Dow ends 3-day skid on Caterpillar, Boeing gains

The blue chips gain 59 points in a volatile day. Because of Apple's earnings miss, the S&P 500 and Nasdaq end lower for a 4th day. Because of Facebook issues, Zynga shares fall more than 35%. Whole Foods earnings cheer. New-home sales disappoint.

By Charley Blaine Jul 25, 2012 12:18PM
Charley BlaineUpdated: 9:45 p.m. ET

Boeing (BA) cheered investors today. So did Caterpillar (CAT) and Broadcom (BRCM). Apple (AAPL), Netflix (NFLX) and Wellpoint (WLP) did not.

The result was the Dow Jones Industrial Average ($INDU) finished higher today after three straight losses of more than 100 points, thanks in large part to decent earnings and guidance from Boeing and Caterpillar.

The Standard & Poor's 500 Index ($INX) ended flat, and the Nasdaq Composite Index ($COMPX) was off modestly. That's because of Apple, whose shares were off $25.95 to $574.97 as its fiscal-third-quarter results missed analyst estimates.

After the close, game-developer Zynga (ZNGA) and Facebook (FB) shares were down about 35% to $3.30 and 7.3% to $27.19, respectively, after Zynga reported a loss and cut its guidance, citing a more challenging environment on Facebook. Translation: Facebook users increasingly are playing games on Facebook with mobile devices, which are not generating big revenue or profit. After Thursday's close, Facebook reports second-quarter earnings, its first results since going public in May.

The Dow was up 59 points to 12,676, with more than half the gain coming from Boeing, IBM (IBM) and Caterpillar. The S&P 500 was off less than 1 point to 1,338. The Nasdaq fell 9 points to 2,854. The Nasdaq-100 Index ($NDX), heavily influenced by Apple, was off 18 points to 2,549.

Article continues below.
Zynga's big problem
Zynga's loss was $22.8 million or 3 cents a share using generally accepted accounting, 1 cent a share on an adjusted basis. Revenue was up 19.1% to $332.5 million -- but less than the Street estimate of $343.1 million. Bookings, the short-term measure of when the company sells a virtual good or other item, were down 8%. 


Zynga has faced growing fatigue among its users, many who play fewer social games than before or have shifted to mobile apps. The company’s best-known franchises, "FarmVille," "CityVille," and "CastleVille," all lost at least 20% of users between the first and second quarters of this year, Bloomberg News said.


Facebook is expected to report earn 12 cents a share on revenue of $1.15 billion when it reports Thursday.


While Facebook and Zynga's problems were causing a lot of chatter, Whole Foods Market (WFM) shares jumped nearly 11% to $93.73 from a regular close of $84.53 after reporting a 26% increase in earnings and a 13.7% sales gain. The company also boosted guidance for the year.


Also moving higher on better-than-expected results: plastic-shoe maker Crocs (CROX).


Despite Dow's gain, S&P 500, Nasdaq fall for 4th day

The Dow had a roller-coaster of a day. It was up as many as 109 points right after the open, then gave up just about all of the gain. It rebounded to a gain of 115 points by 2:50 p.m. ET and gave up nearly half of that gain by the close.


While the Dow had its first gain after three straight losses, the S&P 500 and Nasdaq suffered their fourth losses in a row.

The one economic report today was a disappointment. New-home sales fell 8% in June from May, the Commerce Department said. But even that report was mixed. The original report for May sales was revised upward to 382,000, the highest level since April 2010.

Homebuilding stocks moved lower.


A big day for earnings: Exxon, Amazon.com, Facebook, Starbucks

Exxon Mobil (XOM), Amazon.com (AMZN), Starbucks (SBUX), Colgate-Palmolive (CL) and Facebook are among the day's big earnings reports scheduled for Thursday,.


The government will report on weekly jobless claims and durable goods orders. The National Association of Realtors will report on pending home sales. 


Futures trading suggests a flat open for U.S. stocks.


Crude oil and gold finish higher

Crude oil (-CL) was off for much of the day after an Energy Department report showed larger domestic oil inventories than expected. But the market rallied, and crude settled at $88.97 a barrel, up 47 cents. Gold (-GC) had gained $31.90 to $1,608.10 an ounce, its first close above $1,600 since July 5.

Helping commodities: a lower dollar against the euro. The 10-year Treasury yield rose very slightly to 1.406% from Tuesday's 1.404%.

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$88.97

$88.50

4.72%

-9.98%
(per barrel)











Heating oil (-HO)

$2.8467

$2.8263

5.05%

-2.32%
(per gallon)











Natural gas (-NG)

$3.0700

$3.1870

8.71%

2.71%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7162

$2.7258

3.21%

2.21%
(per gallon)











Brent crude 

$104.38

$103.42

6.73%

-2.79%
(per barrel)











Retail gasoline

$3.4850

$3.4770

3.94%

6.38%
(per gallon; AAA)












Caterpillar defies worries
Like the Dow, Caterpillar had a yo-yo day, rising to as high as $85.45 and falling back to $80.29 after the company said it was planning only for modest growth in the rest of the year and saw a slowdown in Chinese business. The stock closed at $82.60, up $1.17.

Still, the company is selling more excavators, scrapers and dozers as customers in developed countries replace aging equipment and U.S. construction spending increases, rising 11% through May from an 11-year low in February last year.

Boeing gained $2 to $74.03. Total jet deliveries should rise to a range of 585 to 600 this year, the company said. That may help the U.S. plane maker reclaim the top spot in commercial production it lost to European rival Airbus in 2003.

Broadcom shares were up $2.21 to $32.98. The company's chips help mobile devices connect to the Internet. Broadcom forecast third-quarter sales that may exceed some analysts’ estimates, helped by strong demand from its smartphone customers.

Broadcom's largest customers are Apple and Samsung Electronics, the biggest players in the smartphone market.

Ford see huge European losses
Ford Motor
(F) cut its operating profit forecast for 2012, due in part to wider losses in Europe, where the automaker expects to lose more than $1 billion as the deepening economic crisis hits auto sales.

Ford said profits in North America and at Ford Credit, its finance arm, would offset losses in Europe and Asia and reduce profits in South America this year. The big question is how bad Europe will get.

"I'm certain Ford is underestimating the situation there, but I think everyone is," Guggenheim Securities analyst Matthew Stover told Reuters. "We haven't seen the worst yet."


In a conference call with analysts, CEO Alan Mulally said Ford is reviewing all aspects of its business in Europe, but declined to provide details about any efforts to reduce capacity. Shares were down 9 cents to $8.97.


The European debt crisis is causing buyers to put off new purchases. General Motors (GM), which reports next week, also is facing losses in Europe.


The new iPhone hurts the old iPhone
Apple shares fell as customers apparently have delayed purchases of existing iPhone versions while awaiting the next model.

Samsung Electronics releases several designs a year to defend its lead in the $219.1 billion smartphone market.

That raises the stakes for Apple Chief Executive Officer Tim Cook, who relies on a once-a-year upgrade of the device that makes up nearly half of the company’s sales.

Netflix gets hurt by the Olympics; Wellpoint medical costs jump
Netflix plunged $20.11 to $60.28. The Summer Olympics are likely to hamper efforts to sign up new customers, Chief Executive Officer Reed Hastings said. The full-year goal of adding 7 million new U.S. users will be "challenging" if this quarter’s most optimistic targets aren’t met, he said.

Wellpoint lost $7.41 to $54.01. The second-biggest U.S. health plan reduced its full-year forecast after quarterly profit missed analyst estimates because of higher medical costs. Other health-insurer shares were lower as well.

Panera Bread (PNRA) shares were up $11.45 to $153.36 after reporting a 27% increase in second-quarter earnings. Revenue climbed 18% to $530.6 million.

TripAdvisor (TRIP) tumbled $7.29 to $36.18. The online travel-recommendation service, which was spun off from Expedia (EXPE) in December, reported second-quarter revenue that missed analysts’ estimates.

RadioShack (RSH) tumbled $1.05 to $2.60. The electronics chain suspended its dividend and posted an unexpected second-quarter loss as costs soared.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.090%

25.00%

900.00%
5-year Treasury note 

0.555%

0.551%

-23.87%

-33.13%
10-year Treasury note

1.406%

1.404%

-15.25%

-24.85%
30-year Treasury bond

2.467%

2.469%

-10.71%

-14.61%
Currencies











U.S. Dollar Index

83.641

84.145

2.31%

3.87%
British pound

1.5509

1.5511

-1.24%

-0.19%
(in U.S. $)

 








U.S. $ in pounds

£0.645

£0.645

1.26%

0.19%
Euro in dollars

$1.22

$1.21

-3.71%

-6.19%
(in U.S. $)

 








U.S. $ in euros

€ 0.823

€ 0.829

3.85%

6.59%
U.S. $ in yen 

78.25

78.17

-1.88%

1.49%
U.S. $ in Chinese

6.41

6.39

0.63%

1.37%
yuan











Canada dollar

$0.986

$0.979

0.33%

0.48%
(in U.S. $)

 








U.S. dollar 

$1.015

$1.021

-0.32%

-0.48%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,608.10

$1,576.20

0.24%

2.64%
(per troy ounce)

 








Copper (-HG)

$3.375

$3.353

-3.49%

-1.79%
(per pound)

 








Silver (-SI)

$27.4660

$26.8110

-0.53%

-1.61%
(per troy ounce)

 








Wheat (-ZW)

$9.0325

$8.7875

19.28%

38.38%
(per bushel)

 








Corn (-ZC)

$7.8800

$7.783

24.14%

21.89%
(per bushel)

 








Cotton 

$0.6951

0.7103

-2.55%

-24.18%
(per pound)

 








Coffee

$1.7630

1.7545

3.28%

-23.23%
(per pound)

 








Crude oil (-CL)

$88.97

$88.50

4.72%

-9.98%
(per barrel)










 

38Comments
Jul 25, 2012 3:13PM
avatar
"The Democratic-majority U.S. Senate is expected to cast a purely symbolic vote to let some tax cuts for upper income earners expire on December 31, this Wednesday.
The Republican-controlled House of Representatives will advance its own symbolic bill next week continuing the cuts for all levels of income."

Two wrongs don't make a democracy. If you can't do your job for the good of all, then you aren't supposed to be there.

- Clear out the lobbies.
- Arrest hold-outs.
- Stop the paychecks and freeze the bank accounts.
- Feed them White Castle not cake.
- Close the banks.
- Commandeer revolving credit mechanisms so the nation keeps integral.
- Abolish Incorporation.
- Demand accountability.
- Arrest every lawyer who stands in your way.
- Prepare the Pentagon to take action against Wall Street. Fire those who balk.
- Tweet the rich, give them 24 hours to leave with nothing or prepare to cooperate.
- Promise PEACE with a threat of WAR. Thanks those who grasp what it means.
- NEVER again piss off the People by lifting the steeple, tower and paper to power over us.
- Reform EVERYTHING that can amount to something without blood sweat and tears. THAT is the real education in America.
Jul 25, 2012 2:11PM
avatar
Oil inventories are up.  No surprise there, aren't we now exporting oil?  Gas prices should be dropping - not rising.   The greed machine does not care.  Even though they know the US's and the world's economies are tanking, they look for signs and hopes to keep prices high.

What is the real reason why east coast refineries are closed?  When gasoline is $3.90 a gallon the greed machine can afford to import gasoline....

An old timer said that the downfall of the New Haven Railroad was due to management and the men.  Think about that?

Jul 25, 2012 1:14PM
avatar
I think we have it right... no one cares about Caterpillar until we overthrow Big Oil and start breaking ground on no gasoline dependent civilization here in America. Boeing... it's getting so our luggage costs as much to fly as our bodies do, so... where ya' goin' baby? Ford & GM... have you figured it out yet that the kids who bought those Mustangs and Camaros are same ones defaulting on credit with no assets, just irresponsibility?
We're UP... so banks must be buying their own stocks again. There's NO ECONOMY out here, Wall Street. Analyze this... if you're not recommending FULL job recovery, you're advocating collapse.

Jul 25, 2012 3:23PM
avatar
"V_L, you talk a good game, so go ahead and start hiring!   If your business judgement says this a good environment, under Obama to hire, go ahead"

What does he have to do with my business decisions? I actually signed for additional space this week and started redesigning for a new venue. I don't hire anyone but I do work in conjunction to lift many small and/or local businesses together. That said, a couple of people have indicated some in-house cooperation that benefits and merits strong consideration. You absolutely don't get it. The game isn't to compete in this economy, it's to thrive in the sub-economy. An army of success exists under your nose and you are not just clueless to it, you derive nothing from it. A reminder that I will vote for who I believe is the best choice while you can't seem to make it out of your box. My field of endeavor is thriving in Chaos. Yours... not so much. If you ask Tom Peters-- I bake really well.
Jul 25, 2012 4:44PM
avatar
We call it as we see it people and often as its happening...We could be up 100, 200, 300, its immaterial; when manipulators are in control those are just sucker's rallies....At about 1500 hrs the call came and scumbags started doing their thing and down we went...The Dow was able to stay in the green, whoopee after 3 days of triple digit losses, the S&P and Nasdaq weren't so lucky and imagine if we didn't close for another 30 minutes....Yup, all in the red and probably another triple digit loss....The sad thing is that we don't see anything changing, crooks will keep cheating and manipulating because they are not scared of getting caught. Insider trading is so out of control its not funny...The SEC you ask? Where are they? Who are they? Incompetent neophytes...Remember Madoff? And what about tomorrow, are they going to stop cheating just because? Everyone would be shocked to learn the amount of money these pieces of dirt are stealing from Americans just like them. Oh well, enough ranting. Back to work tomorrow.
Jul 25, 2012 7:12PM
avatar
Steve - Like everything else, these boards have changed, and IMHO, it hasn't been for the better.  It seems like the last year or so it's gotten really bad.  The early article used to appear before 8AM, now it's about when the market opens.  There's less civil dialogue and more distortion and BS spam than ever before.  We used to have a decent debate and exchange of ideas, now it's just a bunch of dumb idealogues reposting the same talking points and the same crap is rehashed over and over.  Part of this is the changes in the blog - they've taken away lots of good functions like quotes and bold.  However, the people posting have changed, some have disappeared and new ones have arrived.  It just seems the chemistry is off from what it used to be.  And then lots of folks got banned and many posts started getting deleted for no reason.  It's kind of a shame, but maybe it's also a good thing - new formats and new users could mean new ideas and opinions in the future. 

Regardless, I'll check in from time to time, but there are more pressing issues right now, like what we're going to do with all these peppers and tomatoes.  Seriously, I've eaten 2 heirloom tomato sandwiches everyday for the last month, and that doesn't count the dozens of tomatoes I've eaten in salads, salsa and sauce. Plus, we've got tons of sun-dried tomatoes and about 12 dozen beefsteaks in the deep freeze.  And don't get me started on the peppers - I've got 10 dozen habaneros in the dehydrator right now, and several gallon bags of dried cayennes.  We've already made 1 giant ristra and we're working on our second one, and we've put up more than a dozen quarts of jalapeno pickles.  That doesn't count the dozens of sweet and hot peppers we've roasted off and put up in oil and vinegar.  We've frozen more than 10 dozen Aneheims and the wife made a double batch of zucchini bread yesterday.  We have quarts of cherry tomatoes that we've given away and more are sitting on our kitchen counter.  We are blessed!
Jul 25, 2012 4:50PM
avatar
The country would indeed be a far better place if we could eliminate the Republican party.
Jul 25, 2012 4:59PM
avatar
Porfolio wise and money wise you lost a lot of money today even though the Dow was up. 
Jul 25, 2012 3:04PM
avatar

Companies hire and fire because of one thing. Customer demand. Either you need more employees

not keep up with demand or you dont. 

Jul 25, 2012 8:27PM
avatar
V L 

The casino owners are betting on Romney IE:  Adelson,Wynn,Trump just to name a few.

I wonder what kind of Odds Vegas will give on this one and for whom ?
Jul 25, 2012 6:42PM
avatar
wow ~ nothing but spam city here anymore!
Jul 25, 2012 3:27PM
avatar
SOS - 3:00 and down it goes..... ESAD WS
Jul 25, 2012 5:41PM
avatar
It does not matter how much oil we use or don't use, it is not going to matter because Wall Street will keep it high to gouge every cent they can out of the working and poor people in this country. Why did it go up today, Greed as usual.
Jul 25, 2012 2:14PM
avatar
The latest rally has lasted a bit, we are trying to hang in there...Be careful though, remember sucker's rallies and the way these scumbags have been manipulating things, nothing surprises us Still 2 long hours togo...Be cautious.....More after the close.
Jul 25, 2012 11:20PM
avatar
If it is indeed true that the money printing has had little effect on inflation, then the money printing will only increase as there are no negative consequences to doing the printing. Of course, once that genie turns against them, they can't regain control because they will not have a single tool in the toolbox to stabilize the economy. Some recognize the tipping point and some feel the concept is a urban legend best ignored. The FED is going through the motions and hoping for time to allow the illusion of  a safely lowered expectation. Income stagnation or loss + inflation = shortage of customers. it is only a matter of time.
Jul 25, 2012 8:23PM
avatar

You noticed huh, Brutus ??....Should have been around here 10-12 years ago......

 

We actually, spent more time discussing then arguing; Unless a very specific topic.

We more or less longed for different takes or opinions to learn something.

Can't recall any Political arguments to speak of, maybe a remark ocassionally.

Very seldom name calling, or that type of word usage.

AND most discussions centered around Markets and Investments or Content of Articles.

But I also spent more time on Blogs of the investment contributors here, on MSN.

And I'm not sure when or how many of the other Contributors, were on the Home page...?

I left the site for a number of years, got tired,bored or fed up with some of the crap filtering in.

Like it has been the past 6 months or so.........

Jul 25, 2012 9:03PM
avatar
Welcome back Classic :)
I missed ya.



Jul 25, 2012 8:03PM
avatar

"Steve - Like everything else, these boards have changed,"

 

Your posts reads like a script for Raid Bug Killer. The Republican, I mean Cockroad... recognizes he isn't going to settle in and infest this site so he swings his napsack on a pole over his shoulder and heads to some GOP-friendlier place (if there is one) while a representative sunset settles in the back drop.

The reality is-- people want to read about economics, not politics. If the polls are correct, a very small group of far Right froths the Mitt-wit, everybody else is Left of that but unsettled. What lacks are facts and a suspression of fiction. People demand the truth. No elections without corrections. Imagine how cheesed Sheldon Adelson will be when he sees his bets not only didn't pay off, they didn't win, place or show or show up at the finish line.

Jul 25, 2012 10:05PM
avatar

"Does anyone remember the last time there was anything GOOD to say about GOVERNMENT anywhere at any level."

 

Birth Growth Maturity Decline. Guess which cyclicality arc our government is in? The trick is to NOT fall into the pit when the seat in the latrine gives under the weight of obese bureaucracy.

Jul 25, 2012 9:04PM
avatar
Does anyone remember the last time there was anything GOOD to say about GOVERNMENT anywhere at any level. Everyday in one way or another the common person has to try and deal with something the GOVERNMENT has dumped upon them. And the sad part is the GOVERNMENT is exempt from their damages because they have designed the system to work in a way that they make out regardless.............GO FIGURE!!!!!!!!!!!!!
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