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.
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%|
|Heating oil (-HO)||$3.1894||$3.1985||0.96%||9.44%|
|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; 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.|
|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%|
|U.S. Dollar Index||79.059||79.464||-1.21%||-1.82%|
|(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%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$92.12||$92.090||-0.08%||-6.79%|
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."
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.
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
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!!!
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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[BRIEFING.COM] A solid November employment report translated into a solid day of gains for the major averages. While there was some talk that the encouraging job growth raised the odds of the Fed announcing a tapering at its December meeting, the message of the markets today was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month.
It was just one day, yet there was ample meaning wrapped up in the connection that the 10-yr ... More
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