Stocks mixed as investors mull profits, G-20

Treasury Secretary Geithner presses for trade imbalance rules at the Seoul summit. Quarterly results from Honeywell and Verizon drop but beat expectations. Crude oil prices rise as gold prices fall.

By TheStreet Staff Oct 22, 2010 8:01AM

TheStreetBy Melinda Peer, TheStreet

 

Updated 1:26 p.m. ET

 

Stocks were mixed Friday as concerns about the currency debate at the Group of 20 summit overshadowed better-than-expected quarterly results from major companies.

 

At 1:26 p.m. ET, the Dow Jones Industrial Average ($INDU) was down 25 points, or 0.2%, at 11,122. The S&P 500 ($INX) was up 1.5 points, or 0.1%, at 1,182. The Nasdaq ($COMPX) was rising 17 points, or 0.7%, at 2,477.

 

Treasury Secretary Timothy Geithner has been pressing for rules to address trade imbalances at the G-20 summit, which ends tomorrow. The effort is designed to get China to strengthen its yuan, and it is facing opposition from countries that rely on exports, according to reports.  

 

"This weekend, we have some global macroeconomic issues, and then it's Election Day, with the Fed meeting the next day," said Michael Shea, a managing partner at Direct Access Partners. "That's really what the market is looking to, and it can't come here fast enough."


The dollar was trading lower against a basket of currencies, with the dollar index down by 0.2%.


Concerns about the trade debate countered better-than-expected results at major companies.

 

Bank of America (BAC) was the best-performing Dow stock, rising 1.1%. Verizon Communications (VZ) and American Express (AXP) were its biggest laggards, losing 1.7% each.

 

Verizon said third-quarter earnings fell 25% to $881 million, or 31 cents a share, as the company signed fewer new customers than a year earlier. Excluding pension costs and other expenses, its profit was 56 cents a share, topping estimates for 54 cents.

 

Honeywell's (HON) net income fell 18% to $499 million, or 64 cents a share, on revenue of $8.39 billion. But the company beat analysts' expectations for a profit of 62 cents on revenue of $8.22 billion. Honeywell's shares were down 1.3% at $46.06.

Shares of Ingersoll-Rand (IR) were rising 1.2% to $39.42 after the company reported adjusted earnings of 80 cents a share on revenue of $3.73 billion. Analysts had expected a third-quarter profit of 79 cents a share on sales of $3.73 billion.

 

Mutual fund company T. Rowe Price (TROW) said earnings rose to 64 cents a share in the third quarter, topping estimates of 60 cents. The stock was gaining 4.2% at $54.89.

 

Schlumberger (SLB) reported an adjusted profit of 70 cents a share as sales rose 26% to $6.85 billion, slightly better than analysts had expected.

 

KeyCorp (KEY) more than tripled its second-quarter profit to 19 cents a share, surpassing expectations for 3 cents a share. KeyCorp shares were adding 0.7% at $8.40.

 

Caterpillar (CAT) agreed to buy German engine manufacturer MWM Holding for 580 million euros ($807.2 million). Caterpillar shares were losing 0.9% at $78.19.

 

In commodity markets, crude oil for December delivery was gaining 49 cents at $81.05 a barrel. The December gold contract was losing $1.30 at $1,324.30 an ounce.

 

The benchmark 10-year Treasury note fell 4/32, increasing the yield to 2.554%.

 

Hong Kong's Hang Seng fell 0.6%, while Japan's Nikkei added 0.5%. The FTSE in London was slipping 0.3%, and the DAX in Frankfurt was down by 0.7%.

 

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118Comments
Oct 22, 2010 9:48AM
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WOW....how America sits on it lazy butt while our Corrupt Gov. continues to make the masses "feel good" and they destory the dollar and the condfidence in America's integrity.  The world thinks our Gov is a joke and see all of the manipulation and corruption. No wonder you hear what you do from abroad.

 

Now.. the "big" news is whats going to be going on this weekend in Korea. The "G20" will be meeting again to hammer out some form of monetary agreement, as the currency wars we predicted are raging wild. So now we have Timmy "turbo tax" Geithner, telling the world he's in favor of a strong dollar ( choke, gag, heave, lol, ) and the rest of them chuckling at him. 

Oct 22, 2010 11:32AM
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Being a moderate is fine till you don't vote because you don't care to take a position. The politicians love moderates because they can run with their power and answer to no one cause no one cares enough to do anything about the abuse. We got what we voted for and now the whole country is about as split as it gets without a civil war. Of course everyone has their hackles up, the country is way past broke and doesn't act like it's a problem.
Oct 22, 2010 12:29PM
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Iggy, more like when Obama was on the bridge and yanked the wheel hard left and ran into the iceberg...  Bush was wining and dining the fat cats in 1st class...'

 

The economy didn't start going south until it looked like we would elect a socialist and begin an all out war on business and the middle class....

 

Nov 2nd cannot get here fast enough...

 

Unemploy the Donkeys!

Oct 22, 2010 2:06PM
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rtt

 

on the other hand the banking houses giving our tax money to the chamber of commerce would be.

Oct 22, 2010 2:03PM
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The Democrats will even stoop to deficit spending to help fund campaigns this year...what a sign of the times! Witness:

The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections, thanks to an 11th-hour effort to boost

Deeeeman

That is not tax payer dollars. That is the Union's Politcal Action Fund. AFSCME is not a government entility. That would be like saying the UAW is part of GM

Oct 22, 2010 1:53PM
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This election is about one man, Barack Obama, who fairly or not represents the following

Deeeman

I think that is how Obama made it to the whitehouse. The last election was about one man...Bush

 

McCain would probably have been ok (without Palin). However the right wignuts can't stand a moderate republican.

Oct 22, 2010 1:49PM
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I still think there is another 30% to be had in the next couple of years from the S and P 500. Just remember when the analysts start talking about dow 36000 will be a reality in a year or 2 the party is almost over. But right now, jump on in the water is fine. Foriegn markets (with a healthy dose of emerging holding) may add a little zip to your gains also...
Oct 22, 2010 1:18PM
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I found this post on the WSJ and thought it an excellent synopsis of some history.


"This whole mess was launched by the stock market crash of 1929, which was caused by the Fed. During the Roaring 20s, the Fed set below-market interest rates and low reserve requirements that all favored the big banks. The money supply actual increased by about 60% during this time. The phrase "buying on margin" entered the American vocabulary at this time as more and more Americans over-extended themselves to take advantage of the soaring stock market. So what went wrong? In 1929, the Fed realized that it could not sustain its current policy. When it started to raise interest rates, the whole house of cards collapsed. The Stock Market crashed and the bank panics began.

Hoover's response? Government meddling. While I'm not sure Keynes would have thought that it was a good idea to raise prices in response to a depression, the latter-day Keynesians among us essentially agree with Hoover's approach, which was to artificially boost price (via tariffs) and demand (via stimulus) during a depression, as follows:

1. Protectionism (Smoot-Hawley Tariff, 1930). Let's pump up those prices (instead of letting prices drop to market levels), and protect our own industry, right? America First, right? Who can argue against a little flag waving? The impacts on international trade were catastrophic. This and other effects caused international trade to grind nearly to a standstill as other nations levied their own tariffs in response to ours; the depression spread worldwide. In response to this self-inflicted disaster, Hoover resorted to Stimulus.

2. Stimulus (1930-1931). Pump up that phony demand! That's the ticket! In response to the worsening situation, the Hoover administration launched programs to build roads, public buildings, and airports, and increased the country's credit facilities, including strengthening the banking system. A part of this effort was the Reconstruction Finance Corporation (RFC) with $2 billion to shore up overwhelmed banks, railroads, factories, and farmers.

As we know, it was all a miserable failure; the wrong medicine for the disease.

Does any of this sound strangely familiar?

Then, FDR doubled down on Hoover's bad medicine. At least one member of his administration had the decency to tell the truth that these measures had failed. FDR's Treasury secretary and close friend, Henry Morganthau, conceded this fact to Congressional Democrats in May 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"*

"There is no crisis so severe that government intervention cannot make it worse." --Vox Day"

Oct 22, 2010 12:36PM
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Volcker

 

Give it up.  Mirageguy is moving to Texas so he can get involved in rewriting the history text books to better fit his image.

Oct 22, 2010 12:25PM
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I don't even know why we argue about the corporate income tax.  Shareholders don't pay it.  It is like a Sales Tax on the product.  The customer pays 100% of it.  I suppose you could oppose sales taxes based upon the fact that they hit the poor the hardest...

 

Personally I like the corporate taxes.  I would do away with the income tax, and just raise the corporate rate even higher, so that the poor pay their fair share...

 

Maybe then we could get a smalle rgovernment instead of the unsustainable mess we have now!

 

And the Demcorats would be stupid enough to support this, afterall they are stupid enough to support the corporate tax now...

Oct 22, 2010 12:23PM
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SOG, yeah it sounds sweet. I show it a couple times a year at local fundraisers. My farming relatives couldn't afford to keep it up as it's too small for their operations now and all their money goes to stay afloat in today's world. 
Oct 22, 2010 12:18PM
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Deklen,

 

Bush has been gone almost 2 years... Obama certainly owns the economy by now, and he has only made it far worse...  Most people wish the economy was as good as it was BEFORE it looked like the socialist Obama would win and begin his war on business and the middle class...

 

Oct 22, 2010 12:11PM
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1954 model 60 - replaced the A - Bought by my Grandfather new and always in the family. I restored it 7 years ago and it's strictly a show piece now. 
Oct 22, 2010 11:19AM
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I am very glad to see good earnings news from several companies reporting. I am also cautiously skeptical of the current market's performance...why shouldn't I be? It's 2 weeks before an election....the media is saturated with stories from both sides of the isle fighting for the battle of persuasion. I think all working americans want to see real improvements and half the time we don't know if the improvements are real or not....too many liars out there falsifying reports....falsifying retirement funds...falsifying has become the american way in business and politics...that's just sad. I am an entrepreneur and I also find myself being the "little man" in political vocabulary...I am neither democrat or republican....and don't like it that sarah palin highjacked the tea party to ride on it's wave of power from everyday people....americans are generally good people....american politicians and powerful businesses are of another persuasion in my opinion.  I think the term "moderate" has been highjacked by conservative talk show hosts as an oxymoronic term....because they saw the danger that lies in a position living with give and take, healthy compromise....there is such a thing....I think most americans are that dirty little word...."moderate".....and I think that is good. Hopefully our politicians will also be as such.
Oct 22, 2010 9:49AM
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Brutus, thanks. My point was that with all those taxes, regs, and worker compensation and benefits to contend with, it's no wonder to me why our companies have left in droves.  LIbs think these companies are in business to provide well paying jobs and to support the local government. CEOs have a different opinion.
Oct 22, 2010 9:38AM
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Well, if when federal funds were being spent on road projects, the government kicked off all non US made machinery, equipment and supplies, then I would say they set a good example for us to follow. When I buy a former FEMA trailer for our river camp and it has furniture that the government bought that came from Viet Nam, I know that we are F'ed up. Charity begins at home and our tax dollars are buying more foreign products all of the time and I should feel bad if I buy a cheap chinese tool that I will use once every other year? 
Oct 22, 2010 9:38AM
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Brutus , the US corporate incoome tax rate is 39%. That's on income not revenue. The libs cry about companies playing games. Can't do that much any more with the 404 regs. The 39% doesn't include the employer portion of FICA, Medicare, FUTA, or SUI. It doesn't include state income taxes, property taxes, sales taxes, excise taxes, or all the taxes passed on by the companies they do business with. Obama lied during the debates or was just too plain stupid to understand that we are one of the highest taxed countries for businesses to operate in. And the libs still cant figure out why it is cheaper to move your business overseas if possible. Excessive taxes, choking regulations, and over priced labor (and benefits) do not promote business growth.
Oct 22, 2010 8:56AM
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The AP prints that they had a 25% decline in Q3. Now maybe the estimaters who were beat should have predicted a 50% decline and then we would have had a large earnings surprise to the up side making us all feel very very happy. What a rigged little system the earnings estimates and reporting in media is.    

Oct 22, 2010 8:54AM
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At least in Germany the cost is known. Here we are running on a hope and a prayer with this Congress's planning. 
Oct 22, 2010 8:46AM
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Ignatius75.....Germany has a centalized and govt facilitated health care with contributions taken directly from each worker's paycheck!  It certainly does not have low labor cost and it certainly does have full unemployment insurance and other 'safety net' entitlements for the elderly and unemployed.

 

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