Stocks storm back from sharp losses

The Dow ends up 2 points after briefly falling as many as 108 points. Caterpillar sees the world economy slowing faster than expected. Apple leads tech stocks higher. Freeport-McMoRan Copper & Gold misses Street estimates.

By Charley Blaine Oct 22, 2012 12:42PM
Charley BlaineUpdated: 8 p.m. ET

Stocks rebounded completely from sharp midafternoon declines today after construction-equipment-maker Caterpillar (CAT) cut its outlook for the second time this year, warning the global economy was slowing faster than it had expected.

The Dow Jones Industrial Average ($INDU) was briefly down as many as 108 points before new buying set in -- and then accelerated. The index had been held back by weakness in General Electric (GE), MSN Money publisher Microsoft (MSFT) and JPMorgan Chase (JPM).

Technology shares, however, were mostly higher, led by Apple (AAPL), which is expected to unveil a new mini-iPad on Tuesday. The company also reports fiscal-fourth-quarter results after Thursday's close.

Yahoo
(YHOO) shares were up 73 cents, or 4.6%, to $16.50 after hours. New CEO Marissa Mayer cheered analysts by saying she wants the company to have a coherent mobile advertising strategy. Plus, she wants to focus the company around "daily habits" of
users such as email, the home page, Internet search and mobile devices."

The Dow closed up 2 points to 13,346. The Standard & Poor's 500 Index ($INX) was up 1 point to 1,434, while the Nasdaq Composite Index ($COMPX) moved up 11 points to 3,017. The Nasdaq-100 Index ($NDX) gained 16 points to 2,695. Apple, the biggest influence on the index, was up $24.19 to $634.03.

Article continues below.
The trigger for the rebound appears to have been technical. The Dow and S&P 500 both fell  below their simple 50-day moving averages and promptly bounced higher, probably because computerized trades automatically kicked in. The 50-day moving average is a key measure of investor confidence.

Likewise, Apple bounced higher after dropping to $610.76, very near its 150-day moving average.

Apple and Yahoo may give the market a boost on Tuesday. In addition to an Apple media event, the market will deal with pre-market earnings reports from DuPont (DD), United Parcel Service (UPS), United Technologies (UTX) and appliance-maker Whirlpool (WHR). After the close, Facebook (FB) and Norfolk Southern (NSC) will report third-quarter results.

Futures trading suggests the market will open higher.

Yahoo's Mayer cheers the Street
Yahoo reported earnings of 35 cents a share in the third quarter on an adjusted basis, up from 21 cents a year ago and 10 cents better than expected. Revenue less payments to partners was up 2% to $1.09 billion.

These results excluded a $2.8 billion gain related to the sale of Alibaba Group shares.

Mayer said Yahoo would work more closely with software provider and Web search partner Microsoft, while employing technology to shore up its display ads business through such features as automated buying.

She added that Yahoo is likely to begin withdrawing from international businesses that fail to grow. This month, executives said the company will pull out of South Korea, a market full of local rivals. And she said that the company would primarily focus on "smaller-scale" deals to bolster Yahoo's products. That relieved some investors who feared the company could embark on an expensive shopping spree, Reuters said.

In regular trading, Yahoo finished down slightly to $15.77.

Texas Instruments struggles with slowing demand
Texas Instruments
(TXN) shares were down 0.4% to $27.67 after hours. The chip maker said quarterly revenue fell as demand for its chips slipped on economic concerns. The company forecast more weakness in the fourth quarter.

"Across the board, we're seeing customers being extremely cautious, very careful about the level of inventory that they hold so giving us very low levels of visibility as to what they'll want to order for the quarter," TI CFO Kevin March told Reuters.

TI's chips are used in mobile devices, consumer electronics and industrial equipment. TI earned $784 million, or 67 cents a share, up from $601 million, or 51 cents, a year ago. Revenue fell to $3.39 billion from $3.47 billion.

TI forecast fourth-quarter earnings of 23 to 31 cents a share on revenue of $2.83 billion to $3.07 billion. Analysts had expected revenue of $3.24 billion, Reuters said.

Global fears weigh on markets
The market struggled all day because of global economic worries. In addition, investors were awaiting tonight's debate between President Barack Obama and former Massachusetts Gov. Mitt Romney. Crude oil in New York (-CL) fell below $89 a barrel in New York, but gold (-GC) was up slightly.

Thanks to the rebound in the last half-hour of trading, the major averages avoided a third straight day of declines. The market slumped on Friday, with the Dow off 205 points, its biggest one-day loss since June.

General Electric was down 33 cents to $21.70. Microsoft was off 64 cents to $28 as investors fretted about the sales of software in its Windows division, which fell in the fiscal fourth quarter, Reuters said. In addition, Barron's wondered about the company's prospects in the post-personal-computer world. (Registration may be required.)

Peter Kenny, a managing director at Knight Capital, told Reuters that investors are hesitant to make any bets until after the U.S. presidential election on Nov. 6. In addition, worries about the eurozone are a big concern.


"Once we have some clarity on the political front, I think people are going to be more than willing to put some bets on the table," he said.


Energy prices -- New York close



Mon.     Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$88.65

$90.44

-3.84%

-10.30%
(per barrel)











Heating oil (-HO)

$3.0668

$3.1176

-2.92%

5.24%
(per gallon)











Natural gas (-NG)

$3.4520

$3.6170

3.98%

15.49%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6348

$2.6721

-9.77%

-0.85%
(per gallon)











Brent crude 

$109.85

$110.14

-0.26%

2.30%
(per barrel)











Retail gasoline

$3.6650

$3.6760

-3.22%

11.87%
(per gallon; AAA)












Oil moves lower; gold rebounds

Crude oil settled down 84 cents to $89.60 a barrel in New York. Brent crude was down 29 cents to $1.09.85 a barrel. Gold was up $2.60 to $1,726.60 an ounce.


The national average price of gasoline was $3.665 a gallon, down from $3.676 on Sunday, according to AAA's Daily Fuel Gauge Report.


The 10-year Treasury yield was up slightly to 1.799% from Friday's 1.768%.

The dollar was lower against the euro in part because a regional election in Spain was seen as helping the country clear a hurdle for international aid to ease the eurozone debt crisis.

Caterpillar's guidance is a worry
Caterpillar reported better-than-expected third-quarter profit on a rebound in U.S. sales of heavy equipment. But the company offered a disappointing outlook.

The company doesn't expect to see overall economic growth until the second half of 2013. The U.S. economy should grow 2% next year (admittedly, an anemic rate), with construction producing much of the gains, the company said. It sees economic weakness across Europe. China should grow 8.5%, and Latin America will grow 4%.

The outlook was similar to what General Electric offered when it reported results on Friday.

For the third quarter, Caterpillar earned $1.7 billion, or $2.54 a share, up from $1.14 billion, or $1.71 per share, a year ago. Revenue rose 5% to $16.45 billion. Analysts had been looking for $16.77 billion. Excluding one-time charges, the company earned $2.26 a share, ahead of the consensus analyst estimate of $2.22.

For 2012, the company expects to earn $9 to $9.25 a share on sales of $66 billion. It had earlier projected $9.60 per share. The Street estimate was $9.40 with revenue of $67.64 billion.

Freeport-McMoRan, SunTrust slide on earnings misses
Freeport-McMoRan Copper & Gold (FCX), the world’s biggest publicly traded copper producer, was down 60 cents to $40.58, and SunTrust Banks (STI) fell 96 cents to $27.67 after reporting earnings that missed analysts’ estimates.

Freeport's miss was its first in 17 quarters. The company cited higher costs and lower gold sales. CEO Richard Adkerson was a bit skeptical in a CNBC interview about whether Chinese demand will ramp up any time soon.

Peabody Energy (BTU), the largest U.S. coal producer, increased $3.06 to $28.95 after earnings beat analysts’ projections. The stock was the top performer in the S&P 500.

Ancestry.com (ACOM) surged $2.26 to $31.44, after Permira Advisers agreed to buy the company in a deal valued at about $1.6 billion.

Hasbro's (HAS) third-quarter net profit fell 3.6% as strong sales for My Little Pony and Marvel-related gear couldn't fully offset declines for Transformers, Beyblade and preschool gear. Still, the result beat Wall Street estimates, and Hasbro closed down 66 cents to $38.39.

Pfizer (PFE) agreed to acquire privately held NextWave Pharmaceuticals, a deal that includes the recently approved Quillivant XR — the first once-daily liquid treatment for attention deficit hyperactivity disorder. The deal is worth as much as $700 million. Pfizer was down 16 cents to $25.60.

Russian energy giant Rosneft reached separate agreements to buy the entirety of oil venture TNK-BP from BP (BP) and a group of Soviet-born billionaires, an acquisition that promises to reshape the Russian oil industry. The deal is worth some $61 billion. BP was off 45 cents to $42.65 in New York.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.100%

0.00%

800.00%
5-year Treasury note 

0.779%

0.751%

23.65%

-6.14%
10-year Treasury note

1.798%

1.768%

9.84%

-3.90%
30-year Treasury bond

2.947%

2.937%

-2.80%

2.01%
Currencies











U.S. Dollar Index

79.736

79.688

-0.36%

-0.98%
British pound

1.6010

1.6015

-0.93%

3.04%
(in U.S. $)

 








U.S. $ in pounds

£0.625

£0.624

0.94%

-2.95%
Euro in dollars

$1.31

$1.30

1.58%

0.77%
(in U.S. $)

 








U.S. $ in euros

€ 0.766

€ 0.768

-1.56%

-0.76%
U.S. $ in yen 

80.06

79.28

2.69%

3.84%
U.S. $ in Chinese

6.28

6.25

-0.09%

-0.80%
yuan











Canada dollar

$1.008

$1.006

-0.89%

2.71%
(in U.S. $)

 








U.S. dollar 

$0.993

$0.994

0.97%

-2.64%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,726.30

$1,724.000

-2.68%

10.18%
(per troy ounce)

 








Copper (-HG)

$3.622

$3.638

-3.62%

5.41%
(per pound)

 








Silver (-SI)

$32.2520

$32.097

-6.72%

15.54%
(per troy ounce)

 








Wheat (-ZW)

$8.7825

$8.725

-2.69%

34.55%
(per bushel)

 








Corn (-ZC)

$7.6125

$7.615

0.66%

17.75%
(per bushel)

 








Cotton 

$0.7693

$0.769

8.89%

-16.09%
(per pound)

 








Coffee

$1.6450

$1.617

-5.19%

-28.37%
(per pound)

 








Crude oil (-CL)

$88.65

$90.440

-3.84%

-10.30%
(per barrel)










 

542Comments
Oct 22, 2012 7:30PM
avatar
"4 more, 4 more, 4 more, 4 more years.........."

Re-tog, you forgot to add -  " because we can plainly see, how well that is working out for US" !
Oct 22, 2012 7:28PM
avatar

Well, think I'll start "happy hour"...Got a good Ballgame to watch tonight......

 

And I want to be drunk for the debate...So when I puke, I have an excuse.

 

4 more, 4 more, 4 more, 4 more years..........

Oct 22, 2012 7:25PM
avatar
"He has given to Americans what Europeans have  taken for granted for 77 years namely Universal Health Coverage."

Fred, you forgot to add - " because we can plainly see, how well that is working out for them" !
Oct 22, 2012 7:23PM
avatar

Are Patriote and SHTDriver  okay ?? ......Or are they the same guy/gal ??

 

And they got their Meds screwed up ??

A guy doesn't take pictures of other guys does he...?

Oct 22, 2012 7:18PM
avatar
A simple foreign policy question for both candidates...  Do you denounce communism/socialism/marxism in all its forms so help you God?  Bet you one of the candidates in tonights debate can't answer this question truthfully...
Oct 22, 2012 7:16PM
avatar
Freddddddddd, is that you ?? The rhetoric, reminds me of some of your sage remarks.
Oct 22, 2012 7:11PM
avatar
Really you can't trust either of them, they are politicians, bent on winning your vote, without any idea if what they are saying can be done. Romney is a republican; does anyone have a memory? GW and what he put this country through; how about what old man Bush did to this country; interest rates were so high I moved all assetts out of country. I seriously have a problem hiring a person as president that made millions, stashed them offshore, during the worst downturn since the great depression. Do you really want a self-gratifying person like that? Obama has good long-term ideas, without the drive or support. He is the lesser of two evils.
Oct 22, 2012 7:07PM
avatar
I see a lot of ungrateful posts out here. Let me outline what good has been done for America by Mr. Obama.

He is the first President to offer Universal Health Care to all Americans.

He has given to Americans what Europeans have  taken for granted for 77 years namely Universal Health Coverage.

He has brought back Troops from Iraq and is continuing to wind down the war in Afghanistan.

He has rejuvenated the economy. 

The man has rescued USA from the Economic Disaster which George W Bush led us into.

What more can you ask of the President?

Look at the alternative. You have a vulture capitalist who has made millions by exporting your jobs overseas yet you want to bring him into office. Be my guest
Oct 22, 2012 7:06PM
avatar
Looking forward to the Debate......In honor of the SMOKING President Obama is going to give Myth Robme,  I am going to have a few shots of Laphroig 10yr single malt Scotch....while watching the DEBATE..........The Smokiest Scotch that I know of..
Oct 22, 2012 7:00PM
avatar
I am a wonderful person, Crazy...At least I think I am ? And Momma always told me so too.
Oct 22, 2012 6:59PM
avatar
love     but you have a short memory,you forget KUWAIT<SAUDI ARABIA< AND THE KURDS,
if not for the those details i would say let them  kill each other and have their own way.

a tactical error was made with the killing of BIN LADEN,  i hope you can figure that one out.
Biden was correct , they needed to handle the situation in another way,but Barry wanted to spike the ball
and if you cannot figure out the other 2 wars (ARMED) you just don't get it
Oct 22, 2012 6:58PM
avatar

You guys or many would not have any place to go and rant, without Charley...

 

I dunno from a hundred points down to a 2-point gain....Is a STORM..

 

Profit taking and buying opportunities, but get the skinny from CGT...

Oct 22, 2012 6:53PM
avatar

SPIN Parrots....Here's the DEAL guy, some of these MORONS; Like to hear themselves talk,type or read themselves in print...Maybe a power trip? Who knows or cares..?

 

The REST of the IMBECILES and IDIOTS, don't realize they posted the same thing ,an hour ago,a day ago or a week ago.....Just sayin'

 

There's your best answer, and I fixed it for them; Because they will probably lie to you OR call you names.

Oct 22, 2012 6:50PM
avatar
Whoever writes these headlines shoudl get their head examined.  A 2 point gain on the DOW is stocks STORMING BACK, for a > 200 point loss?  Yeah right, it's more like a trickle today from a massive "storm downwards" on Friday...  Who does this guy think he's kidding?  There's nothing massive, great, or impressive about a 2 point gain following a loss around 100 times greater...
Oct 22, 2012 6:50PM
avatar
Stocks came back but there were still major losses today so the losse continue with Wall Street again. They are dead set on taking away the gains!!r
Oct 22, 2012 6:44PM
avatar
Monster Energy Drinks. Maybe the new Dumbocrud cool-ade?
Oct 22, 2012 6:44PM
avatar
Tiwit    you should be proud of your service to our country !  Which A B were you at ?

COME ON TELL US
Oct 22, 2012 6:40PM
avatar
300 comments ?? My oh My, what about....??
Oct 22, 2012 6:39PM
avatar
love       be on my guard?    OOOHHHHH    SCARY, coming from a PACIFIST
Oct 22, 2012 6:38PM
avatar
Total federal state and local gvernment spending as a percentage of GDP was approximately 17% in 1950. Fast forward to 2012 and it's over 35%. The government didn't become much more efficient like private enterprise, but it did get a lot bigger and takes away opportunity by controling our lives more every day.
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