Stocks enjoy a strong October

The major averages end the day basically flat but sport decent gains for the month. Earnings misses from Chevron and Merck offset gains for Alcoa and Microsoft. GDP grows at an annualized 2%.

By Charley Blaine Oct 29, 2010 2:12PM

Charley BlaineUpdated: 6:25 p.m. ET

Stocks finished little changed today, but the major indexes enjoyed their best October performances since at least 2006.


The flat performance came despite the apparent shipment of explosive packages on planes flying to the United States. And the finish represented some good news after a government report showed overall economic growth to be lackluster at best.

Meanwhile, earnings reports were mixed. Dow components Chevron (CVX) and Merck (MRK) disappointed investors. (Check here and here.) Monster Worldwide (MWW), the online employment site operator, and cosmetics maker Estee Lauder (EL) delighted the Street.

The Dow Jones industrials ($INDU) closed up 5 points to 11,118. The Standard & Poor's 500 Index ($INX) was off 1 point to 1,183. The Nasdaq Composite Index ($COMPX)  was flat at 2,507.

Among stocks making moves:
  • Monster Worldwide, up 25.5% to $18.06, tops among S&P 500 stocks. The online-recruiting company forecast adjusted fourth-quarter earnings of as much as 8 cents a share. Analysts had been looking for 5 cents a share.
  • Estee Lauder, up 10.5% to $71.17. The gain was the second-largest among S&P 500 stocks. The maker of Mac cosmetics and Clinique skin care earned 97 cents a share in the fiscal first quarter, topping the consensus estimate of 77 cents.
  • Microsoft (MSFT), up 1.5% to $26.67. The software giant (and publisher of MSN Money) reported a 51% profit increase in its fiscal first quarter and easily beat Street estimates.
  • Deckers Outdoor (DECK), up 7.6% to $58.10. The maker of Ugg boots and Teva sandals projected 2010 earnings will be up 22% from a year ago, up from prior guidance of 16%.
  • Newpark Resources (NR), off 28.7% to $5.88, the biggest decline for stocks in the Russell 2000 Index ($RUT.X). The drilling-services company posted third-quarter earnings of 8 cents a share -- 28% below the Street estimate.
  • Genworth Financial (GNW), down 9.9% to $11.33, worst among S&P 500 stocks. The mortgage guarantor and life insurer earned 6 cents a share in the third quarter, after one-time charges. Analysts had expected 26 cents.

To be sure, today's performance represents a wait-and-see attitude toward Tuesday's midterm elections and the Federal Reserve's decision on Wednesday on whether to offer a new plan to boost the economy.

But gold and silver prices were higher as the dollar moved lower against major currencies. Gold settled at $1,357.60 an ounce, up $15.10. Silver was up 69 cents to $24.56 an ounce. For the week, gold was up 2.45%; silver rose 6.25%.

Copper, meanwhile, was off 5.4 cents to $3.73 a pound and was down 1.7% on the week.

Crude oil settled down 75 cents to $81.43 a barrel. Traders have been worried about a glut of oil worldwide.

Interest rates were lower, with the 10-year Treasury yield at 2.612%, down from 2.661% on Thursday.

 

A surprisingly good October
The major averages ended the week basically flat. But, in a month that IBM (IBM) end at an all-time closing high and McDonald's (MCD) reach an all-time intraday high, the Dow ended October up 3.1%,.


The S&P 500 added 3.7% and the Nasdaq rose 5.9%. It was the best October performance for the Dow since 2006 and since 2003 for the S&P 500 and the Nasdaq.

The Nasdaq's 18.6% gain in September and October was its best performance for the two months since 1982, when the great 1980s bull market erupted. The September-October performances for the Dow and S&P 500 -- 11% and 12.8%, respectively -- were their best since 1998.


Markets for the week



10/29/2010

10/22/2010

% chg.

YTD chg.
Dow industrials

11,118.49

11,132.56

-0.1%

6.6%
S&P 500

1,183.26

1,183.08

0.0%

6.1%
Nasdaq 

2,507.41

2,479.39

1.1%

10.5%
Russell 2000

703.74

703.43

0.0%

12.5%
Crude oil 

$81.43

$81.69

-0.3%

2.6%
(per barrel)











U.S. Dollar Index 

77.457

77.69

-0.3%

-1.0%
10-yr. Treasury

2.61%

2.56%

1.9%

-32.0%
Gold

$1,357.60

$1,325.10

2.5%

23.8%
(per troy ounce)












Why the Fed may move
In addition to Tuesday's elections, the Fed is expected to announce plans to buy hundreds of billions of dollars in Treasurys to reduce interest rates. Investors have been questioning whether the reported purchases will be enough to jolt the economy.

The Commerce Department estimated that gross domestic product increased 2% in the third quarter, matching economists' forecasts. The gain was slightly more than the second quarter's 1.7% growth. Personal spending, the largest driver of economic growth, rose 2.6% as demand for services grew.

"Given the magnitude of the recession, the initial boost in growth was underwhelming," Jim Baird of Plante Moran Financial Advisors told The Street.com. The slow growth "suggests that job creation and income growth are also likely to remain tepid."

The Institute for Supply Management-Chicago said its business barometer rose to 60.6 this month from 60.4 in September. Figures greater than 50 signal expansion.

But the Thomson Reuters/University of Michigan final index of consumer sentiment fell to 67.7 from 68.2 last month.

Household purchases, about 70% of the economy, rose at a 2.6% pace, the best quarter of the recovery that began in June 2009.

The gain in consumer spending was the biggest since the end of 2006 and compared with a 2.5% median forecast from Bloomberg News.

Stock market gains and reduced debt may be allowing consumers to increase spending, which bodes well for the holiday season. The National Retail Federation has forecast November-December sales will rise 2.3% from a year ago, making it the best holiday season in four years.

Ruth's Hospitality Group (RUTH), operator of the Ruth's Chris Steakhouse chain, said holiday party bookings so far are up 17% from a year ago. (Shares rose 2.7% to $4.56.)

Energy prices -- New York close
 

Fri.

Thur.

Month chg.

YTD chg.
Crude oil 

$81.43

$82.18

1.83%

2.61%
(per barrel)











Heating oil

$2.2201

$2.2435

-9.01%

4.94%
(per gallon)











Natural gas 

$4.0380

$3.8900

4.29%

-27.53%
(per mil. BTU)











Unleaded gasoline

$2.1045

$2.1139

2.92%

2.51%
(per gallon)











Retail gasoline

$2.8090

$2.8080

4.46%

6.44%
(per gallon; AAA)












Coinstar shares soar on earnings; Netflix targeted
Among the more fun performers today was Coinstar (CSTR), up 24.5% to $57.58. The owner of the Redbox movie-rental kiosks earned 60 cents a share in the third quarter, beating the Street estimate of 50 cents a share, as DVD revenue surged.

The company forecast 2011 earnings of $3 to $3.50 a share; the Street has been looking for $2.93. The company plans to start a streaming video service to compete against NetFlix (NFLX). Netflix was down 1.2% to $173.57.

Short hits from the markets -- New York close
 
  Fri.

Thur.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.110%

0.120%

-26.67%

120.00%
5-year Treasury note 

1.179%

1.237%

-8.89%

-56.11%
10-year Treasury note

2.612%

2.661%

3.49%

-32.03%
30-year Treasury bond

4.000%

4.054%

8.20%

-13.81%
Currencies







 

 
U.S. Dollar Index

77.457

77.503

-1.88%

-0.98%
British pound

$1.6033

$1.5946

1.99%

-0.88%
(in U.S. $)











U.S. $ in pounds

£0.6237

£0.6271

-1.95%

0.89%
Euro in dollars

$1.3902

$1.3933

1.78%

-3.00%
(in U.S. $)











U.S. $ in euros

€ 0.7193

€ 0.7177

-1.75%

3.10%
U.S. $ in yen 

80.65

81.00

-3.63%

-13.28%
U.S. $ in Chinese

6.69

6.68

-0.35%

-1.93%
yuan











Canada dollar

$0.981

$0.980

0.93%

3.15%
(in U.S. $)











U.S. dollar 

$1.020

$1.020

-0.92%

-3.05%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,357.60

$1,342.50

3.67%

23.85%
(per troy ounce)











Copper

$3.7335

$3.7875

2.25%

11.56%
(per pound)











Silver

$24.5640

$23.8750

12.57%

45.82%
(per troy ounce)











Wheat 

$7.1725

$7.1825

6.42%

32.46%
(per bushel)











Corn

$5.8200

$5.7900

17.40%

40.41%
(per bushel)











Crude oil 

$81.43

$82.18

1.83%

2.61%
(per barrel)










 

17Comments
Oct 29, 2010 4:06PM
avatar
uvuvuv - that is if ALL the tax cuts expire.  They are trying to keep the middle class cuts that you just mentioned.  I hope they do not let the under $100K cuts expire.
Oct 29, 2010 5:33PM
avatar

The Bush tax cuts will be kept including the ones for the wealthy (I predict two years).  So I have to pay an extra 5-5K given my income when that happens.  Won't kill me.  Problem is Obama will give it to some lazy welfare cheat so they can lay back and enjoy life on the taxpayers' dime.

That's the good old USA.  Rewards for doing nothing.

Oct 29, 2010 5:33PM
avatar

Dear Lost,

Let me see if I understand what you're suggesting. Either you, or the government, should determine how much wealth a person should possess? You also seem to have a problem with people that have been successful. I am not wealthy by any stretch of the imagination nor do I come from a wealthy family. I do, however, understand and agree with the concepts of risk & reward and being successful is a good thing. If it weren't for the wealthy there would be fewer jobs than we currently have and I'm certain quite a few charities, grants, and scholarship programs wouldn't exist. Why is it that the United States (a relatively young county compared to many other countries around the world) has been able to become an economic leader? Could the answer be Capitalism? How is it that the United States has lead the world in most technological advances? Could the answer be Capitalism? Why do so many want to come to the United States? Could it be Capitalism once again? And who has benefited from what we've created? Let's try everyone - including you. If it weren't for our advancements in medicine & technology most people's lives would be much shorter and unpleasant. The reason why much of this happened in the United States is due Capitalism. Those concepts of risk & reward and that being successful is a good thing. If you, the government, or people like you dictate how successful a person is permitted to be, I think you'll find we'll begin to resemble the places that immigrants are coming from.

 

Oct 29, 2010 5:20PM
avatar
We are still getting loads of peppers on our farm. The farmer's markets are closed for the year. So we freeze what we need for the year and the rest go to the food bank. Yes LostOnEarth we feed the hungry. We can do that because we are productive and profitable. How many needy people did you feed today? 
Oct 29, 2010 3:43PM
avatar
Thanks uvuvuv, That info just makes me feel all warm and fuzzy. Just gotta love them Democrats....
Nov 1, 2010 10:10AM
avatar

This is what's wrong with the core of the us economy. I just read "markets jump on a growth in China".

Keep on growing China!! Build and manufacture all of our stuff! While all of are unemployed Americans sit watch unemployment stayat 9-10% for a long time in the US. Heck we should have them build our houses to and ship them over to.

Oct 30, 2010 6:37PM
avatar
somewhere ova the rainbow, way up high..........I don't know
Oct 29, 2010 10:03PM
avatar

To lostonearth - Great name - you really are lost.  Get a clue.  Why should someone who has more money (for whatever reason) be forced to pay a higher percentage of their income?   So someone who does nothing can benefit?  Having a graduated income tax is just as bad as having to pay more in property tax because you're perceived house value is higher than your neighbors.  Lostonearth and others with similar views must be progressives.  They are enlightened and know more than us.  It's also obvious that they voted for Obama and agree with forcing  socialized healthcare down our throats.  I have a great idea.  Why don't all of you go to Mexico or Canada or some other foreign country and try to set up your own socialist country.  This country was founded on the principles of individual responsibility and is a Republic - remember the Pledge of Allegiance? 

Oct 29, 2010 8:00PM
avatar

FrEddddd,

Next time buy 96 feet. You get your boat top and your special favors. No problem, fortunately aluminum is still fairly inexpensive. Austinetic stainless, copper, and brass (stuff that we use at my "day job") are all way up from their lows.

Oct 29, 2010 7:45PM
avatar
The reason rich people are rich is because they provide a service that people trade money for. The less services that you provide for your human bothers and sisters the less money you have. Hence survival is not mandatory. Of course some people make money the old fashioned way, they steal it. But there is a  lot more Grace than there is Evil....I hope so anyway?
Oct 29, 2010 6:07PM
avatar
I thought I had something more to say.
Oct 29, 2010 5:13PM
avatar

FrEddddd,

 

1/4 inch wall. Is she trying to protect them from a hurricane?

Oct 29, 2010 5:02PM
avatar
fair tax prebates would increase the $10,000 guy to $22500
Oct 29, 2010 4:58PM
avatar
If you're not in the metals, you are nowhere !Open-mouthed
Oct 29, 2010 4:56PM
avatar

LostOnEarth,

That's why we need to go to the fair tax. It's all in the prebates.

Oct 29, 2010 4:56PM
avatar

"CONTINUES" hot streak, huh !  Up 4 points ?Baring teeth

Oct 29, 2010 4:13PM
avatar

So you economically 101 challenged want the person making $10,000 a year and the person making 1 million a year to both pay their share,... like 10% perhaps? With that percentage, that would leave the person making $10,000 a year left with $9,000 to struggle and make ends meet for the whole year and forget about owning a home, a business, a car, any type of insurance, any health care, any dental plan, any college tuition, any stocks, or any minor repairs for anything for that matter,..... while the other poor soul that makes 1 million pays their 10% on their 1 million yearly income, leaving them with only $900,000 a year to survive on. How will they ever be able to pay their bills? Boo Hoo! Crying 

 

What's wrong with this picture? Something the greedy rich imbeciles will never understand. Angry Stupidity at it's finest! A no brainer on why the rich get richer and the poor get nothing but crumbs, frustration and increased anger with each passing day. Eye-rolling When the Revolution breaks out, the rich cowards will run and retreat to their private islands and fortresses. Once there's nothing left to steal from the poor U.S. folks, the rich will just move to Africa and start raping, abusing and destroying that continent. Oh wait, they already are in some countries. Devil Enjoy your billions and trillions in heaven you perverted and insane scum of the Earth! Sick

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