Stocks end little changed; Cisco earnings cheer

The networking giant's shares jump after hours. The Dow ends with a tiny loss. The market is helped by Target and Abercrombie & Fitch results. Staples and Deere shares slump on weak outlooks. Homebuilder confidence improves.

By Charley Blaine Aug 15, 2012 12:42PM
Charley BlaineUpdated: 8:31 p.m. ET

Stocks finished little changed today while trading in one of the narrowest ranges in five years. The  Dow Jones industrials ($INDU) finished with a tiny loss. The Standard & Poor's 500 Index ($INX) showed an equally tiny gain.

But crude oil (-CL) closed above $94 a barrel for the first time since mid-May, as energy prices continued their surge since the end of June. Crude is up more than 20% in that period. The retail price of gasoline is up 11.5% since early July. Interest rates hit their highest levels since May with the 10-year Treasury yield closing at 1.805%, its first finish above 1.8% since May 11.

After the close, shares of Cisco Systems (CSCO) jumped 94 cents, or 5.4%, to $18.29 as earnings and revenue for the tech company's fiscal fourth quarter beat Street estimates and the company boosted its dividend. The shares had risen 18 cents to  $17.35 in regular trading.

The stock market was helped by a decent report on industrial production and a benign report on consumer-price inflation as well as acceptable earnings from retailers Target (TGT) and Abercrombie & Fitch (ANF). But the market was also held back by weakness in office-products retailer Staples (SPLS) and farm-equipment manufacturer Deere (DE).

The Dow was off 7 points to 13,165. The S&P 500 was up 2 points to 1,406, and the Nasdaq Composite Index ($COMPX) gained 14 points to 3,031. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 8 points to 2,735. Apple (AAPL), the largest influence on the index, was down 86 cents to $630.83. Google (GOOG) was down $1.12 to $667.54 after hitting a 52-week high of $674.25.

Article continues below
Volume again was light. In fact, The Wall Street Journal noted that overall average market volume in August has been at its lowest levels since December 2007.

Crude oil finished at $94.33 a barrel in New York, up 90 cents. Brent crude was at $116.10 a barrel, up $2.07 in London. Crude in New York is up 21.4% since bottoming at $77.69 on June 28.

The gain in crude has pushed the retail price of gasoline to $3.709 today, according to AAA's Daily Fuel Gauge Report, up 11.5% since bottoming at $3.326 a gallon on July 2.

Meanwhile, the dollar was higher against the euro and European stocks were lower in part because of reports that Spain was "open" to the idea of applying for a financial bailout from the European Union. But gold (-GC) settled up $4.20 to $1,606.60 an ounce.

Wal-Mart Stores (WMT) is the big earnings report Thursday. But investors will pay close attention to Sears Holdings (SHLD) for all of its problems, discount retailer Ross Stores (ROST) and Dollar Tree (DLTR).

On Thursday, the Commerce Department will issue  an important report on July housing starts and building permits. The Labor Department reports on jobless claims.

Futures trading suggests a modestly higher open.

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$94.33

$93.43

7.12%

-4.55%
(per barrel)











Heating oil (-HO)

$3.0852

$3.0346

8.33%

5.87%
(per gallon)











Natural gas (-NG)

$2.7480

$2.8340

-14.37%

-8.06%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.0840

$3.0014

11.16%

16.05%
(per gallon)











Brent crude 

$116.25

$114.03

10.80%

8.26%
(per barrel)











Retail gasoline

$3.7090

$3.7020

5.97%

13.22%
(per gallon; AAA)












Cisco boosts dividend to 14 cents
Cisco Systems said it earned 47 cents a share in earnings on revenue of $11.7 billion, up from 40 cents a share a year ago on revenue of $11.2 billion. Analysts had expected 46 cents a share and revenue of $11.6 billion.

The company also boosted its dividend 75% to 14 cents a share, boosting its dividend yield to 3.2%.

The company expects to spend about 50% of its free cash flow in dividends and cash buybacks.

The company has reported three straight quarters of higher earnings. The streak follows a yearlong streak of year-over-year profit declines.

The company has been in a turnaround after restructuring last year to focus on core product areas such as routing and switching gear that shuttle data between computers. Cisco has said it is benefiting from telecommunications and other companies' need for more robust networks to support mobile and cloud computing.


The company expects to earn 45 cents to 47 cents after one-time charges, up from 43 cents a year ago. Analysts are projecting 46 cents. CEO John Chambers told CNBC this afternon that business conditions in Europe were softening because of the European debt crisis. 


CEO John Chambers told CNBC this afternoon that business conditions in Europe were softening because of the European debt crisis. "Europe will be as tough as you've heard," he said on this afternoon's conference call.


A very low trading range
The Dow traded in a range of about 57.7 points, the narrowest range for the blue chips since Oct. 8, 2007, when they fell 22 points and the difference between their high and low was just 58 points. The Dow gained 121 points the next day, hitting its all-time closing high of 14,164.50.

Part of today's malaise reflects the time of year. August is typically quiet because many money managers are on vacation. But many investors are waiting to see if central banks will engage in a new round of stimulus efforts to juice up a stagnant global economy.

A first signal on whether the banks will move will come Aug. 31 when Federal Reserve Chairman Ben Bernanke speaks at the Fed's annual retreat in Jackson Hole, Wyo.

Target cheers the Street
Target raised its full-year profit projection today after the cheap-chic discounter reported better-than-expected second-quarter revenue that showed healthy spending in food, beauty products and other items.

Target also issued a profit outlook for the current quarter that is well above analysts' expectations. The company's stock hit its highest point since 2007.

Target's rosier picture joins a number of other major retailers, including Macy (M), TJX Companies (TJX) and Home Depot (HD), that have boosted outlooks as they feel more confident in shoppers' spending in the second half of the year. They're also becoming better at luring shoppers with special deals and other attractions.

Separately, Abercrombie & Fitch (ANF) rallied $2.90 to $35.23 after fiscal-second-quarter profits exceeded the company's owned lowered guidance.

Staples gets crushed
Staples shares were down $1.97 to $11.49. The office-supply retailer said earnings fell 18% to 22 cents a share after one-time charges but were in line with forecasts.

Revenue slipped 6% to $5.5 billion and, worse, missed the consensus. The office-supplies retailer blamed the earnings fall on softer-than-expected sales in North America and continuing weakness in Europe and Australia.

Staples now expects flat sales growth and earnings to increase in the low single-digits.

Deere slumps on earnings miss
Deere fell $5.03 to $75.10 today after the agricultural equipment maker's fiscal-third-quarter profit fell short of estimates. The company also cut its earnings and sales outlooks.

The company earned $1.98 a share, or $788 million. That was actually a record, but analysts had been looking for $2.31 a share. Revenue jumped 15% to $9.59 billion.

But the company lowered its full-year sales growth forecast to 13% from 15%. At the same time, it cut its full-year earnings forecast to about $7.70 a share from the $8.30 forecast it offered in May.


While 16 of the 30 Dow stocks were higher, the index was held back by small declines in Merck (MRK), McDonald's (MCD), Boeing (BA), Johnson & Johnson (JNJ) and Caterpillar (CAT).  Bank of America (BAC) and Cisco were the percentage leaders; Intel (INTC) and Merck were the laggards.

Abercrombie & Fitch (ANF) and JDSU Uniphase (JDSU) were the S&P 500 winners. Staples and Deere were the laggards. A total of 320 S&P stocks were higher today.




Builders confidence improves; so does industrial production
Homebuilder confidence in the market for newly built single-family homes climbed in August to the highest level in more than five years on expectations the recovery in housing can continue.

The National Association of Home Builders/Wells Fargo housing market index rose 2 points to a seasonally adjusted reading of 37, the best level since February 2007. A reading of 50 or more, however, is required to suggest builders are generally optimistic.

Industrial production picked up in July after two months of slight growth, the Federal Reserve said today.

The gain was propelled by a pickup in motor vehicle output and a rebound in utility use during the hottest month on record. Industrial production rose 0.6% in July after slender 0.1% monthly gains in May and June. The Fed had previously reported a 0.4% gain in June and a 0.2% drop in May.

The August gain was in line with estimates. Industrial output was 4.4% stronger than a year ago, MarketWatch noted.

But the Empire Index of the Federal Reserve Bank of New York, which measures general business conditions, missed expectations in its August report and contracted for the first time since October 2011.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.100%

-10.00%

800.00%
5-year Treasury note 

0.795%

0.746%

32.72%

-4.22%
10-year Treasury note

1.805%

1.726%

20.98%

-3.53%
30-year Treasury bond

2.914%

2.825%

13.08%

0.87%
Currencies











U.S. Dollar Index

82.711

82.527

0.00%

2.72%
British pound

1.5689

1.5684

0.05%

0.97%
(in U.S. $)

 








U.S. $ in pounds

£0.637

£0.638

-0.05%

-0.96%
Euro in dollars

$1.23

$1.23

-0.09%

-5.15%
(in U.S. $)

 








U.S. $ in euros

€ 0.814

€ 0.812

0.09%

5.43%
U.S. $ in yen 

79.05

78.73

1.19%

2.53%
U.S. $ in Chinese

6.39

6.35

0.45%

0.96%
yuan











Canada dollar

$1.011

$1.008

1.43%

3.08%
(in U.S. $)

 








U.S. dollar 

$0.990

$0.992

-1.34%

-3.00%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,606.60

$1,602.40

-0.24%

2.54%
(per troy ounce)

 








Copper (-HG)

$3.350

$3.359

-1.99%

-2.52%
(per pound)

 








Silver (-SI)

$27.8120

$27.7630

-0.37%

-0.37%
(per troy ounce)

 








Wheat (-ZW)

$8.4675

$8.3975

-4.67%

29.72%
(per bushel)

 








Corn (-ZC)

$8.0400

$7.890

-0.16%

24.36%
(per bushel)

 








Cotton 

$0.7311

0.7209

2.48%

-20.26%
(per pound)

 








Coffee

$1.6495

1.66

-5.42%

-28.17%
(per pound)

 








Crude oil (-CL)

$94.33

$93.43

7.12%

-4.55%
(per barrel)










 

343Comments
Aug 15, 2012 2:29PM
avatar

the DEMOCRACY will cease to exist when you take from those who are willing to work and give to those who would NOT . 

 

 

avatar
Choosing a wife





A man wanted to get married. He was having trouble choosing among three
likely candidates. He gives each woman a present of $5,000 and watches
to see what they do with the money.



The first does a total makeover. She goes to a fancy beauty salon, gets
her hair done, new makeup; buys several new outfits and dresses up very
nicely for the man. She tells him that she has done this to be more
attractive for him because she loves him so much.


The man was impressed.


The
second goes shopping to buy the man gifts.... She gets him a new set of
golf clubs, some new gizmos for his computer, and some expensive
clothes. As she presents these gifts, she tells him that she has spent
all the money on him because she loves him so much.


Again, the man is impressed.




The third invests the money in the stock market. She earns several
times the $5,000.. She gives him back his $5,000 and reinvests the
remainder in a joint account. She tells him that she wants to save for
their future because she loves him so much.


Obviously,
the man was impressed.




The man thought for a long time about what each woman had done with the
money he'd given her.



Then he married the one with the biggest tits.



Men are like that, you know.


There is more money being spent on breast implants and Viagra today
than on Alzheimer's research. This means that by 2040, there should be
a large elderly population with perky boobs and huge erections and
absolutely no recollection of what to do with them.
Aug 15, 2012 2:20PM
avatar
The Fed. keeps intervening in this market not allowing a correction. In fact they manipulate almost every market. Real estate languishes because they won't process foreclosures and get them to market so we can get to the bottom and reset. They buy up the treasuries to drive down yields and continuously pump money into the banks to drive the market up and not let it correct causing another bubble to create the illusion that the economy is headed in the right direction. They give money to the auto manufacturers and lie saying the tax payers got their investment back with interest when we are out many billions. They are devaluing the dollar to help drive up the market till election time. All of this needs to stop. Stop the propping up and lets take the bad medicine all at once so we can end this politically driven misery that keeps dragging on and get on with our lives.
Aug 15, 2012 2:39PM
avatar
Obummer has stooped to new lows. Brings Romney's dog into the debate....twice.
Aug 15, 2012 3:25PM
avatar
Psychedout wrote.
"Yes, let's just let the economy crash. So when you lose your job because of no spending because everyone else lost their job, or if you're on entitlements that have to be cut because government will be out of money to pay them, or you have a bill to pay and can't get a loan because real estate will no longer have any equity, then you can thank your government for making the right choice."

You libs want to live in an artificial eutopia. In the long run it doesn't work. Just like water seeks it's level, so do markets. I would rather let markets reset like recessions are supposed to do, so I can start building real not fake equity at the expense of of any possible future prosperity. I did lose my job and had to reinvent myself. Thank God I didn't borrow over my head like others did. I did without the I -phone, cable TV, new car, back yard pool, 60" big screen, Starbucks, boat, camper, jet skis, and fancy gym memberships.With your reasoning ithe government has to prop everything up with borrowing so people can continue to pay their bills and keep their jobs, then one has to ask themselves, who is paying for that? When will we have to deal with those actions that are artificial forces on markets?
Aug 15, 2012 1:16PM
avatar

I am not rich -- however, I see no reason for the rich to have to pay more... Why? to fund what? Did they create the poor, or are they the ones that create jobs to help the poor? Did the rich cause people not to get an education, not to better themselves, not to contribute to society? Did the rich turn them on to drugs, alcohol and Jerry Springer? Why should rich people pay more? What did they do to create the social ills and mess our elected officials created? Did the rich wastefully spend every dime collected to fund social security? Did the rich spend every dime collected to fund medicare?

Aug 15, 2012 2:56PM
avatar
GM employed roughly 252,000 workers in 2008. Now it has 207,000, with 131,000 working in foreign plants. Yet GM has not been accused of outsourcing jobs. 
Aug 15, 2012 2:22PM
avatar
...Virginia, Wisconsin...which of the 57 are they?
Aug 15, 2012 2:22PM
avatar
Since we all own part of GM, could we put a sell order in soon?
Aug 15, 2012 2:20PM
avatar
Did you hear obama say that there are 57 states, that america invented the automobile, and that the cambridge police department acted stupidly... what an idiot.
Aug 15, 2012 3:12PM
avatar
you know Obummer's team is running scared when all he can talk about is tax returns and "chaining up" African Americans 
Aug 15, 2012 3:03PM
avatar
What libtards will not tell you. A DEMOCRAT co-authored Ryan's healthcare bill.

Libtards hate that.
Aug 15, 2012 4:44PM
avatar

Thank you Mr. Biden, for being an important part of getting the ObAma group removed from the white house.

 

 

Aug 15, 2012 2:53PM
avatar

Investers.com - August 15th, 2012 


As the Obama campaign continues to tout the GM bailout as an industrial policy success, the Treasury Department continues to revise upward the staggering losses inflicted on U.S. taxpayers.

On the day Government Motors, aka GM, announced it was recalling at least 38,000 of its vehicles — Impalas used by police nationwide and in Canada — due to a crash risk, a new Treasury report said it now expects to lose $25 billion on the bailout, $3.3 billion more than forecast earlier.

Aug 15, 2012 3:18PM
avatar
Who would like to see Obama's school transcripts and health records?
Aug 15, 2012 3:00PM
avatar
Forbes.com 8/13/2012

You wouldn’t know it from listening to the Obama campaign, but there’s only one Presidential candidate in 2012 who has cut Medicare: Barack Obama, whose Affordable Care Act cuts medicare by $716 billion dollars.
Aug 15, 2012 4:49PM
avatar
Are we not taking from gramma or future gramma's with the 2% tax cut Obama is taking out of soc. sec. the last two years?
Aug 15, 2012 2:55PM
avatar
Investers.com - August 15th, 2012 -

"We estimate that the administration redistributed $26.5 billion more to the UAW than it would have received had it been treated as it usually would in bankruptcy proceedings. ... Thus, the entire loss to the taxpayers from the auto bailout comes from the funds diverted to the UAW," Heritage reckons. 
Aug 15, 2012 3:49PM
avatar

While Ryan made a budget that could be discussed........ Good, bad, possible, starting point..... you know everything that goes along with any hard decisions. Obama offered a 97 to 0 budget no one even thought of twice....... Democrats or Republicans.

 

What does that tell you?

Aug 15, 2012 3:55PM
avatar
We're watching another day of "quiet" trading or in simple words... nothing. No activity. If their job is predicated on it and they can throw billions at the "hopes" of Europe returning from the dead, then why isn't Wall Street taking any chances today? Maybe it's because-- one false move and it all goes down at once. What's in your wallet? Who has your wallet? I know exactly where mine is and what's in it now and tomorrow.

Close the banks. End the Fed. Get rid of Wall Street. If you aren't 100% invested in job recovery you won't be here by the New Year. You blockaded our resumes for FOUR YEARS. Come and find us, you bastards. Bring lots of cash.

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