Stocks storm back from sharp losses

Updated: 8 p.m. ET

Stocks rebounded completely from sharp midafternoon declines today after construction-equipme​nt-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-quarte​r 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.

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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-comput​er 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)