Happy Halloween! Let's talk about what's moving the markets this morning.
The macro view
There are at least four reasons we could witness a volatile session in stocks today as markets resume trading after a historic two-day closure due to hurricane Sandy. However, investors appear to be in a sunny disposition this morning, with the Dow Jones Industrial Average (INDEX: ^DJI ) and the broader S&P 500 (INDEX: ^GSPC ) up 0.36% and 0.17%, respectively, as of 10:15 a.m. EDT.
Still, according to data compiled by Bloomberg, the trailing-12-month profit margin for the S&P 500 (excluding banks) declined from 9% to 8.9% -- the first retreat following a three-year period that saw margins widen 1.6%. Knowing that that three-year run witnessed the largest expansion ever recorded makes me feel a bit better about being much too early in emphasizing the risk that profits margins would revert to the mean.
The micro view
General Motors (NYSE: GM ) reported third-quarter results before the opening, earning $0.93 per share (excluding one-time items), smashing expectations of $0.60. Performance was strong worldwide -- with the notable exception of Europe, where the automaker expects to lose between $1.5 billion and $1.8 billion this year.
It was a similar story for competing auto manufacturer Ford (NYSE: F ) , which reported its results yesterday. Ex-items, Ford earned $0.40 per share against a consensus estimate of $0.30 but announced plans to close three European plants in order to stem losses in the region the company predicts will reach $3 billion over two years. This month, Fool analyst Brendan Byrnes wrote that "the recent dip in Ford's share price presents an extremely attractive entry point for long-term investors." Click here to request his premium report on the stock, along with a full year of updates on how Ford's story unfolds over the next 12 months.