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)










 

524Comments
Oct 22, 2012 6:23PM
avatar
The eye in the SKY watched the attack in real time on the LYBIAN CONSULATE AND SAFE HOUSE  AND DID NOTHING !   
A counter team could have been launched from ITALY and on-site in an hour

THE CHICKEN IN CHEIF DID NOTHING,    

time to go to VEGAS AND GET THEM VOTES     

it would be funny          if it was not so DEADLY
Oct 22, 2012 6:06PM
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Lol. 11/1 should be a very interesting day for the markets.  Diapers recommended.
Oct 22, 2012 6:02PM
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Mr. twit     why will you not address my previous question of your service in NAM?

                 boa lua ban co cho ?
Oct 22, 2012 5:59PM
avatar
Greybeard said:  Yes, but you have repeated this post and injected some of your own comments over and over all day long regarding a complete non-issue (as in having no relationship whatsover to the presidential race).  Why?

Because Mitt is a NeoCon and will gladly send young  MEN and WOMEN to DIE..That's a Huge issue!!!!!  ..His foreign policy staff is 75% of the George W. Bush administration...and are NEOCONS......They are WAR MONGERS, like Bolton, feeding the Military Industrial Complex Billions......Mitt's  family and himself have no history of WAR and the consequences.....Just like George W.Bush and Dick Cheney....who never served. ...Cheney made millions while in office from Halliburton.!  Got a bonus!!  while he was in office ! and no telling how much he received after his term was up for all the YEARS of NO BID CONTRACTS.....

Barack Obama has proved War for him is a last option....He values American lives...He also has proved he is Smart on Strategy...avoiding American deaths while doing signaficant damage to the enemy......Lybia was taken with NO AMERICAN LIVES and with ALLIES ON BOARD... Al queada leadership has been decimated using Drones......If President Obama would have been President instead of George W. Bush, we would have NEVER went to war with IRAQ losing thousands of American lives and putting this country deep in Debt... He was against the WAR in IRAQ but wanted to get Bin Laden.....If President Obama would have been in office I am also sure we would have not spent much time in Afghanistan either.....It would be have been a different mission.....Mitt Romney runs off at the mouth saying he wants to spend TRILLIONS more on our Military that the Military don't even want.....Mitt Romney runs his mouth saying that he wants the WHOLE WORLD so SCARED of the U.S.A.  they won't TEST US.....HE is a FOOL and surrounds himself with War Mongers.......If you have kids and care about MItt using the YOUTH of the country  for his entertainment and profit, like plastic board pieces in a game,  this is a BIG F@CKING DEAL


Oct 22, 2012 5:53PM
avatar

The pessimist complains about the wind; the optimist expects  it to change;

 the realist adjust the sales,  Quote.......William Arthur Ward.  

Oct 22, 2012 5:48PM
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No to SpinParrots said;
"Why are the same people posting over and over?"

Because Right, or Wrong, Agree or Disagree, we all care about our country! If you don't, then get out.
Oct 22, 2012 5:45PM
avatar

"We NEED to take the country back from deadbeats and parasites - both the legal and illegial kind.

A parasite is a parasite and they come in all colors, shapes and creeds."

 

If you're talking about Wall Street, I'm with you.

Oct 22, 2012 5:43PM
avatar

              YOU CAN FOOL SOME OF THE PEOPLE ALL OF THE TIME.

 

         ALL OF THE PEOPLE SOME OF THE TIME.

 

          BUT YOU CAN'T BE A CIRCLE OF LIES PRESIDENT.

Oct 22, 2012 5:30PM
avatar

Why are the same people posting over and over?

Oct 22, 2012 5:25PM
avatar
Dang, there I go again....OSAMA not Obama....geez
Oct 22, 2012 5:17PM
avatar

Concerning the article above: this liberal distributor (MicroSoft-MSN Money) of financial news is gasping for air. Interesting that the talking-heads keep attempting to put a 'positive spin' on our current economic malaise and [in other reports], our pathetic international diplomacy status; to name just a couple of areas.

 

I trust Caterpillar has a grasp of  'world' conditions and I too believe heavy equipment and "build-out" will go stagnant for a bit. Pay no attention to crude oil and gold, as everyone knows these are very volitile indicators and, like food prices, should be disregarded in the computation of cost of living and inflation figures.

I wonder what the 'numbers' will tell us 'what to do' after tonight's debate? The present administration ( VP BIDEN ), threw our intelligence community under the bus!! But they got Obama....what a laugh!!!!!!        

Oct 22, 2012 5:14PM
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You have to be kidding, stocks storms back from losses??? For whos benefit was this story..People get a grip, read about "smart money vs dumb money"(hint..google it) I realize I should not have to explain this BUT, people, we are all lemmings.( you can look that one up to.) I wish I could say that the glass is half full, but that analogy is also for lemmings. Sign of the times, keep the masses occupied and they won't bother asking questions. (simplistic I agree, but this is what you people want.)
Oct 22, 2012 5:12PM
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Money      Big Bird will never see it coming        nor will OBAMA
Oct 22, 2012 5:11PM
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What happened this afternoon on Wall Street that got so many scumbags all peed off? Well, something that we haven't seen in about a year. A comeback after being down triple digits....At about 1505 hrs or thereabouts we had buyers starting to do what they do best, foreign and domestic...These manipulators didn't know what hit them....Nice comeback but remember, we ended up 2 points and the S&P not even a point so, nothing to write home about...There were no reasons or justifications at all for this market to drop triple digits after the bs that took place on friday...Oh well, we will see what happens tomorrow...Remember, these cheating crooks will never ever just give up.
Oct 22, 2012 5:00PM
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"No one told us it was a Terrorist attack! Our Intel told us it was a protest to a video"

"We'll know when Iran is close to having a weapon!" (Our Intel will provide reliable information)

Anybody see any reason to be concerned with this?
Oct 22, 2012 4:50PM
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Nasdaq up 11.34    LOL     that is with the fed pumping in $ 1,334,000,000.00 on a daily basis ?
Oct 22, 2012 4:46PM
avatar

My sister-in-law in Delaware(Democrat) called the other day and said she is extremely happy the V.P. debates are done with,because she and all her democrat friends CRINGE every time Biden opens his mouth even when he laughs.But they are proud of his nice teeth.

Oct 22, 2012 4:42PM
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The market went from -108 to +2,a 110 point swing because "buying set in." Who was doing all this "buying" and what the *)^# did they buy ????
Oct 22, 2012 4:36PM
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Looks like the cretins are in full force again today.  I think they are a little nervous for the debate.  I think obama is going down in flames.  The Libya scandal will kill him.  Van Jones today said obama was a "towering figure on foreign policy” — someone who has both a Nobel Peace Prize and took out Osama bin Laden.  What did he get the PEACE prize for KILLING bin Laden.  The ignorance of some...
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