Stocks storm back from sharp losses

The Dow ends up 2 points after briefly falling as many as 108 points. Caterpillar sees the world economy slowing faster than expected. Apple leads tech stocks higher. Freeport-McMoRan Copper & Gold misses Street estimates.

By Charley Blaine Oct 22, 2012 12:42PM
Charley BlaineUpdated: 8 p.m. ET

Stocks rebounded completely from sharp midafternoon declines today after construction-equipment-maker Caterpillar (CAT) cut its outlook for the second time this year, warning the global economy was slowing faster than it had expected.

The Dow Jones Industrial Average ($INDU) was briefly down as many as 108 points before new buying set in -- and then accelerated. The index had been held back by weakness in General Electric (GE), MSN Money publisher Microsoft (MSFT) and JPMorgan Chase (JPM).

Technology shares, however, were mostly higher, led by Apple (AAPL), which is expected to unveil a new mini-iPad on Tuesday. The company also reports fiscal-fourth-quarter results after Thursday's close.

Yahoo
(YHOO) shares were up 73 cents, or 4.6%, to $16.50 after hours. New CEO Marissa Mayer cheered analysts by saying she wants the company to have a coherent mobile advertising strategy. Plus, she wants to focus the company around "daily habits" of
users such as email, the home page, Internet search and mobile devices."

The Dow closed up 2 points to 13,346. The Standard & Poor's 500 Index ($INX) was up 1 point to 1,434, while the Nasdaq Composite Index ($COMPX) moved up 11 points to 3,017. The Nasdaq-100 Index ($NDX) gained 16 points to 2,695. Apple, the biggest influence on the index, was up $24.19 to $634.03.

Article continues below.
The trigger for the rebound appears to have been technical. The Dow and S&P 500 both fell  below their simple 50-day moving averages and promptly bounced higher, probably because computerized trades automatically kicked in. The 50-day moving average is a key measure of investor confidence.

Likewise, Apple bounced higher after dropping to $610.76, very near its 150-day moving average.

Apple and Yahoo may give the market a boost on Tuesday. In addition to an Apple media event, the market will deal with pre-market earnings reports from DuPont (DD), United Parcel Service (UPS), United Technologies (UTX) and appliance-maker Whirlpool (WHR). After the close, Facebook (FB) and Norfolk Southern (NSC) will report third-quarter results.

Futures trading suggests the market will open higher.

Yahoo's Mayer cheers the Street
Yahoo reported earnings of 35 cents a share in the third quarter on an adjusted basis, up from 21 cents a year ago and 10 cents better than expected. Revenue less payments to partners was up 2% to $1.09 billion.

These results excluded a $2.8 billion gain related to the sale of Alibaba Group shares.

Mayer said Yahoo would work more closely with software provider and Web search partner Microsoft, while employing technology to shore up its display ads business through such features as automated buying.

She added that Yahoo is likely to begin withdrawing from international businesses that fail to grow. This month, executives said the company will pull out of South Korea, a market full of local rivals. And she said that the company would primarily focus on "smaller-scale" deals to bolster Yahoo's products. That relieved some investors who feared the company could embark on an expensive shopping spree, Reuters said.

In regular trading, Yahoo finished down slightly to $15.77.

Texas Instruments struggles with slowing demand
Texas Instruments
(TXN) shares were down 0.4% to $27.67 after hours. The chip maker said quarterly revenue fell as demand for its chips slipped on economic concerns. The company forecast more weakness in the fourth quarter.

"Across the board, we're seeing customers being extremely cautious, very careful about the level of inventory that they hold so giving us very low levels of visibility as to what they'll want to order for the quarter," TI CFO Kevin March told Reuters.

TI's chips are used in mobile devices, consumer electronics and industrial equipment. TI earned $784 million, or 67 cents a share, up from $601 million, or 51 cents, a year ago. Revenue fell to $3.39 billion from $3.47 billion.

TI forecast fourth-quarter earnings of 23 to 31 cents a share on revenue of $2.83 billion to $3.07 billion. Analysts had expected revenue of $3.24 billion, Reuters said.

Global fears weigh on markets
The market struggled all day because of global economic worries. In addition, investors were awaiting tonight's debate between President Barack Obama and former Massachusetts Gov. Mitt Romney. Crude oil in New York (-CL) fell below $89 a barrel in New York, but gold (-GC) was up slightly.

Thanks to the rebound in the last half-hour of trading, the major averages avoided a third straight day of declines. The market slumped on Friday, with the Dow off 205 points, its biggest one-day loss since June.

General Electric was down 33 cents to $21.70. Microsoft was off 64 cents to $28 as investors fretted about the sales of software in its Windows division, which fell in the fiscal fourth quarter, Reuters said. In addition, Barron's wondered about the company's prospects in the post-personal-computer world. (Registration may be required.)

Peter Kenny, a managing director at Knight Capital, told Reuters that investors are hesitant to make any bets until after the U.S. presidential election on Nov. 6. In addition, worries about the eurozone are a big concern.


"Once we have some clarity on the political front, I think people are going to be more than willing to put some bets on the table," he said.


Energy prices -- New York close



Mon.     Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$88.65

$90.44

-3.84%

-10.30%
(per barrel)











Heating oil (-HO)

$3.0668

$3.1176

-2.92%

5.24%
(per gallon)











Natural gas (-NG)

$3.4520

$3.6170

3.98%

15.49%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6348

$2.6721

-9.77%

-0.85%
(per gallon)











Brent crude 

$109.85

$110.14

-0.26%

2.30%
(per barrel)











Retail gasoline

$3.6650

$3.6760

-3.22%

11.87%
(per gallon; AAA)












Oil moves lower; gold rebounds

Crude oil settled down 84 cents to $89.60 a barrel in New York. Brent crude was down 29 cents to $1.09.85 a barrel. Gold was up $2.60 to $1,726.60 an ounce.


The national average price of gasoline was $3.665 a gallon, down from $3.676 on Sunday, according to AAA's Daily Fuel Gauge Report.


The 10-year Treasury yield was up slightly to 1.799% from Friday's 1.768%.

The dollar was lower against the euro in part because a regional election in Spain was seen as helping the country clear a hurdle for international aid to ease the eurozone debt crisis.

Caterpillar's guidance is a worry
Caterpillar reported better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment. But the company offered a disappointing outlook.

The company doesn't expect to see overall economic growth until the second half of 2013. The U.S. economy should grow 2% next year (admittedly, an anemic rate), with construction producing much of the gains, the company said. It sees economic weakness across Europe. China should grow 8.5%, and Latin America will grow 4%.

The outlook was similar to what General Electric offered when it reported results on Friday.

For the third quarter, Caterpillar earned $1.7 billion, or $2.54 a share, up from $1.14 billion, or $1.71 per share, a year ago. Revenue rose 5% to $16.45 billion. Analysts had been looking for $16.77 billion. Excluding one-time charges, the company earned $2.26 a share, ahead of the consensus analyst estimate of $2.22.

For 2012, the company expects to earn $9 to $9.25 a share on sales of $66 billion. It had earlier projected $9.60 per share. The Street estimate was $9.40 with revenue of $67.64 billion.

Freeport-McMoRan, SunTrust slide on earnings misses
Freeport-McMoRan Copper & Gold (FCX), the world’s biggest publicly traded copper producer, was down 60 cents to $40.58, and SunTrust Banks (STI) fell 96 cents to $27.67 after reporting earnings that missed analysts’ estimates.

Freeport's miss was its first in 17 quarters. The company cited higher costs and lower gold sales. CEO Richard Adkerson was a bit skeptical in a CNBC interview about whether Chinese demand will ramp up any time soon.

Peabody Energy (BTU), the largest U.S. coal producer, increased $3.06 to $28.95 after earnings beat analysts’ projections. The stock was the top performer in the S&P 500.

Ancestry.com (ACOM) surged $2.26 to $31.44, after Permira Advisers agreed to buy the company in a deal valued at about $1.6 billion.

Hasbro's (HAS) third-quarter net profit fell 3.6% as strong sales for My Little Pony and Marvel-related gear couldn't fully offset declines for Transformers, Beyblade and preschool gear. Still, the result beat Wall Street estimates, and Hasbro closed down 66 cents to $38.39.

Pfizer (PFE) agreed to acquire privately held NextWave Pharmaceuticals, a deal that includes the recently approved Quillivant XR — the first once-daily liquid treatment for attention deficit hyperactivity disorder. The deal is worth as much as $700 million. Pfizer was down 16 cents to $25.60.

Russian energy giant Rosneft reached separate agreements to buy the entirety of oil venture TNK-BP from BP (BP) and a group of Soviet-born billionaires, an acquisition that promises to reshape the Russian oil industry. The deal is worth some $61 billion. BP was off 45 cents to $42.65 in New York.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.100%

0.00%

800.00%
5-year Treasury note 

0.779%

0.751%

23.65%

-6.14%
10-year Treasury note

1.798%

1.768%

9.84%

-3.90%
30-year Treasury bond

2.947%

2.937%

-2.80%

2.01%
Currencies











U.S. Dollar Index

79.736

79.688

-0.36%

-0.98%
British pound

1.6010

1.6015

-0.93%

3.04%
(in U.S. $)

 








U.S. $ in pounds

£0.625

£0.624

0.94%

-2.95%
Euro in dollars

$1.31

$1.30

1.58%

0.77%
(in U.S. $)

 








U.S. $ in euros

€ 0.766

€ 0.768

-1.56%

-0.76%
U.S. $ in yen 

80.06

79.28

2.69%

3.84%
U.S. $ in Chinese

6.28

6.25

-0.09%

-0.80%
yuan











Canada dollar

$1.008

$1.006

-0.89%

2.71%
(in U.S. $)

 








U.S. dollar 

$0.993

$0.994

0.97%

-2.64%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,726.30

$1,724.000

-2.68%

10.18%
(per troy ounce)

 








Copper (-HG)

$3.622

$3.638

-3.62%

5.41%
(per pound)

 








Silver (-SI)

$32.2520

$32.097

-6.72%

15.54%
(per troy ounce)

 








Wheat (-ZW)

$8.7825

$8.725

-2.69%

34.55%
(per bushel)

 








Corn (-ZC)

$7.6125

$7.615

0.66%

17.75%
(per bushel)

 








Cotton 

$0.7693

$0.769

8.89%

-16.09%
(per pound)

 








Coffee

$1.6450

$1.617

-5.19%

-28.37%
(per pound)

 








Crude oil (-CL)

$88.65

$90.440

-3.84%

-10.30%
(per barrel)










 

524Comments
Oct 22, 2012 1:16PM
avatar
We must as a nation become energy independent by utilizing our natural resource natural gas right away. It is our #1 competitive advantage in international trade. We also need to reduce the size of government 50%. These 2 actions would lead to a return of economic growth.
Oct 22, 2012 1:18PM
avatar
I don't want to buy a car from a bailed out car company or do business with bailed out banks.
Oct 22, 2012 1:07PM
avatar

As the stock market and the economy take a nose dive in the next couple of weeks, so does Obama's chances of getting re-elected!!

 

President Romney ...... I like the sound of that.

Oct 22, 2012 1:22PM
avatar
"The Arab Spring"

"The Summer of Recovery"

"The Fall of Obama"

That last one's got a really nice ring to it........................................
Oct 22, 2012 1:30PM
avatar
So Obama claims that on Aug. 12th, he called it an act of terrorism.

On Oct. 10th Biden said in the debate that on Aug 11th, Intel told them it wasn't a Terrorist attack.

If that's true, which is doubtful based on State Dept. comments since, why would Obama have called it that?  He didn't. He was speaking in general terms.

What's worse, the State Dept. watched it Live! But Our Catastrophe in Chief was unaware of the details?  
Circle of Lies..............
Oct 22, 2012 1:40PM
avatar
Enbeaver said;
"Who will Romney be tonight? "

The guy beating Obama's azz.........................
Oct 22, 2012 1:13PM
avatar
Enbeaver said;
" I just looked out the window at him for a while, until he fell asleep in the car.  Doesn't Mutt know that when he is asleep behind the wheel that he isn't going anywhere?  Stupid dog."

So, you let your dog run your car?
Clearly you don't know that if you let your dog drive your car, while you sit and "Look at him", you're screwed!!!!!!
What a friggin' moron! No wonder you'd let Obama run your country!!!!!!!!!!!!!
Oct 22, 2012 1:15PM
avatar
RoyalFlush said;
"Biden came to FL. they closed some exits on Rt 75. He went to Sun City."

LMAO!
Should have closed them all! Maybe he'd have gone to Cuba! 
Nah, that would help Obama!
Oct 22, 2012 1:55PM
avatar

As millions are fighting to find jobs, Barry just gave out 4500 work visas to illegals so they can take jobs that should go to Americans??? Why?

After Barry has spent over one billion dollars on his campaign ... he just got a loan from Bank of American for $15 million more?? Seriously??

Barry promised "never to raise taxes on any people making less than $250,000,"  but in Jan he has taxes coming for 163 million Americans, most making less than $250,000? Liar??

Economy and stock market are hitting the skids ... say bye, bye Barry!! Yeah.

Oct 22, 2012 1:28PM
avatar
The stock market has been doing so great  in the past few years is because Bernenki dont raise interest rates everytime the dow climbs 500 points.  Since the downfall in 2008 how many times have interest rates changed ?   Isnt this inflation when the dow climbs 5000 points  in just a few years ? No interest rate change ?  And whos controling the markets / ecomomy ?
Oct 22, 2012 1:19PM
avatar
Can't wait for the debate this evening. Two clueless politicians arguing over important stuff like "Why does the entire world hate America? " and  "I can fix that". Should be scintillating!
Oct 22, 2012 1:22PM
avatar
Why not let the oil speculators run Wall Street.The worlds economies have been in the toilet for months and months,but they keep oil way over its value and demand.I bet with all the BS they come up with they could keep the market in the 14000 range.
Oct 22, 2012 2:35PM
avatar
CL, 
Hugo said he'd vote for Obama!

He just might, 'cause we can't ask him for ID to prove he's a citizen!!!!!!!!!!
Oct 22, 2012 1:40PM
avatar
endeavor     as the clown to the LEFT ?
Oct 22, 2012 3:45PM
avatar

If politics has nothing to do with gas prices then someone please explain to me how a gas station in our town dropped the price 30 cents in one day. That's right 30 CENTS. That is just unheard of, ever!!!! This country is so crooked, why can't intellegent people see what's going on. We have got to get Obama out of the White House. Whether you like Romney or not we have to have a change or our great country won't exist in 4 more years.

 

 

Oct 22, 2012 2:35PM
avatar

Jeff R;

 

Right on!  People on welfare today live better than my grandfather working menial jobs & raising a family in post war (WWII) Chi Town.  Strangely,  he failed to blame the 1%ers.   

 

 

Oct 22, 2012 3:39PM
avatar

Since the 1970's we have been supplying the middle east oil cartel U.S. technology in drilling, completion, geology and drilling fluids.  What have we got in return?  OPEC who controls every inch of the energy economics of the world.  If that wasn't enough we educated them in our universities.

We have the most abundant natural gas resources in the world.  We have the most knowledgable oil and gas people on the planet.  Energy independence would turn our economy around in a few short years.  It's cheap, clean and would provide for millions of jobs for years to come.

Oct 22, 2012 2:26PM
avatar
Obama needs to come clean on his war on women

Obama's White House

Men make more than 16% more than his women. 
Oct 22, 2012 2:13PM
avatar
"Barack Obama chose to ram down the nation's throat a polarizing, statist agenda, energized by the sort of hardball politics he had learned in Chicago. Rather than bring the races, classes, and genders together, he gave us an us-versus-them crusade against the '1 percenters' and the job creators who had not 'paid their fair share,' accusations of a Republican 'war on women,' and the worst racial polarization in modern memory. Statesmanship degenerated into chronic blame-gaming and 'Bush did it,' as he piled up over $5 trillion in new debt. Financial sobriety was abandoned in favor of creating new entitlement constituencies, and job creation was deemed far less important than nationalizing the health-care system. And so here we are, three weeks before the election, with a squandered presidency and a president desperately seeking reelection not by defending his record, but by demonizing his predecessor, his opponent -- and half of the country. What, then, was Obama's first term? Jimmy Carter's ends justifying Richard Nixon's means." --historian
Oct 22, 2012 1:47PM
avatar

This country will never go anywhere until people decide they want to "work"  .  My small town (5000 Population ) paper .... over 60 high paying jobs listed....welders.. machanics needed. But people cant pass the drug tests......or just dont want to work !!!   And we expect to keep living this life style ?  Get a life !  Talk about  china .. india....etc  taking jobs..or  mexicans ?  Who else will do the work ?

In America work is know as having a golfing membership...bowling..  etc. Thats our work ( out )  !

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[BRIEFING.COM] The stock market finished the Tuesday session on the defensive after spending the entire day in a steady retreat. The S&P 500 (-0.6%) posted its third consecutive decline, while the small-cap Russell 2000 (-0.9%) slipped behind the broader market during afternoon action.

Equity indices were pressured from the start following some overnight developments that weighed on sentiment. The market tried to overcome the early weakness, but could not stage a sustained rebound, ... More


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