidance on Wednesday evening. Twenty-three of the Dow’s 30 components gained ground, led by Home Depot (HD), which rose almost 2%. Volume was light. Advancing issues outnumbered decliners by nine to five on the NYSE, but on the Nasdaq, decliners edged out advancers by a nose. The prices of Treasuries strengthened, and the price of gold futures gained 1.41% to $1,286.30 an ounce. The price of crude oil on the New York Mercantile Exchange lost 0.12% to $93.76 a barrel.
Testifying before a Senate confirmation committee, Janet Yellen, who is President Obama’s nominee to replace Ben Bernanke as chair of the Federal Reserve, praised Bernanke’s record and indicated that she would continue the current program of quantitative easing until the economy shows signs of greater strength. “We’re taking account of the costs and efficacy of that program as we go along. At this point I believe the … benefits exceed the costs,” she said.
In Earnings News:
- Wal-Mart announced earnings of $1.14 a share in the latest quarter, up from $1.08 per share in the same quarter a year ago. But the world’s largest retailer also said the retail environment remains “competitive” and that it expects sales in the holiday season to be “relatively flat” compared with last year. The price of Wal-Mart stock (WMT) eked out a gain of 0.2% in today’s session.
- Kohl’s reported earnings fell from 91 cents a share a year ago to 81 cents a share in the latest quarter and lowered its guidance for its full-year earnings from a range of up to $4.35 a share to a range of up to $4.23 a share. The stock (KSS) lost 8%.
In Other Business News:
- New claims for unemployment benefits edged lower last week by 2,000 to 339,000, according to the Labor Department. It was the fifth consecutive week of declines. The four-week moving average of claims fell by 5,750 to 344,000.
- The Labor Department also reported today that the productivity of the labor force grew at an annual rate of 1.9% in the third quarter. The Department also revised its calculation of productivity growth in the second quarter downward from 2.3% to 1.8%.
- Addressing the troubled rollout of the Affordable Care Act, President Barack Obama said his administration will permit insurance companies to continue coverage in 2014 for policy holders who would otherwise lose their coverage under the terms of the new act. Over one million policy holders have reportedly received notices that their health insurance has been cancelled. It’s not clear if the White House has the authority to override the law or if the policies can be easily reinstated, since they were based on negotiated terms between insurance companies and healthcare providers.
The word in some retail sectors is that smartwatches will be a hot gift item this holiday season. Really? Is there such a critter? What is a “smartwatch” anyway? Apparently, smartwatches do exist, but their hot-ness—or not-ness—is a matter of debate.
A smartwatch is a mobile device like your phone that can be strapped to the wrist. It tells time, of course, but it also performs many of the other things your mobile device performs: It makes calls, gives access to the Internet, provides sports scores, weather, news, etc., etc., blah, blah, blah. The great advantage is that it fits on the wrist and therefore doesn’t need to be constantly retrieved from pocket or purse. The disadvantage is that it is much smaller than most mobile devices, and therefore it has a smaller screen, keyboard, memory, and battery. In other words, it’s a weak but convenient version of the smartphone or tablet.
More than one observer has called the smartwatch a product in search of a market. Nevertheless, there are a number of smartwatches out there: Samsung has “Galaxy Gear” and Sony has “SmartWatch 2.” Qualcomm is expected to introduce one before the end of the year, and rumors suggest both Apple and Google are preparing smartwatches.
Still, my wrist isn’t crying out to be accessorized. In fact, I thought watches were pretty smart when they just told time. I can’t do that. I can’t wake up in the black of night and know that it is, say, 3:12 a.m. When watchmakers added the date and alarm functions, that was good enough for me. Moreover, just in principle, I don’t want anything stuck to my wrist that is smarter than I am. I’m embarrassed enough as it is when my kids are around. So I’m betting the smartwatch is not yet a hot gift item. You watch: The time hasn’t come.