IBM, Intel limit Dow to small gain

Housing starts hit a 4-year high, cheering investors. But the Dow and Nasdaq muster only small gains because of weakness in IBM and Intel. Apollo shares sag on earnings warning. Nike ends ties with Lance Armstrong. Oil, gold move up.

By Charley Blaine Oct 17, 2012 1:28PM
Charley BlaineUpdated: 6:50 p.m. ET

This was one of those days when one stock -- IBM (IBM) -- made the market look worse than it actually was.

The major averages did, in fact, finish higher today, thanks to gains for housing, financial and biotech stocks. Housing starts hit a four-year high in September. Building permits also jumped, suggesting building should be solid in the months ahead.

Because of the report, homebuilding stocks surged. So did such housing-related stocks as Home Depot (HD), Lowe's (LOW), Caterpillar (CAT), La-Z-Boy (LZB), Whirlpool (WHR) and Bed Bath & Beyond (BBBY) rallied nicely.

The Dow Jones Industrial Average ($INDU) finished up a modest 5 points to 13,557. IBM was down $10.37 to $200.63 after a disappointing earnings report. Had IBM and Intel (INTC), which also disappointed, simply finished flat on the day, the blue chips would have been up 90 points. IBM's decline subtracted nearly 80 points from the Dow. Intel subtracted an additional 4 points from the index.

The Dow's gain was its fourth in a row and brought the index within 40 points of its 2012 closing high of 13,596.93, set on Sept. 20. Meanwhile, the Standard & Poor's 500 Index ($INX) was up 6 points to 1,461, about 5 points below its 2012 closing high of 1,466. The Nasdaq Composite Index ($COMPX) was up 3 points to 3,104.

Article continues below.
Twenty-three of the Dow's 30 components were higher, led by Alcoa (AA), Johnson & Johnson (JNJ) and Walt Disney (DIS). Home Depot was up 53 cents to $61.39.

The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 3 points to 2,776. Intel was a problem. A bigger issue was Apple (AAPL), the biggest influence on the index. Shares were down $5.18 to $644.61.

The biggest issue was Apollo Group (APOL), operator of the University of Phoenix for-profit colleges, down $6.09 to $21.40. The company is suffering declining enrollments and will close 116 locations and lay off some 800 employees. Other for-profit education companies also saw shares slide.

Thursday is a big day
Markets will pay very close attention to China's third-quarter gross domestic product report. The consensus estimate is for 7.4% year-over-year growth, down slightly from 7.6% annual growth in the second quarter.

Quarterly results before the U.S. open are due from Blackstone (BX), Capital One (COF), Diamond Offshore (DO) and Union Pacific (UNP) and Verizon Communications (VZ).

After hours are tech giants: Google (GOOG), Microsoft (MSFT), Chipotle Mexican Grill (CMG) and SanDisk (SNDK).

Economic reports include the weekly report on jobless claims, the Philadelphia Federal Reserve Bank's manufacturing index and the Conference Board's index of leading economic indicators.

Futures trading suggests a flat open for stocks.

American Express beats estimates, but shares slip
American Express
(AXP) shares slipped to $59.05 after hours today after the company said it earned $1.09 a share in the third quarter, up 6 cents from a year ago. The earnings matched Street estimates. But card-spending growth slowed. It was 8% in the United States and 6% globally, less than the company expected, CEO Kenneth Chenault said in a statement.

Revenue, net of interest expense, increased 3.8% to $7.86 billion.

Facing increased competition for its base of affluent spenders, American Express has sought to enhance the value of its global payments network. Last week, the company introduced its Bluebird prepaid debit card that Wal-Mart Stores (WMT) is selling at more than 4,000 locations across the U.S. and online.

Separately, shares of eBay (EBAY) drifted lower after hours after the company earned 55 cents a share in the third quarter, up from 48 cents a year ago and ahead of the Street estimate of 54 cents.

The slippage was due to the company's guidance: revenue of $3.85 billion to $4 billion and earnings of 66 cents to 69 cents. The consensus estimates have been $3.94 billion and 68 cents.

Shares were at $48.04 after hours. That was down from a regular close of $48.20, a decline of 4 cents. The shares are up about 59% this year.

Europe shows some strength
The market got some early support from Europe, where Moody’s held Spain’s bond rating above junk grade. Spain's Ibex 35 Index ($ES:IB) jumped 188 points to 8,128. Investors sold Treasurys, sending 10-year yields to 1.811%, up from Tuesday's1.72%. The yield was the highest since Sept. 17. German, French and British stocks were higher.

Crude oil (-CL) in New York settled up 3 cents to $92.12 a barrel after being down for most of the day. A decline in the U.S. dollar may have helped. Brent crude, the benchmark North Sea oil, was down 94 cents to $113.06 a barrel.

The national average price of regular unleaded gasoline was at 3.756, down from Tuesday's $3.773, according to AAA's Daily Fuel Gauge Report. The price is down 1.4% this week.

Gold
(-GC) settled up $6.70 to $1,753 an ounce.

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$92.12

$92.09

-0.08%

-6.79%
(per barrel)











Heating oil (-HO)

$3.1894

$3.1985

0.96%

9.44%
(per gallon)











Natural gas (-NG)

$3.4700

$3.4370

4.52%

16.09%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7642

$2.8021

-5.34%

5.29%
(per gallon)











Brent crude 

$113.22

$114.00

-1.22%

5.44%
(per barrel)











Retail gasoline

$3.7560

$3.7730

-0.82%

14.65%
(per gallon; AAA)












Earnings disappointments hit IBM, Intel
IBM and Intel were both off after earnings disappointments. IBM's problem was that revenue was off 5% from a year ago (2% if you adjust for currency changes) to $24.7 billion. Earnings were up 4% to $3.44 a share -- 8% if you exclude a charge on its United Kingdom pensions.

The revenue miss had much to do with drops in mainframe, storage and middleware sales. And that pulled related stocks lower, including EMC (EMC), VMWare (VMW), Citrix Systems (CTRX) and Red Hat (RHAT).

Intel fell because of cautious guidance. It cut its guidance for fourth-quarter gross-profit margin to a range of 57% to 59%. It sees softening demand for personal computers even in China and among notebook computers.

A big gain for housing
But the housing numbers were quite strong. Housing starts ran at a seasonally adjusted 872,000, up 15% from August and 34.8% from a year ago. Single-family starts were up 11% from August to a seasonally adjusted 603,000 and 42.9% from a year ago.

Permits were up 11.6% from August to 894,000 units, with single-family permits up 6.7% to 540,000.

While the changes are big, remember that housing starts hit a seasonally adjusted 2.2 million units in February 2005.

Still, the gains suggest an industry that's starting to gain some momentum, given low mortgage rates and an economy that's at least stable.

Nike drops Lance Armstrong
Nike (NKE) was up 33 cents to $97.57. The athletic-shoe-and-apparel maker announced today it is severing ties "with great sadness" to cyclist Lance Armstrong after a report detailed his alleged use of performance-enhancing substances.

Nike will continue to support Livestrong, the foundation Armstrong founded to help people affected by cancer. Armstrong is stepping aside as chairman.

Housing, banking and utilities lead the market; Apollo is drubbed
Among the top 10 S&P 500 performers were homebuilders PulteGroup (PHM) and D.R. Horton (DHI). Lennar (LEN) was 51st.  But Whirlpool was 27th, and Weyerhaeuser (WY) was 26th.

The S&P 500 leader was Dean Foods (DF), up $1.92 to $16.96. It plans to spin off its WhiteWave-Alpro division into a new company. The division makes Silk soy milk, Land O’Lakes and Horizon Organic.

The only sectors of the market to show declines -- and small declines at that -- were technology and health care.

A total of 356 S&P 500 stocks were higher.

Meanwhile, 52 Nasdaq-100 stocks were higher, led by Green Mountain Coffee Roasters (GMCR). The laggard was Apollo Group.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1100%

0.090%

22.22%

1000.00%
5-year Treasury note 

0.772%

0.692%

22.54%

-6.99%
10-year Treasury note

1.811%

1.720%

10.63%

-3.21%
30-year Treasury bond

2.988%

2.915%

-1.45%

3.43%
Currencies











U.S. Dollar Index

79.059

79.464

-1.21%

-1.82%
British pound

1.6176

1.6126

0.10%

4.11%
(in U.S. $)

 








U.S. $ in pounds

£0.618

£0.620

-0.10%

-3.95%
Euro in dollars

$1.31

$1.31

2.14%

1.33%
(in U.S. $)

 








U.S. $ in euros

€ 0.762

€ 0.763

-2.10%

-1.31%
U.S. $ in yen 

78.93

78.87

1.23%

2.37%
U.S. $ in Chinese

6.28

6.26

-0.09%

-0.80%
yuan











Canada dollar

$0.000

$1.014

-100.00%

-100.00%
(in U.S. $)

 








U.S. dollar 

$0.983

$0.986

-0.10%

-3.67%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,753.00

$1,746.300

-1.18%

11.88%
(per troy ounce)

 








Copper (-HG)

$3.748

$3.700

-0.27%

9.08%
(per pound)

 








Silver (-SI)

$33.232

$32.959

-3.89%

19.05%
(per troy ounce)

 








Wheat (-ZW)

$8.5625

$8.478

-5.12%

31.18%
(per bushel)

 








Corn (-ZC)

$7.4550

$7.383

-1.42%

15.31%
(per bushel)

 








Cotton 

$0.7786

$0.749

10.21%

-15.07%
(per pound)

 








Coffee

$1.6150

$1.628

-6.92%

-29.68%
(per pound)

 








Crude oil (-CL)

$92.12

$92.090

-0.08%

-6.79%
(per barrel)










 

345Comments
Oct 17, 2012 2:45PM
avatar
Obama lied repeatedly about energy. Example - He said we are expanding oil and gas production. BULLSH*T. Just this week Ken Salazar defied Congress and put 11,000,000 acres off limits. The only expansion of oil and gas production is being done on private land and is more than offset by the reduction on public lands.

Congress (DEM and GOP) voted to allow exploration on those 11,000,000 acres, but the PreZ thinks he is all 3 branches of Gov't. 

He also said we are expanding coal usage.....seriously? Are you dumb or just plain azz stupid?
Oct 17, 2012 2:10PM
avatar
The winter months are always the booming months for building.  I will believe the economy is getting better when I get back to 40 hours (just that would help some but a raise that I haven't seen in 5 years would help too). 
Oct 17, 2012 2:51PM
avatar
Speaking of the war on Women....Obama sends Susan Rice and Hillary to take the Libya bullet for him. 
Oct 17, 2012 2:30PM
avatar
Two major forces in politics gave opposing endorsements for President yesterday.

H. Ross Perot endorses Romney

Honey Boo Boo endorses Obama

In fact, The President has been racking up the endorsements from such heavy weights as Kim Kardashian and Hugo Chavez in the last week. 
Oct 17, 2012 2:27PM
avatar

USA Today - October 17th, 2012

1:04AM EDT October 17. 2012 - Ron Fournier,The Atlantic: "Who won? The cheap answer is President Obama because his goal following a catastrophically sluggish first debate was so clear: Show some life. And, indeed, the president aggressively criticized Mitt Romney, labeling him a hypocrite and a liar who favors the rich at the expense of the middle class and poor. But Romney got his licks in, too, wrapping a miserable economy around the incumbent's neck. 'The middle class is getting crushed by the policies of a president who does not understand what it takes to get the economy working again,' Romney said. Bottom line: Call it a tie."

OUR VIEW: 

Oct 17, 2012 2:25PM
avatar

Gallup -


Romney 51


Obama - 45


All registered voters are asked: "Suppose the presidential election were held today, and it included Barack Obama and Joe Biden as the Democratic Party's candidates and Mitt Romney and Paul Ryan as the Republican Party's candidates. Who would you vote for [ROTATED: Barack Obama and Joe Biden, the Democrats (or) Mitt Romney and Paul Ryan, the Republicans]?" Those who are undecided are further asked if they lean more toward Obama and Biden or Romney and Ryan and their leanings are incorporated into the results.

These results are for likely voters, who are the respondents Gallup deems most likely to vote based on their responses to a series of questions asking about current voting intentions, thought given to the election, and past voting behavior. Each seven-day rolling average is based on telephone interviews with approximately 2,700 likely voters; margin of error is ±2 percentage points.

Oct 17, 2012 2:34PM
avatar
tiwit said;
"Hey Right Wingers, have you finally realized you have a DUD for a candidate?   Mr. Upper Crust has gone Stale......time to throw in the trash.......Maybe a chance for the GOP in 2024.......after 8 years of Clinton,   doubt it.........I am pretty excited knowing I may Never see another Republican president in my lifetime.........Yes​!!!!!"

Really? Wow, please accept our condolences. We didn't realize you were terminal, with just under three weeks to live............
Oct 17, 2012 2:54PM
avatar

well whaddya know?? kandi crowley or whatever the hell her name is had to eat crow and admit she lied with obama in the debate, on cnn, yea yea, I know 3 people saw it but still, looks like Romney is right, AGAIN, even when she interrupted President Romney 28 times!! meanwhile back in realityland obama is sinking' quicker than the Titanic and the libs in the media are punchin' more holes in the hull to make her sink quicker!!! proceed libs, proceed!!

 

oh interesting, the loony libs called obama's "style" during the debate 'aggressive', translation: he was more of the angry hateful rancid commie liberal douchbag that was expected in the last debate, does it surprise you that this kind of bullshiiit is what libs think is "winning!!"  easy to translate liberal desperation ain't it? hehe

Oct 17, 2012 1:55PM
avatar
Whoo-Hoo! Let the name-calling, venom-spewing and hate- mongering begin!
Oct 17, 2012 3:14PM
avatar

This is one of those days when one stock  makes the market look worse than it actually is.

 

This reminds me of the debate last night, Obama's bull**** speech makes him look better than he really is!! He couldn't answer any of the questions like he was supposed to. He was asked about drilling on government lands and he avoided it. He was asked why gas prices are so high and he avoided that. He was asked if there were requests for help in Lybia and he avoided that. There are a lot of things that he has avoided the last 4 years, including the American people. I sure hope the American people saw what is leading our country last night and make the right decision on November 6. I can't get over how the media is fudging the numbers trying to make this dumb@@@ look good, we have suffered for 3 years and 9 months and then all of a sudden everything is looking great. Come on people you really think we are that dumb? I guess you do because our fine leader thinks so too. Guess what, we're not and we will show you in 19 days!!!

Oct 17, 2012 2:34PM
avatar
TWIT acts dumb, but it's just a disguise. He's actually a complete moron
Oct 17, 2012 3:18PM
avatar
A neighbor breaks into your house. He rapes and beats your wife. He threatens to kill your kids.

Is this an "Act of Terror", or a "Terrorist Act"?

Obama's play on words isn't fooling anybody, Republican, or Democrat! 

The difference is that the Democrats are more than willing to lie right along with him!

And the fact that the arrogant buffoon finds being called out, "Offensive", doesn't make it any less justified........
Oct 17, 2012 3:28PM
avatar
Emptyhead said;
"I love it Romney's his a five point plan but can't tells us the details."

Ya, right. Governor, in two minutes, will you give us the "details" of your plan.

As opposed to FOUR YEARS of absolute bullchit, and "you'll have to pass it, so you can see what's in it."  And lest I forget; "I have no idea what happened to the guns, but how's my hair?"
Oct 17, 2012 2:46PM
avatar
Twit said;
"Kite,
I have always pictured you as Howdy Doody........lol"

Anther AWESOME one liner! LMMFAO!!!!!!!!
Honestly though, I've never wasted the time "picturing" you at all, on account of the fact that I couldn't really care less what you look like, or think, for that matter.
Oct 17, 2012 3:30PM
avatar
CNN's Candy Crowley admits Mitt Romney 'was right in the main' when he called out President Obama's claim that he immediately called the deadly attack on the Libyan consulate a terrorist act — though she first agreed with Obama and cut short Romney's response.

What a douche bag
Oct 17, 2012 4:17PM
avatar
Obama went into the White House Rose Garden the day after the Americans died and told reporters, "No acts of terror will ever shake the resolve of this great nation,

and for the next two weeks told us that it was a YouTube video that caused the attack.
Went on Letterman and repeated it HIMSELF.

Gave a speech at the UN and repeated it  SIX TIMES.

I guess it depends on what the meaning of "is" is, huh, libtards? Face it, your guy is a fricken LIAR.

Now, spin it.
Oct 17, 2012 2:28PM
avatar
this is what I think said;
"1st Debate
Mitt won perceived better on Style.....no substance, but style won the day...
President Obama won Substance.
2nd Debate
President Won Style and Substance
Mitt came across as the angry White Guy....the Boss You Hate,.lol.....very unlikable, rude, impatient, bully,  spewed lies and distortions, no substance...no answers...."

Just change your screen name to; "Clearly I don't Think"
Oct 17, 2012 2:38PM
avatar
twit said;
"I would bet your Avatar does you justice.."

It definitely does justice to my opinion of Obama.
Got any more of those EPIC displays of wit, or should I say Twit??? LMAO!
Oct 17, 2012 1:59PM
avatar
"This is one of those days when one stock -- IBM () -- makes things the market look worse than it actually is. "

Really, worst than it actually is, Charlie you are way out of touch!!!! I hope you're enjoying your fantasy. 
Oct 17, 2012 3:44PM
avatar

Outsourcing is at the root of the unemployment issue. Romney's talk of cracking down on communist China's trade practices with tariffs is encouraging. Obama said similar things in 2008, though he did very little. But it's not just China, Romney would have to challenge. It's Wall Street and Apple, Caterpillar, and on and on. Given his background, I don't have much faith he'll do much either. Though I hope Apple is slapped with a large tariff on all their Chinese electronic junk.  

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