Weak earnings keep stocks in check

Updated: 7:15 p.m. ET

Don't blame Ford Motor (F) or Coach (COH), IBM (IBM) or even Bank of America (BAC) for a stock market that spent most of the day running in place.

The foursome were higher today -- spectacularly so in the case of Coach.

The problem was that higher raw-material costs and a weak economy combined to produce disappointing earnings from U.S. Steel (X), engine-maker Cummins (CMI) and Kimberly-Clark (KMB). A disappointing (but not awful) report on home prices offset a surprising gain in consumer confidence.

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Lastly, the dollar was higher today, which hit big exporters like Boeing (BA) and Caterpillar (CAT), not to mention gold and crude oil. Both ended the day little changed.

The net of all this churn? Very small gains for the market. The Dow Jones industrials ($INDU) closed up 5 points to 11,169. The Standard & Poor's 500 Index ($INX) was up -- barely -- at 1,866. The Nasdaq Composite Index ($COMPX) added 6 points to 2,497.

When we say the S&P 500 closed barely higher, we're not kidding. It was up two one-hundredths of a point. So, why bother to point it out? It was the fifth straight gain for the index and its longest winning streak since mid-July.

Crude oil settled up 3 cents to $82.44 a barrel. Gold settled down 30 cents to $1,338.60 an ounce. Interest rates were up slightly, with the 10-year Treasury yield hitting 2.636%, up from 2.554% on Monday.

The U.S. Dollar Index settled up 0.8% to 77.91, with the greenback gaining against the euro, the Japanese yen and the Canadian dollar.

Futures trading suggests the market will open modestly higher on Wednesday.

The market got a big boost when chip maker Broadcom (BRCM) easily beat analyst estimates on third-quarter earnings and boosted guidance for the fourth quarter. Shares jumped 10.8% to $41.35 after hours.

Broadcom's chips are used in devices made by Hewlett-Packard (HPQ), Apple (AAPL), Dell (DELL) and others.

Earnings reports due Wednesday include ConocoPhillips (COP), Allstate (ALL), Procter & Gamble (PG) and Whirlpool (WHR).

Microsoft  leads the Dow
Microsoft (MSFT) was the leader among the 30 Dow stocks, up 2.8% to $25.90 in anticipation of a decent earnings report on Thursday, followed by American Express (AXP), up 2% to $40.10, and Walt Disney (DIS), up 1.4% to $35.96. (Microsoft publishes MSN Money.) 

Fifty-four Nasdaq-100 ($NDX.X) stocks were higher, led by Garmin (GRMN), up 6.1% to $34, and Research In Motion (RIMM), up 5.9% to $54.76.

The index was up 6 points to 2,119.

Ford's strong third quarter
Ford earned $2.1 billion, or 48 cents a share, after one-time charges, up from $1 billion, or 26 cents a share, a year ago.  Revenue was off slightly.

Shares were up 1.5% to $14.36.

The results were strong enough that Ford paid down $2 billion in debt in September and planned to pay its remaining obligation to the United Automobile Workers union’s retiree health care trust -- $3.6 billion -- on Friday, in cash.

Ford had not been required to satisfy its debt to the union trust until 2022.

It sees solid profitability in 2011, powered by growth in its North American business.

Energy prices -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Crude oil			$82.55			$82.52			3.23%			4.02%
(per barrel)
Heating oil			$2.2500			$2.2550			-7.79%			6.35%
(per gallon)
Natural gas			$3.3540			$3.3170			-13.38%			-39.81%
(per mil. BTU)
Unleaded gasoline			$2.0940			$2.0773			2.41%			2.00%
(per gallon)
Retail gasoline			$2.8100			$2.8130			4.50%			6.48%
(per gallon; AAA)

Takeover talk moves some stocks
There was a lot of takeover noise today. It started out with speculation that Apple might acquire Sony (SNE). That sent Sony shares up 3% in Tokyo before they fell back. Sony shares finished up 1% to $33.91 in New York.

There was also talk that Apple might be interested in Netflix (NFLX). That seemed to excite Wall Street more. Netflix was up 6.5% to $177.62.

Add to that speculation from London that banking giant HSBC (HBC) might bid $65 a share for Northern Trust (NTRS). The latter, a Chicago bank, was up 5.3% to $50.57. Volume was 6.6 million shares, 3.6 times their 13-week average 

Shares of the asset manager have struggled this year, and Rochdale Securities analyst Dick Bove thinks a merger with HSBC "would be close to perfect."

HSBC is "more likely to attract the investment funds of the new Asian billionaires than any other company in the world, one might imagine," Bove wrote today. "Northern Trust has proven itself to be the best bank in the world to service the needs of billionaires."

Stocks seeing big moves, good and bad

• Coach, up 11.9% to $49.78. The leather-goods retailer earned 63 cents a share in its fiscal first quarter, up 43% from a year ago and better than Street estimates of 55 cents. Revenue jumped 19.7% to $911.7 million. The company sees a big holiday season.
• Bristol-Myers Squibb (BMY), down 1.1% to $26.86. While third-quarter earnings of 59 cents a share beat estimates, guidance for the fourth quarter -- $2.10 to $2.20 a share -- was only in line with the Reuters consensus estimate of $2.13.
• Kimberly-Clark, down 5.8% to $62.61. The maker of Huggies diapers and Kleenex tissues said third-quarter earnings fell 19% on higher costs for materials. Adjusted earnings were $1.14 a share; below the $1.28-a-share estimate. Revenue of $4.98 billion was just shy of the estimate of $4.99 billion. The company cut its earnings forecast to $4.60 to $4.70 a share from $4.80 to $5.
• U.S. Steel, down 3.4% to $40.85. The steel maker lost 35 cents a share in the third quarter, compared with the consensus estimate of 23 cents a share in earnings. Shipments were lower as the economy slowed, the company said. It sees more of the same in the fourth quarter.
• Lexmark International (LXK), down 21% to $37.71. Third-quarter revenue missed Street estimates, and its fourth-quarter forecast was tepid. CEO Paul Curlander is retiring. Several analysts said the company is losing market share to Hewlett-Packard (HPQ).
• Royal Caribbean (RCL) and Carnival (CCL), up 14.5% to $40.23 and 6.4% to $43.08, respectively. Royal Caribbean raised its 2010 earnings forecast and predicted record earnings in 2011. 
  

Disappointing home-price report; rising confidence
Home prices in 20 markets drifted lower in August from July, the Standard & Poor's /Case-Shiller Index showed. The numbers were disappointing to S&P's chief economist but less so to others.

Prices had shown signs of stabilizing in the 20 markets and were in fact higher than a year ago. But prices slipped in 19 of the 20 markets, probably a reflection of the expiration of homebuyer tax credits and worries about a softening economy.

The forward prognosis is a bit tricky, many experts believe, because the glut of foreclosures in many markets is so huge. The biggest problems appear still to be Phoenix and Las Vegas. 

But consumer confidence moved higher in September, The Conference Board said. The big reason appears to be the stock market, up more than 11% since the Dow closed at 9,986 on Aug. 26. That suggests consumers think the economy will improve in the next six to nine months.

But huge worries about job stability remain.

Short hits from the markets -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.130%			0.120%			-13.33%			160.00%
5-year Treasury note			1.247%			1.173%			-3.63%			-53.57%
10-year Treasury note			2.636%			2.554%			4.44%			-31.41%
30-year Treasury bond			3.727%			3.727%			0.81%			-19.69%
Currencies
U.S. Dollar Index			77.91			77.303			-1.30%			-0.40%
British pound			$1.5840			$1.5733			0.76%			-2.08%
(in U.S. $)
U.S. $ in pounds			£0.6313			£0.6356			-0.75%			2.12%
Euro in dollars			$1.3877			$1.3959			1.60%			-3.18%
(in U.S. $)
U.S. $ in euros			€ 0.7206			€ 0.7164			-1.57%			3.28%
U.S. $ in yen			81.50			80.77			-2.61%			-12.37%
U.S. $ in Chinese			6.69			6.65			-0.48%			-2.05%
yuan
Canada dollar			$0.976			$0.981			0.44%			2.65%
(in U.S. $)
U.S. dollar			$1.025			$1.019			-0.44%			-2.58%
(in Canadian $)
Commodities
Gold			$1,338.60			$1,338.90			2.21%			22.11%
(per troy ounce)
Copper			$3.8690			$3.8630			5.96%			15.61%
(per pound)
Silver			$23.8300			$23.5440			9.21%			41.47%
(per troy ounce)
Wheat			$6.9200			$6.7400			2.67%			27.79%
(per bushel)
Corn			$5.7100			$5.6875			15.18%			37.76%
(per bushel)
Crude oil			$82.55			$82.52			3.23%			4.02%
(per barrel)