European markets slid in late trading today as investors eyed U.S. data, the end of the second quarter, and more comments from the Federal Reserve. Fed officials have been on damage control all week after the market reacted sharply to Chairman Ben Bernanke's comments about potentially slowing an $85 billion bond-buying program later this year. Long-term interest rates shot higher and the Fed has been sending its team out on a speaking tour to calm down markets and assure investors that they won't allow rates to rise high enough to slow the economy.
Today, three more Fed officials are due to speak, and the market appears to be receiving the calming words well. Dow Jones Industrial Average (DJINDICES:^DJI) futures are up 0.2% at 7 a.m. EDT and the S&P 500 (SNPINDEX:^GSPC) has also gained 0.2%.
The reason the Fed is on a PR campaign is the impact that higher interest rates could have on the economy. Last week I highlighted that a 1% rise in mortgage rates can lead to a 12% rise in monthly payment, something that directly impacts consumers. So, everyone from big business to the individual consumer has an incentive to keep rates low for now, which has been the Fed's goal all week.
On a company level, it looks like BlackBerry (NASDAQ:BBRY) will be a big mover today, with shares already down 18% in premarket trading. The company reported an $84 million loss, or $0.16 per share, which was better than the $518 million loss a year ago but not exactly a sign the company is on its way to profitability. BlackBerry made a big bet on its new Z10 and Q10 in an effort to catch up in the smartphone market, but it doesn't appear to be paying off. BlackBerry has been relegated to has-been status and I doubt it will ever get its old cachet back.
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