Stocks waver on mixed earnings and economic data

Hewlett-Packard jumps 5.5% after its second-quarter beat. NetApp forecasts fall below the current consensus view. Chinese manufacturing activity falls. Eurozone private-sector output shrinks.

By TheStreet Staff May 24, 2012 7:34AM

TheStreetImage: Wall Street sign (© Corbis/SuperStock)By Andrea Tse

Updated at 12:19 p.m. ET

Wall Street was wavering midday Thursday as the market digested mixed corporate earnings and global economic reports.

The Dow Jones Industrial Average ($INDU) was down by 29.5 points, or 0.2%, at 12,467. The S&P 500 ($INX) was down by 3.8 points, or 0.3%, at 1,315. The index has gained nearly about 1.5% so far this week though it's still down about 8% from a four-year high reached in April. The Nasdaq ($COMPX) was falling by 18.5 points, or 0.7%, to 2,832.

Among the 30 Dow stocks, 16 were falling, led by Alcoa (AA), United Technologies (UTX) and Bank of America (BAC).

Hewlett-Packard (HPQ) was the biggest standout on the blue-chip index, jumping 5.5%, after the PC and printer giant reported second-quarter profit excluding items of 98 cents a share, beating expectations, and announced plans to lay off 27,000 people.

In other tech news, shares of NetApp (NTAP), were plunging 13.3% after the storage and data management technology company forecast non-GAAP earnings of 34 cents to 39 cents a share in its fiscal first quarter, well below the current consensus view for a profit of 59 cents a share.

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U.S. stocks staged a mighty comeback in the final hour of trading Wednesday as a message from European leaders in support of Greece assuaged investor fears that the country is on a path to exit the eurozone.

Joe Bell, senior equity analyst at Schaeffer's Investment Research, sees a bumpy ride ahead for stocks in the intermediate term.

"We're going to continue to see some volatility on uncertainty until we can get a little more clarity out of Europe," said Bell. For now, he thinks that U.S. economic indicators have taken a backseat to "much larger things" such as Europe and global slowdown concerns.

On Thursday, the Labor Department reported that initial jobless claims for the week ended May 19 came in at 370,000, in line with the expectations of economists surveyed by Thomson Reuters. The prior week's figure was upwardly revised to 372,000. The four-week moving average was 370,000, a decrease of 5,500. Continuing claims for the week ended May 12 was 3.26 million, down by 29,000.

The Department of Commerce reported that durable goods orders rose 0.2% in April, less than the 0.5% increase expected by economists. March's drop was revised to a 3.7% decline from a 3.9% fall.

"I think that the U.S. economy is going to continue to grow, I think we're going to avoid recession," said Alan Gayle, senior strategist at RidgeWorth Investments. Gayle has been bullish for most of the year, but is now worried that corporate profits will be pressured going into the second half of the year.

He says that next Friday's jobs report will help the markets determine the overall economic direction. The general view is that the weather helped the jobs situation in the first two months of 2012 and hurt it in the second two months; therefore, it's likely that "we're going to get a 'clean' number in the May jobs report."

London's FTSE closed up 1.6%, and the DAX in Germany finished up 0.5%, even after a Markit's flash purchasing managers' index showed that private-sector output across the eurozone shrank in May at its most rapid pace since mid-2009.

During Wednesday's summit of European Union leaders, there was a lot of emphasis placed on the wish to see Greece stay in the eurozone, but the leaders remained steadfast on the necessity of the country abiding by the terms of the existing bailout agreement. Meanwhile, German Chancellor Angela Merkel and other countries with pristine credit ratings continued to reject proposals for jointly issued eurobonds.

The Hang Seng index in Hong Kong settled down 0.6% and Japan's Nikkei average closed flat as the HSBC flash Purchasing Managers Index for China fell to 48.7 in May from 49.3 in April.

The benchmark 10-year Treasury was falling 10/32, raising the yield to 1.771% and the greenback was down 0.08%, according to the dollar index, all signs of some easing in risk aversion.

Commodities were gaining, with the July crude oil contract up $1.32 at $91.22 a barrel and June gold futures rising $20.30 to $1,568.70 an ounce.

In corporate news, Costco Wholesale (COST), the warehouse retailer, reported fiscal-third-quarter earnings Thursday of $386 million, or 88 cents a share, up from year-earlier profit of $324 million, or 73 cents. Including higher membership fees, total revenue rose 8% to $22.32 billion. Analysts were calling for earnings of 87 cents a share on revenue of $22.21 billion.


Jewelry company Tiffany (TIF) lowered its 2012 earnings guidance to be between $3.70 a share and $3.80 a share from previous estimates of between $3.95 a share and $4.05 a share.

H.J. Heinz (HNZ), the ketchup maker, said that the company's fourth-quarter net earnings fell to $175.3 million, or 54 cents a share from $223.9 million, or 69 cents a share the prior year.


Facebook (FB) shares were extending the previous session's rebound after two-straight days of steep declines. The stock price still remains well below its $38 initial public offering price as the company's IPO becomes the focus of two congressional inquiries and a growing number of lawsuits amid accusations that important information about Facebook's growth prospects were withheld before the debut.

May 24, 2012 1:07PM
Bush is accountable for what he did.
Especially the second term. He acted like a crazed lefty on steroids,  in regard to the deficit. 

ABS - can we agree that he was - at the very least (or most) - a poor President? At least to start a sane segue into our present and dire circumstances? Have we lost our minds altogether?
May 24, 2012 1:07PM
 Thats right Mr franks, who the hell needs regulations standing in the way of some dude trying to make a quick buck Let the buyer beware and if MS screwed you over Facebook , tough luck sucker. NEXT time read the fine print  BEFORE you whine to you lawyer about being screwed. 
 Like Trump said, all hail MS! THEY know how to make money!
May 24, 2012 1:05PM
"Are you acknowledging your one true god? "

No just explaining your misguided infatuation with yours.
May 24, 2012 12:58PM

"Also if you believe one side deserves more credit, well credit may  not be the right word,

then please reply with which side you believe should be the held accountable and most

importantly why"

You finished with the most irrelevant ( alright - senseless) question. Does it matter? To Who(m) does it matter? After you answer those questions you might progress to thinking about the actual reality of where we are - and how we might go from here.

May 24, 2012 12:56PM

Too funny Classic !

I've said on occasion that the actors (and actress') should be politicians and the politicians should be actors.

Ronald Reagan: Actor > President

Arnold Swartznigger: Actor > California Governor > Actor again

Sonny Bono: Actor/ singer > city commissioner ( I think )

Clint Eastwood: Actor > Mayor > Actor / Producer


These guys have a better record than their peers in politics over all.



May 24, 2012 12:51PM

While in Spain, I saw the steel structure of many building that construction began a couple of years ago and still not completed.  As a matter of fact, no construction had been going on at the site for a long time.


This, to me, is a sign of the future.  We, US Manufacturing, can make all the widgets we want but if no one has money to buy them....factories are closed and people are out of work.

May 24, 2012 12:51PM



said:  Yes, Bush, Bush, Bush
it's ALL his fault. Even though he's out of the office 3.5 years - STILL his fault!


No, its 2 Bushs, a Reagan, a Clinton, and an Obama that are at fault.  Plus

535 "elected"(bought might be a better word) people that are supposed to be

representing our best interests rather than theirs.


Every time I hear one of them say they are doing the American peoples business

it makes me cringe.  They are doing somebodys business, but it isn't the

American peoples.


a 10-15% approval rating should say all that needs to be said.  And that rating is

for both conservativesand liberals.

May 24, 2012 12:51PM
"Go fly a Kite with a bigot painted on it's face.  Stupid birther. "

Awe, what's wrong? You don't like it when the shoe's on the other foot? 
May 24, 2012 12:45PM



said:  It is time WE THE PEOPLE take our government back.


I agree.  The only problem is I didn't see our names of the ballet in the last election,

or any election for that matter.


If you voted in the last election do you now think it would have made any difference if

you had voted for the other guy and he had won?


It is the choices we have and not who wins that is killing our democracy in this


May 24, 2012 12:41PM
  There was an American Foreigner
  Who was sold as a Fiscal Performer

'Cause we gave him a shot
  and perform, he did not
  He'll be holding a cup on the corner...........
May 24, 2012 12:38PM
ABS:  Tumbleweed was referring to Mitt's godawful attempts to show that he's an everyman.  he's not, and he needs to accept that.  When he tries to be, it just comes out how uncomfortable with the idea and how far from being an everyman he actually.  He should really stop trying and just be the corporate guy that he is.  The truth is that being that would probably make him more relatable.  But now he's the guy in college who'd parents send him massive checks every week wondering why people are drinking Naty Ice and eating ramen when they could be enjoying a barleywine from the local craft brewery.  Then when going to a party started asking people what those bricks of hardened noodles where.

Remember trying to show that he likes Nascar too?  "I don't watch the races, but I'm friends with some of the owners."

How about to show how much he has in common with the unemployed "I'm unemployed too!" with my multi-million dollar passive income.

Feeling the economy with the rest of us "I didn't make that much money that was income."  Only over 300K.

Or, one of my favorites.. trying to show unity with the black community back in 2008.  "i see you have some uh.. uh.. bling bling there."  Followed by a rousing, and very uncomfortable rendition of "Who Let the Dogs Out"  I'd like to see him do that again.. "I would very much like to know the identity of this dogkeeper who let the dogs out.  Perhaps I can fire him..."

Mitt's a corporate centrist.  I know he's pragmatic, but I also know that he needs to bend his positions to the far right.  Were it not for those whackos I'd have full faith in him doing a great job.  I just want to hear him say 2 things "The extreme right, meaning the "Moral Majority" and the "Tea Party" will not run my presidency." and "I want to end the carried interest tax benefit."

May 24, 2012 12:35PM

The US economy slum deepens due to MSN and Obama caught lying about the unemployment rates being 8.1..the real unemployment rates are 22 percent..Ben Bernanke of the Federal Reserve Banking Cartel needs to start printing Dollars again.

May 24, 2012 12:33PM



said:  A total disgrace and a failure


Are you talking about Bush II or Obama. 


I'd say it must be Bush because in the last 18 months of his presidency, and yes the fresults of the first few months of Obama's can be attributed to Bush, 7.5 million jobs were

lost and we slipped into what would have been a depression were it not for all the

social programs we have today, including unemployment benefits, and some of the

work of Obama.


And don't even try and say it was the democratic congresses fault.

May 24, 2012 12:29PM

 Facebook  initially gets lawyers and bankers excited. Facebook euphoria turns to lawyer euphoria in 3 days. We then need more regulations to keep the lawyers employed. Then we need more regulators to keep the regulations enforced. Then we need more taxes to keep the  regulators paid. The we have companies like HPannounce layoffs for 27,000 people to keep bankers happy.


Then we need more unemployment spending for the unemployed which means we need more taxes to pay for it.

This is called Californication.

May 24, 2012 12:26PM

Let me ask a simple question.  And please consider all of the facts before answering.


Should the guilt for our current economic situation be shared equally between the

conservatives and liberals. 


Thumbs up for yes and thumbs down for no.


 I know the thumbs aren't there anymore but just pretend

like they are. 


Also if you believe one side deserves more credit, well credit may  not be the right word,

then please reply with which side you believe should be the held accountable and most

importantly why.

May 24, 2012 12:25PM

The two major indicators to review when evaluating where the economy is and where it is headed is  the M2 Velocity Rate and the Labor Force Participation Rate.  There is no fudge or fake in these numbers and they detail the true employment rates and how frequently the dollar is being spent.


The Labor Participation rate is at 63.6%.  That is the lowest it has been since 1980.  The M2 Velocity is 1.582.  That is the lowest it has ever been.  There is no recovery, just a very concentrated effort to make you think that we are on a path to recovery.


These numbers should concern every US citizen and what I take from it is that we are circling the drain,  maybe the entire financial structure is limping into the final stages and in this global climate I see no where to hide, only difficult work ahead.

May 24, 2012 12:07PM
This is all about morale - or "animal spirits". We humans love our delusions - but we at least need some semblance  of reality added to the mix. Is this too much to ask? 

No huge crash.....Slow Recovery Continues........ 

 So...asked and answered? Except USA one - you have made this identical post for literally years now, along with other comparably and provably false statements. I was asking for at least some semblance of truth. Is this too much to ask?
May 24, 2012 12:06PM

Three decades and 5 Presidential administrations.



Some factoids.


     More jobs were created during the Clinton administration(22,744,000)

than during the Reagan, Bush I, and Bush II administrations combined (19,744,000).


In the 3 republican administrations(20 years), starting with Reagan, during these 3 decades $ 8.3 trillion dollars  was added to the national debt. During the 2 democratic administations(11 years) $ 5.9 trillion was added.  When put in perspective of the number of years and the amount of debt created along with the near depression economy that Obama was left

with by the Bush II administration, this could be considered a wash.


In the 18 months, the last 13 of the Bush II administration and the first 5 of the the Obama administration, 7.5 million jobs were lost.  IMO, this job loss must be shouldered by the Bush II administration.  Well actually it is probably a shared burden of the excesses and mismanagement of the past 4 administrations and the financial institutions in the private

sector.  Obama attempted to put the brakes on and did slow the decent, but the grade is so steep that it appears the brakes are beginning to wear out.

We have bailed and stimulated about all we can, and don’t forget that the first bailout and stimulus packages were instituted by the sainted Bush II administration.  So maybe Obama just took the lead from Bush.


It is time to find a more certain source of revenue by instituting a complete new and different system of taxation that will increase our cash flow and to cut spending in every place we possibly can.  And yes conservatives tax revenue must be increased and yes liberals significant cuts must be ade in some of your most sacred programs .


And then dive into the regulation nightmare that has overcome our economic and social systems.


We elected you, both conservatives and liberals, and sent you to Washington to guide our nation through this tumultuous time in our history.  Now begin to act like  Americans instead of politicans and get politics out of the road and find the answers to our current  economic delima.  And yes many of you have been up there long enough to have been a major contributor

to the problem so you should in turn be able to contribute to the solution.


The first thing you need to do is to quit blaming each other for the problem.  By the looks of the data presented above both sides can be implicated equally in the problems we face today.









May 24, 2012 12:06PM

clownfeet said


If someone was to organize and put together a plan to change the way things are done in this economy, like the Tea Party, and the OWS crowd,


This event could give UFC a run for TV ratings........ maybe they could raise some money. 

May 24, 2012 12:00PM
No huge crash.....Slow Recovery Continues........
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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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