Stocks reopen, suffer first monthly loss since May

The Dow loses all of an 82-point gain as Wall Street ramps up after Hurricane Sandy. Recovery prospects boost Home Depot and Lowe's. Apple sags on management turmoil. Cirrus Logic's Apple business boosts profits. Oil and gold move up.

By Charley Blaine Oct 31, 2012 12:56PM

Charley BlaineUpdated: 6:34 p.m. ET


After Hurricane Sandy forced a historic two-day closure, the U.S. stock market reopened today and ended the day modestly lower. As a result, stocks ended October with their first monthly losses since May.

Apple (AAPL) fell below $600 for the first time since July as its big management shakeup -- forcing out the heads of its iPhone operating system group and retail businesses -- weighed on tech stocks.  Walt Disney's (DIS) $4 billion buyout of Lucasfilm, director George Lucas' production company, weighed on the Dow Jones industrials ($INDU). 


But Netflix (NFLX) shares jumped $9.66 to $79.24 after corporate raider Carl Icahn disclosed his Icahn Capital and related entities owned 9.99% of Netflix's shares. The company is undervalued, especially given its international potential, Icahn said in a Securities and Exchange Commission filing.  But he hasn't proposed any major actions.


Meanwhile, the stocks you'd expect to be winners after all the destruction from Sandy were higher. These include Home Depot (HD), Lowe's (LOW), Masco (MAS) and Whirlpool (WHR). Property and casualty insurers, such as Allstate (ALL) and Chubb (CHB), were lower, as adjusters start the process of claims management in the aftermath of a storm that may have caused damages of $20 billion or more.

The Dow closed down 11 points to 13,096. The Standard & Poor's 500 Index ($INX) was up slightly at 1,412. The Nasdaq Composite Index ($COMPX) was off 11 points to 2,977, and the Nasdaq-100 Index ($NDX), dominated by Apple, was off 18 points to 2,648.


The major averages ended the day down roughly 4% from their September peaks.


Article continues below.

After the close, shares of Visa (V) were up $1.74, or 1.3%, to $140.50. The credit-card processor reported an 89% profit gain to $1.66 billion, or $2.47 a share, from $880 million, or $1.27, a year earlier. Earnings adjusted for one-time charges, were $1.54, beating the $1.50 consensus estimate.

Allstate was down 17 cents to $39.98. Shares were unchanged after hours as the company reported decent earnings.

Cirrus Logic (CRUS) shares were up 10 cents after hours to $40.88. The chip maker, whose chips are used in Apple's iPads and iPhones, said sales jumped 91% in the fiscal second quarter to $193.8 million.

Earnings after one-time items hit 79 cents per share, up from 35 cents a year ago. The company sees third-quarter revenue rising to at least $270 million to $300 million in the third quarter. Wall Street has been looking for $238 million.

Stocks stumble in October
The market struggled for most of October. The Dow finished the month with a 2.5% loss, with the S&P 500 off 2% and the Nasdaq down 4.5%.

For the year, however, the Dow is still up 7.2%, with the S&P 500 up 12.3% and the Nasdaq up 14.3%.

One contributing factor to today's decline: The widely watched Chicago Purchasing Managers Index disappointed investors. The index increased to 49.9 this month from 49.7 in September. A reading above 50 signals expansion. Analysts had expected a reading of 51.

The Institute for Supply Management's manufacturing index comes out Thursday.

An overload of data for Thursday
Thursday brings earnings reports from Exxon Mobil (XOM), Cigna (CI), Starbucks (SBUX), Florida real-estate developer St. Joe (JOE) and Royal Dutch Shell (RDS.A).

Auto makers report October sales; Edmunds.com is predicting overall sales of 970,000 units, translating into a seasonally-adjusted sales rate of 12.2 million units, the same as in September.

In addition to the ISM manufacturing report, two important jobs-related reports are due: the Labor Department's weekly report on jobless claims and the ADP National Employment Report, which tracks private-sector employment trends.

But don't look for big market moves before the presidential election on Tuesday.

Crude oil, gasoline and gold futures move up
Light sweet Crude oil
(-CL) in New York settled up 56 cents to $86.24 a barrel. Brent crude, the dominant influence on retail gasoline prices, was down 38 cents to $108.70 a barrel. Light sweet crude fell 6.5% during the month; Brent was off 1%.

Oil refineries in the Northeast were struggling to get back online, and the Colonial pipeline, which ships crude oil to the Northeast from terminals on the Gulf Coast, was shut down.


Wholesale gasoline futures moved higher on the potential for shortages in the Northeast, but retail prices continued to drop, according to AAA's Daily Fuel Gauge Report.


AAA's daily average for unleaded gasoline was $3.521 a gallon, down from Tuesday's $3.534. The price fell 7% for the month but is still up 7.5% for the year.


Gold (-GC) rose $7 to $1,719.10 an ounce. Gold ended October down 3.1%.


Energy prices -- New York close



Wed.     Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$86.24

$85.68

-6.45%

-12.74%
(per barrel)











Heating oil (-HO)

$3.0623

$3.0697

-3.07%

5.08%
(per gallon)











Natural gas (-NG)

$3.6920

$3.6910

11.20%

23.52%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6303

$2.6155

-9.92%

-1.02%
(per gallon)











Brent crude 

$108.44

$109.08

-1.01%

0.99%
(per barrel)











Retail gasoline

$3.5210

$3.5340

-7.02%

7.48%
(per gallon; AAA)












Apple's turmoil pushes shares under $600
Apple was down $8.68 to $595.32 after dropping to as low as $587.70. The shares are down 15% since mid-September and haven't closed below $600 since July 30.

On Monday, CEO Tim Cook forced out Scott Forstall, who was in charge of Apple's mobile operating system iOS and who previously had a close relationship with the late Steve Jobs.

Forstall had refused to sign an apology to Apple customers over the launch of Apple maps in the latest version of iOS, The Wall Street Journal said. Also moved out was John Browett, who had headed Apple's retail business.

Separately, Facebook (FB) was off 83 cents to $21.11 as a 234-million-share lockup expiration originally scheduled for Monday gets under way. Another 777 million shares become available for sale on Nov. 14.

GM and Ford move higher
General Motors
(GM) jumped $2.22 to $25.50. The auto giant reported a third-quarter profit that surpassed analysts’ estimates by more than 50% and said it wants to break even in Europe by mid-decade. Adjusted earnings were 93 cents a share, beating the 60-cent consensus estimate. North American and Latin American profits offsets losses in Europe.

Ford Motor (F) advanced 85 cents to $11.16. On Tuesday, the second-largest U.S. automaker reported third-quarter profit that exceeded analysts’ estimates. Ford's North America unit delivered record earnings that made up for higher taxes and losses in Europe. It was Ford's 14th consecutive profitable quarter.


IBM and Home Depot hold up the Dow
The Dow would have been 20 points lower if not for IBM (IBM), which announced it was adding $5 billion to its share buyback plan, and Home Depot. IBM was up $1.26 to $194.53. Home Depot added $1.34 to $61.38.

In addition to benefiting from the Sandy recovery efforts. Home Depot and Lowe's also will prosper if the nascent housing recovery becomes something larger. So will Fastenal (FAST), which makes fasteners and other tools. 


PVH (PVH) was up $18.49 to $109.99. The company agreed to buy Warnaco (WRC). Warnaco jumped $19.70 to $70.78.


PVH was once Phillips Van Heusen and owns a variety of brands, including Calvin Klein, Tommy Hilfiger, Izod, Bass and Arrow. Warnaco makes swimwear, sportswear and lingerie.


Utility and financial stocks were the market leaders; healthcare and energy were the laggards.


On a percentage basis, Home Depot, Bank of America (BAC) and JPMorgan Chase (JPM) were the Dow's leaders.

Walt Disney was the Dow's laggard, down 96 cents to $49.12 after its deal with George Lucas. Under the new relationship, Lucasfilm will produce a seventh film in the "Star Wars" franchise. Eleven of the 30 Dow stocks were higher.


Netflix was the top S&P 500 performer, followed by Quanta Services (PWR) and Genworth Financial (GNW). Western Union (WU) and Qep Resources (QEP) were the laggards. A total of 287 S&P 500 stocks were higher.


Netflix and Research In Motion (RIMM) were the Nasdaq-100 leaders, with Baidu (BIDU) and Verisign (VRSN) the laggards. Forty-two Nasdaq-100 stocks were higher.


Research In Motion jumped on news it is testing its BlackBerry 10 platform with up to 50 carriers.


Baidu was hit by downgrades. Verisign shares dropped on news of  Justice and Commerce department reviews for Verisign's bid for a six-year renewal of its contract to continue running the .com registry, the Internet's most popular generic top-level domain name.


Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1100%

0.110%

22.22%

1000.00%
5-year Treasury note 

0.715%

0.761%

13.49%

-13.86%
10-year Treasury note

1.686%

1.750%

2.99%

-9.89%
30-year Treasury bond

2.851%

2.918%

-5.97%

-1.32%
Currencies











U.S. Dollar Index

79.987

79.987

-0.05%

-0.66%
British pound

1.6139

1.6088

-0.13%

3.87%
(in U.S. $)

 








U.S. $ in pounds

£0.620

£0.622

0.13%

-3.73%
Euro in dollars

$1.30

$1.30

0.84%

0.04%
(in U.S. $)

 








U.S. $ in euros

€ 0.771

€ 0.771

-0.84%

-0.04%
U.S. $ in yen 

80.00

79.60

2.60%

3.76%
U.S. $ in Chinese

6.26

6.24

-0.33%

-1.04%
yuan











Canada dollar

$1.001

$1.001

-1.54%

2.03%
(in U.S. $)

 








U.S. dollar 

$1.000

$0.999

1.64%

-2.00%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,719.10

$1,712.100

-3.09%

9.72%
(per troy ounce)

 








Copper (-HG)

$3.518

$3.506

-6.40%

2.37%
(per pound)

 








Silver (-SI)

$32.3160

$31.816

-6.54%

15.77%
(per troy ounce)

 








Wheat (-ZW)

$8.645

$8.568

-4.21%

32.44%
(per bushel)

 








Corn (-ZC)

$7.5575

$7.418

-0.07%

16.90%
(per bushel)

 








Cotton 

$0.7007

$0.709

-0.82%

-23.57%
(per pound)

 








Coffee

$1.5465

$1.572

-10.86%

-32.66%
(per pound)

 








Crude oil (-CL)

$86.24

$85.680

-6.45%

-12.74%
(per barrel)










 


360Comments
Oct 31, 2012 6:16PM
avatar
I'm perplexed!  Why is everybody worried about the economy and the financial markets?  Your worry can be alleviated, you can have peace of mind, and you can have ALL THE ANSWERS to your financial woes by simply "clicking" on one of over 330 of Ken Fisher's (Fisher Investments) advertisements "AS SEEN ON TV"..., I mean as seen on MSN Money:  
"Is Another Bear Market Around the Corner?" 
"Should You Be Buying Stocks Right Now?"
"EXCLUSIVE REPORT:  Stock Market Outlook"
"Where Is The Stock Market Headed?"
And the list goes on and on, everything from Annuities to Zulu Tribes (just kidding about Zulu Tribes), but you get the point.  Yes, according to Steve Forbes, CEO and Editor-in-Chief of Forbes Magazine Ken Fisher is best thing since sliced bread..., I mean the best "Investment Guru" since Benjamin Graham, maybe even better than ole Benjamin!  There seems to be just one small problem, however, since 2008, Ken Fisher's investment performance (% annualized returns) both for individual investors ("Private Client Group") and the PURISIMA Total Return mutual fund (PURIX) is about -- 4.50%, YES, that's a MINUS 4.50%!  Oh, by the way, Fisher has been writing an investment column for Forbes Magazine for over 30 years, so I'm sure that Steve Forbes wouldn't be biased, you think?

Friends, take some good advice from a guy whom recently graduated from the "Fisher Investments School of Hard Knocks"; a former client of Fisher Investments "Private Client Group" (sounds impressive, doesn't it?").  Don't waste your time or energy "clicking" on any of Fisher Investments ads or reading any of his investment propaganda; it's just a pile of sh.., of garbage and a well designed ploy to separate you from your money.  In less than 41/2 years with Fisher Investments, THEY (my portfolio) lost over $90,000 and I paid over $30,000 in "investment advisory fees"  (yes, "they", because "they" picked and bought all the assets in my portfolio with my money)! 
Don Moore


Oct 31, 2012 6:14PM
avatar

Less than a week before the presidential election, Christie will host Obama in New Jersey to survey Sandy damage. The governor created a buzz after saying this week that he had no intention of bringing the GOP nominee to the Garden State to survey storm damage first-hand.Folks don’t know the situation here following the storm,” a Christie adviser told POLITICO when asked if the governor is unhappy with the GOP nominee

Christie has been a frequent campaigner and fundraiser for Romney, appearing with him most recently in Ohio. Christie cancelled campaign appearances for Romney in Nevada that had been slated to occur on Tuesday after it was clear the storm was headed to his state.

The governor told Fox News that he has bigger things to worry about than the campaign.

“I have no idea, nor am I the least bit concerned or interested,” he said when asked if Romney would visit. “I’ve got a job to do here in New Jersey that’s much bigger than presidential politics, and I could care less about any of that stuff.”

Oct 31, 2012 6:00PM
avatar

Joined by New Jersey Gov. Chris Christie, Obama inspected the devastation from superstorm Sandy, flying high over flooded neighborhoods and sand-strewn streets.

At a community center where people have taken shelter, Obama said one of his top priorities is getting power back on.

Christie said it was "really important" to have the president of the United States in New Jersey.

Oct 31, 2012 5:53PM
avatar
And as long as it continues to look like Obama has a chance to get re-elected the market will continue to decline, the unemployment rate will go unchanged, the government will continue to grow, the money will continue to be wasted and the poor wretched country will continue to slide into the toilet.
Oct 31, 2012 5:45PM
avatar

Sorry to hear that Lady,

I lived in NYC myself.  Perhaps the Christie Obama alliance can serve as a blueprint or a spark to get congress to work with the President on issue of great importance, like the Fiscal Cliff for instance.
Oct 31, 2012 5:42PM
avatar
Freaking Libtards!

The Patriot Act was a REPUB idea.  Gives the President a lot of power, so this is left over spoils from BUSH.

If I were Obama I would wait until re-elected to get rid of it, but for now I can see why his enemies(like you) would want him not to have such powers yet they would like to have it if they were in power themseoves
Oct 31, 2012 5:41PM
avatar
box007 ~ you need to retake your meds again.  Your paranoia is exposing itself again, idiot!
Oct 31, 2012 5:37PM
avatar
Ol' Leroy HAS to show he is handling the East coast disaster. He has shown a total failure in Libya, so it is critical to not fail again.
Oct 31, 2012 5:36PM
Oct 31, 2012 5:34PM
avatar
Oh dear, all the shouting woke up Jeffy from his nap. 
That does it...I am off to work on my balance sheets
and fluff up my pillows too. 

Here, let me take the leash off of Jeff so he can
better express his core beliefs....Har har ...

GOOD MORNING JEFF!!!

Oct 31, 2012 5:33PM
avatar
I agree Oldchum I think it would be the right thing to do, they both have millions to spend.
Oct 31, 2012 5:31PM
avatar

Worst month since May 2012?  Is that what this says?  How about October 2008?  Market down 4000 and closed 10/31/2012 at 9375!  October 30/2009 at 9712!  October 2010 at 11,113! October 31,2011 at 11,955!  And this year at 13,096? 

 

The market is up 40% under Obama.  And you schmucks are crying about 4% since May? 

 

It is absolutely amazing how incredibly short sighted and foolish conservatives really are.  Its no wonder our economy tanked in every Republican administration since Hoover.

Oct 31, 2012 5:29PM
avatar
Freakin Libtards....They scream that the Patriot Act is a violation of our rights (and it is) but when their lord votes to extend it while in Congress and then ADDS to it while President, they don't utter a word about it. 
Oct 31, 2012 5:29PM
avatar
I think both candidates should make a sizable contribution to the Red Cross. I did yesterday.
Oct 31, 2012 5:27PM
avatar
So what's you think we should do Oldchum?
Oct 31, 2012 5:27PM
avatar
Netflix () shares jumped $9.66 to $79.24?  $79.24???? This is like 185%. Math, Math and Math are important.
Oct 31, 2012 5:26PM
avatar
The FEMA money won't flow till after the election and those effected will be getting pretty grumpy soon.
Oct 31, 2012 5:22PM
avatar
This is what I Think,

Kudos for a very well written presentation.
Oct 31, 2012 5:22PM
avatar

......The brilliance of Christie is that he has made himself to look like the reasonable Republican who can work with the other side, setting himself up for 2016 and distancing himself from a LOSER,  Mitt Romney..=================================================================

 

Spot On and a good chance he gets my vote.

Oct 31, 2012 5:21PM
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