Stocks waver as hopes for European debt plan fade

Details of a plan to solve the region's debt crisis could be delayed. Amazon shares fall on disappointing earnings. Durable goods orders slip. Home sales spike.

By TheStreet Staff Oct 26, 2011 7:31AM

TheStreetImage: Wall Street sign (© Corbis/SuperStock)By Melinda Peer, TheStreet


Updated at 1:01 p.m. ET


Stocks were stuck in mixed territory Wednesday as investors appeared less certain that European leaders will be able to negotiate a definitive plan to address the region's debt crisis by the end of the day’s summit.


The Dow Jones Industrial Average ($INDU) was up 30.9 points, or 0.2%, at 11,737. The S&P 500 ($INX) was losing 1.1 points, or 0.09%, at 1,227, and the Nasdaq ($COMPX) was shedding 20.2 points, or 0.7%, at 2,618.


Initial momentum surrounding the European Union summit fell flat shortly after the German parliament passed legislation to leverage the European bailout fund. According to a Bloomberg report, European Union leaders may ask finance ministers to figure out the capacity of the expanded eurozone emergency rescue fund by the end of November, further delaying details of a plan for the region's sovereign debt crisis. On Tuesday, European Union finance ministers canceled a Wednesday meeting that was scheduled to take place before the summit.


European leaders are still figuring out how big banks' writedowns on Greek debt will be and how the eurozone rescue fund will be expanded. According to a Wall Street Journal report, Greek debt held by private investors would likely be cut by 50% and banks would exchange current bonds for new 30-year bonds carrying a 6% coupon and 15% in cash.


In Europe, London's FTSE rose 0.5% and Germany's DAX lost 0.6%. Overnight, Asian markets saw a mixed close. Japan's Nikkei Average slipped 0.2%, while Hong Kong's Hang Seng added 0.5%.


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The dollar index, a measure of the dollar's value against a basket of currencies, was gaining 0.365%, and the euro was rising 0.48% against the greenback.


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Wednesday’s economic releases were also contributing to the session’s more optimistic tone.  


The U.S. Census Bureau said durable goods orders fell 0.8% in September after a 0.1% decline in August. Economists had expected to see a decline of 1%. Excluding transportation, orders rose 1.7%, outpacing estimates for a 0.5% increase. 


September new-home sales climbed 5.7% to an adjusted annual rate of 313,000 from a revised increase of 296,000 in August. The data topped estimates of an increase to 302,000.


In the latest earnings news, Dow component Boeing (BA) reported a third-quarter profit of $1.46 a share, compared with expectations for earnings of $1.10 a share. The company also hiked its year-end guidance to above consensus estimates. Shares were rising 4.1% to $66.34.

Boeing was trading at the top of the Dow followed by Verizon (VZ) and Caterpillar (CAT).


Tech components Microsoft (MSFT) and Cisco (CSCO) were among the Dow’s biggest laggards.

Ford (F) said quarterly profits slipped on higher commodity prices and financial service weakness. The automaker reported a profit of 41 cents a share on sales of $33.1 billion, compared with the earnings of 44 cents a share on revenue of $29.9 billion that Wall Street had projected. The stock was shedding 6.8% to $11.58.

Shares of (AMZN) were falling 11.3% to $201.45 after the company reported lackluster earnings Tuesday. The online retail giant missed estimates by 10 cents with earnings of $63 million, or 14 cents a share, on sales of $10.9 billion. The company also said it would likely report an operating loss of $200 million for the fourth quarter.


Sprint (S) posted a smaller-than-expected third-quarter loss of 10 cents a share on revenue of $8.3 billion. Analysts had been forecasting a loss of 22 cents a share on sales of $8.4 billion. The stock was losing 10.1% to $2.42.


Wellpoint (WLP), the largest health insurer based on membership, exceeded analysts’ profit expectations by 9 cents with earnings of $1.77 a share. The company also said it added 169,000 members in the quarter. Shares were rising 2% to $68.34.


Chip maker Broadcom (BRCM) disappointed Wall Street with a weak fourth-quarter outlook late Tuesday, sending shares down 3.7% at $34.46.


In other news, former director of Goldman Sachs (GS) Rajat Gupta is expected to surrender to the Federal Bureau of Investigation on Wednesday on criminal charges of leading inside information to Galleon Group hedge fund founder Raj Rajaratnam, according to a Wall Street Journal report.


The benchmark 10-year Treasury was losing 9/32, lifting the yield to 2.146%.

Gold for December delivery was gaining $15.40 at $1,715.80 an ounce and the December crude oil contract was shedding $1.68 at $91.49 a barrel.

Oct 26, 2011 9:09AM
Oil still climbing for no reason.  Oil speculation, a new form of home-grown terrorism and hostage taking.
Oct 26, 2011 9:31AM
STAGFLATION, OVER VALUE, MANIPULATION, the list could go on and on folks. No where else for the market to hide. The FED is in bed with the powers that govern. Most of us here in the USA are treading on very thin ICE.  The majority of us are two pay checks away from the street. Never stops amazing me the spin and hype on the markets. Unemployment needs to be a priority for corporations, instead of profits for share holders.  Bring back jobs then the housing market will get back some of it's value. Our nation needs another Henry Ford. He understood that if WE COULD buy his products. He COULD grow his business.
Oct 26, 2011 9:31AM
What difference does the price of Oil make anyway?  It is not like they price gasoline accordingly...  They want us to accept that $4.00 a gallon gas is the "new norm".  That it is a "good thing".  That is why when the price of oil went down, us peons at the pumps only saw a 15-20% decrease in the price instead of the 35-40% that it should have been.
Oct 26, 2011 8:26AM
Many poor families will be cold and hungry this winter thanks to the scumbag speculators and traders on Wall Street. We gain over 2.5 million barrels of inventories and they are still bringing it up. There are no fundamentals to support these prices other then Greed. I will cut back on spending and I hope others will also. Our useless Government will do nothing to these people as they raise prices whenever they feel like it. Their day of reckoning is coming!
Oct 26, 2011 9:07AM

Swags - Be honest here..... There's no middle ground anymore. Your either making profits or mooching off the folks making profits. Your either a wealth creator or a drag on the wealth creators. Be honest... this is the new American philosophy


You are correct Stric, the imbalance does appear to be getting worse.  But that's all the more reason to demand the rule of law be restored!  Why should those with ample fiscal wealth have a different set of rules to play by?  This only added to the division, and makes the gap larger.


And MG, Greed..... the greed I'm talkin about, is the illegal, immoral, back room dealing side of commerce that skews everything for the rest of us having to play by the rules.  If we made ALL of us, from the moochers to the uber wealthy, use the same set of rules and prosecuted violators the same, we would start to see the health of the economy return.

Oct 26, 2011 9:06AM

Oil prices continue to climb, and the Yen hit a new high against the US Dollar (as it continues to sink in value) BECAUSE people are now EXPECTING the FED to begin a massive new version of QE III.  This constant debasing of the currency of course causes pricies of everything to move higher.   Stocks, Oil, Specie, foreign currencies, etc.  


You cannot TAX, SPEND, BORROW or DEBASE your way to Prosperity, no matter what '57 States' and his donkey party minions say...


If you print 15% more money under a QE III program, why would you not expect prices to rise 15%?   Prices adjust upwards for INFLATION period.  It may take time, but the adjustment happens.   Inflation rewards people in DEBT and punishes savers trapped in dollar denominated investments (like bank deposits and cash).  



Oct 26, 2011 10:55AM

I just called our supplier for furnace oil.....The last thing they said (chuckling) before they hung up was "bend over", we will be out tomorrow at 9.


3.59 per.....last year same date...2.59.....We really should start using wood again !!

Oct 26, 2011 8:20AM

What a joke!  Analysis is frikkin' stunning AND GREEN


today we run the "Optimism" headline and tomorrow we run the "Europe Worries" headline

then repeat.


brilliant recycling

Oct 26, 2011 10:34AM

Stocks rise on Europe debt plan....


How many times will this Europe debt crap rise/lower the markets?  This is rediculous!  It is like an everlasting joke, we rise: "Europe debt is not so bad", a day later it falls: "Oh wait it is worse than we thought", the next day it rises: "We got it figured out", only for it to fall again the next day.......


You ignorant "economists" do realize these are peoples retirements and income you are "playing" with here!  The weatherman is better at predicting than you idiots!!!

Oct 26, 2011 10:37AM

Just a visitor:  Our leaders are guilty of "aiding and abetting" these thieves!


Odd how Congressional members portfolios outperform "regular" portfolios 3:1.  Can anyone say "insider trading"...........

Oct 26, 2011 9:48AM

for the last 3 months the morning market dispatch reads stocks move higher on euro debt plan or


Oct 26, 2011 8:50AM



Fraud, hand picking winners and losers, and the refusal to enforce the rule of law is NOT CAPITALISM.


Capitalism gone bad, maybe, but should not be blamed on people's desire to have an opportunity to make something of themselves. 

Oct 26, 2011 11:21AM
Today's market summary:
Europe doesn't know.  Someone thought they did, but then changed their mind.
The US doesn't know. Someone thought they did, but then changed their mind.
The Chinese might know, but no one knows what they know.
The rest of the world is watching the first three because they really don't know.

Have a wonderful day, be careful out there and we'll see you on the other side.

Sidebar: No individual investor stands a chance in today's electronic trading market. Buys and sells are done in nanoseconds for ups and downs of hundredths of a cent. By the time a typical investor sees it it's over.

Oct 26, 2011 9:38AM
  That is why when the price of oil went down, us peons at the pumps only saw a 15-20% decrease in the price instead of the 35-40% that it should have been.

But, but they need that money to pay all those corporate taxes and create jobs and such. If you were allowed to keep it you'd just waste it on useless stuff like food and clothing....

Oct 26, 2011 9:41AM



I have  always said we need more prosecutors.  Regulators fail all the time  (Enron, Madoff, BP oil spills, etc) to prevent such failures.  But we need to send these guys to long jail terms.


Illegal backroom deals like Solandra and the Finnish car company should be investigated and the people responsible JAILED.  I mean really, spending Stimulus  money to build cars in Finland?   Spending Stimulus  money to buy guns to smuggle into Mexico to give them to drug lords?  


Enron was looted for 7 billion over 8 years!  Thats 7,000,000,000 stolen.   Rob a local bank for 40,000 and you will get 20 years+.  


Invest in PROSECUTORS, by all means!!!   And END TBTF!!!

Oct 26, 2011 8:32AM

I will cut back on spending and I hope others will also.


The above..... and our refusal to take on ANY new debt, is truly our only real option at this point.


If GREED is all that matters to them, then we must hit them where it hurts.

Oct 26, 2011 9:58AM
Stocks rise on hopes

I remember when stocks use to rise because of growth and innovation, now it's hope. Maybe we can sell hope credits instead of carbon credits.

Oct 26, 2011 10:31AM


        If you do not think that higher oil prices will not force us once again to cut back on spending, then you better think again. As far as calling people idiots, maybe you ought to look in the mirror first.

Oct 26, 2011 9:28AM
debasing will only accelerate the decline of, yeah, lets just stick the knife in (raising oil prices) a deeper into the pockets of the already broke middle class
Oct 26, 2011 9:56AM
stocks are up because yesturday they were way down.  like a roulette table, "it's time to bet #16"
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[BRIEFING.COM] Precious metals are trading lower this morning. Dec gold brushed a session low of $1212.50 in recent action and is now down 0.2% at $1214.60. Dec silver traded as low as $12.57 but has been inching higher in recent trade. It is currently at $17.71, or 0.8% lower.

Nov crude oil pulled back from its session high of $91.82 set at pit trade open and is slipping deeper into negative territory. It touched a LoD of $90.77 and is currently down 0.9% at $90.86.

Oct natural ... More


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