Dow up 128 as strong earnings boost stocks

But IBM and Intel results disappoint. Goldman Sachs and Johnson & Johnson results cheer Wall Street. Citigroup's Vikram Pandit abruptly resigns as CEO after a board conflict. Consumer prices rise along with gas prices.

By Charley Blaine Oct 16, 2012 12:52PM
Charley BlaineUpdated: 11:49 p.m. ET

Stocks enjoyed their biggest rally in a month today, thanks to decent earnings from Goldman Sachs (GS), UnitedHealth Group (UNH) and Johnson & Johnson (JNJ).

At the same time, Vikram Pandit's resignation as CEO of Citigroup (C) startled many on Wall Street, especially as news reports suggested that his departure came as the result of conflict with his board over pay and strategic issues. Michael Corbat, who had been Citigroup's CEO for Europe, the Middle East and Africa, was named the new CEO. Citigroup shares were up 59 cents to $37.25, not far from their 52-week high of $38.40.

After the close, shares of both IBM (IBM) and Intel (INTC) moved lower as the initial take on earnings reports disappointed.

Futures trading suggests a modestly lower open on Wednesday. Trading in Standard & Poor's 500 Index ($INX) futures appeared to dip during the debate between President Barack Obama and former Massachusetts Gov. Mitt Romney. Trading on Intrade, the Irish web site that lets investors speculate on possible election outcomes, saw prices rise on the odds Obama will reelection -- suggesting traders, at least, thought the president came out on top in the clash.

The Dow Jones industrials ($INDU) closed up 128 points to 13,552; the blue chips had been up as many as 132 points in the early afternoon. The S&P 500 was up 15 points to 1,455, and the Nasdaq Composite Index ($COMPX) gained 37 points to 3,101. The Dow's gain was its third straight and biggest since Sept. 13. The gains for the S&P 500 and Nasdaq were their second in a row.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, climbed 39 points to 2,778. Apple (AAPL), the biggest influence in the index, had gained $15.03 to $649.79.

The two-day gains for the major averages were their best since Sept. 13-14. The Dow finished within 50 points of their closing high for the year; the  S&P 500 was about 5 points below its 2012 high.

The market had a solid rally on Monday, with the Dow closing up 95 points, the S&P 500 up 12 points and the Nasdaq up 20 points. For the year, the Dow is up 10.8%, with the S&P 500 up 15.6% and the Nasdaq up 18.9%.

Meanwhile, confidence among homebuilders hit a six-month high, suggesting that the housing market is continuing to recover. But the National Association of Home Builders/Wells Fargo builder sentiment index was only at 41, suggesting builders believe conditions are still not strong. Homebuilder shares were mostly lower.

Investors face another big day of earnings on Wednesday. American Express (AXP), Bank of America (BAC), Morgan Stanley (MS), Northern Trust (NTRS) and Halliburton (HAL) are among companies scheduled to report quarterly results.

The Commerce Department will report on September housing starts and building permits and the latest week of crude-oil inventories.

Intel, IBM results don't impress
Intel, up 62 cents to $22.35, had been the top-performer of the 30 Dow stocks during the regular session, but shares were down 79 cents, or 3.5%, to $21.56 after hours after rising 62 cents to $22.35 in regular trading.

The company reported $3 billion in net profit and earnings of 58 cents per share, down from $3.47 billion, or 65 cents, a year ago. After one-time items, the earnings were 60 cents a share, better than the expected 50 cents. Revenue was $14.2 billion, up from $13.2 a year ago. Its gross

For the fourth quarter, the company expects revenue of $13.6 billion, slightly less than the Street estimate of $13.7 billion, and lower gross profit margins, a key profitability measure. The company expects to trim operations of factories producing older-generation chips, reflecting the weak personal-computer business. The PC business is weakening even in China.

IBM shares were off $7.05, or 3.3%, to $203.95 after rising $2.07 to $211 in regular trading. Earnings were $3.62 a share, slightly better than the consensus estimate of $3.61. Revenue, however, was $24.7 billion, less than the expected $24.7 billion. Customers put off spending on big ticket items, and a stronger dollar for much of the quarter hurt the company's top line.

IBM expects to earn $15.10 a share in the fourth quarter. Analysts have been projecting $15.15. North American revenue was off 4% to $10.4 billion in the quarter, with European revenue down 9%.

Shares of railroad giant CSX (CSX) were up 27 cents, or 1.3%, to $21.90 after hours as it reported good growth in its export coal and automotive businesses.  In regular trading, the shares were up 18 cents to $21.63.

Net income at CSX fell 2% to $455 million from $464 million a year ago. Earnings were up slightly to 44 cents a share (based on a smaller number of shares outstanding), but analysts were expecting 47 cents. 

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$92.09

$91.85

-0.11%

-6.82%
(per barrel)











Heating oil (-HO)

$3.1985

$3.2091

1.24%

9.76%
(per gallon)











Natural gas (-NG)

$3.4370

$3.4860

3.52%

14.99%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8453

$2.8503

-2.56%

7.07%
(per gallon)











Brent crude 

$115.07

$115.80

0.39%

7.16%
(per barrel)











Retail gasoline

$3.7730

$3.7870

-0.37%

15.17%
(per gallon; AAA)












J&J, United and Goldman cheer Street
Johnson & Johnson shares finished up 95 cents to $69.55. UnitedHealth shares dropped 61 cents to $56.88. Both companies raised their full-year profit guidance, but UnitedHealth warned that it faced "a considerable challenge" in meeting analysts' estimates for next year.

Johnson & Johnson shares are up 6% this year; UnitedHealth, which joined the Dow last month, is up 12.2%.

Goldman Sachs shares were down $1.28 to $123.22. The decline came even as the investment bank boosted its dividend to 50 cents a share from 46 cents as earnings, which beat Street estimates, and revenue more than doubled. Goldman shares are up 38.4% this year.

Coca-Cola
(KO) shares were off 23 cents to $37.90 after the company said revenue outside the United States was challenged by soft economies.

Pandit leaves Citigroup; his legacy depends
There were, as noted, a number of reports suggesting Vikram Pandit quit as CEO of the nation's largest bank after battling with his board. He denied he was forced out, saying his leaving was his idea. But John Havens, the banking giant's president and chief operating officer under Pandit, quit at the same time. That's a sure signal of some dispute.

To be sure, anyone who has held Citigroup since the fall of 2007 can't be too happy. The stock is down 89% from when Pandit was named CEO. But since March 2, 2009, when the shares bottomed after the 2008 crash, the stock is up 209%.

The company has been shrinking since the crash as non-performing assets have been sold off, and there were some embarrassing issues.

There was a shareholder revolt over executive pay, a rejection by the Federal Reserve of a plan to buy back more stock and an arbitration decision over the value of a brokerage joint venture with Morgan Stanley (MS) that forced Citigroup to take a $2.9 billion write-down.

In addition, Pandit received $165 million for his low-performing hedge fund, which was purchased by Citigroup in 2007. The fund has since been shuttered. In 2012, Citigroup shareholders voted in favor of a non-binding measure to reject a $15 million pay package for Pandit.

Factory output; higher gas prices stoke CPI
Factory output -- the production factories, mines and utilities -- rose 0.4% in September after a 1.4% decline in August that was the biggest since March 2009, the Federal Reserve reported today.

Consumer prices rose 0.6% in September as the cost of gasoline surged, but October may be more benign. Gasoline prices have been falling fairly steadily since mid-September.

Pump prices slip; gold and crude oil move up
The national average retail price was $3.773 a gallon today, according to AAA's Daily Fuel Gauge Report. That was down from Monday's $3.787 and $3.871 on Sept. 14.

Crude oil (-CL) in New York settled up 25 cents to $92.01 a barrel. Brent crude, a prime determinant of retail gasoline prices, was down 76 cents to $115.04.

Gold (-GC) settled up $8.70 to $1,746.30 an ounce. Silver (-SI) ended up 21.6 cents to $32.959 an ounce. Copper (-HG) was off slightly to $3.70 a pound.

The dollar was lower against major currencies. The 10-year Treasury yield rose to 1.72% from Monday's 1.663%.

A broad rally for stocks
All of the 10 sectors of the S&P 500 were higher today, with materials, energy and technology stocks the leaders.

Intel, Caterpillar (CAT) and United Technologies (UTX) were the Dow leaders, with UnitedHealth Group (UNH), Verizon Communications (VZ) and Coca-Cola the laggards.

First Solar (FSLR), Murphy Oil (MUR) and Fossil (FOSL) were the top S&P 500 performers. PNC Financial (PNC), Regions Financial (RF) and advertising conglomerate Omnicom Group (OMC) were the laggards.

Fossil and Mattel (MAT) were the Nasdaq-100 leaders; Fastenal (FAST) and O'Reilly Automotive (ORLY) were the laggards.

Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.100%

0.00%

800.00%
5-year Treasury note 

0.692%

0.660%

9.84%

-16.63%
10-year Treasury note

1.720%

1.663%

5.07%

-8.07%
30-year Treasury bond

2.915%

2.843%

-3.86%

0.90%
Currencies











U.S. Dollar Index

79.464

79.806

-0.70%

-1.31%
British pound

1.6106

1.6080

-0.34%

3.66%
(in U.S. $)

 








U.S. $ in pounds

£0.621

£0.622

0.34%

-3.53%
Euro in dollars

$1.30

$1.30

1.41%

0.60%
(in U.S. $)

 








U.S. $ in euros

€ 0.767

€ 0.772

-1.39%

-0.60%
U.S. $ in yen 

79.05

78.70

1.39%

2.53%
U.S. $ in Chinese

6.29

6.27

0.09%

-0.62%
yuan











Canada dollar

$0.000

$1.020

-100.00%

-100.00%
(in U.S. $)

 








U.S. dollar 

$0.986

$0.981

0.22%

-3.37%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,746.30

$1,737.600

-1.56%

11.46%
(per troy ounce)

 








Copper (-HG)

$3.700

$3.702

-1.54%

7.68%
(per pound)

 








Silver (-SI)

$32.9590

$32.743

-4.68%

18.07%
(per troy ounce)

 








Wheat (-ZW)

$8.4775

$8.483

-6.07%

29.87%
(per bushel)

 








Corn (-ZC)

$7.3825

$7.373

-2.38%

14.19%
(per bushel)

 








Cotton 

$0.7486

$0.723

5.96%

-18.35%
(per pound)

 








Coffee

$1.6280

$1.609

-6.17%

-29.11%
(per pound)

 








Crude oil (-CL)

$92.09

$91.850

-0.11%

-6.82%
(per barrel)










 

453Comments
Oct 17, 2012 4:46PM
avatar
"TWENTY DAY'S TILL ROMNEY BLOW'S THE POLL'S TO HEII WHEN HE WIN'S 58% OF THE VOTE........"

Yo Nads....Not unless your Republican 'fair play' associates have the Diebold machines
rigged and ready for rotten returns.
Oct 17, 2012 1:54PM
avatar
We've been trying to keep things basically flat this morning....IBM's numbers hurt the Dow big...As you may imagine manipulators have been trying to do their thing all day, well, finally at 1335 hrs they were able to start bringing us down...Obviously scumbags not too happy about the last 2 days even though last week they cheated and manipulated their behinds off....Oh well, we will see what happens these last couple of hours...More later.
Oct 17, 2012 1:43PM
avatar
I think the Right Wingers seen the REAL Myth Robme last night and Realized how they have been fooled by this SNOB......They now realize they have NO candidate.....
Oct 17, 2012 1:33PM
avatar
With an @ss kicking the right wingers are two depressed to post.......Can you imagine what will happen on Nov 6th when President Obama gets 4 more years.......Mass suicide?  Will these boards be wiped clean from GOP ignorance and Stupidity?   One can only dream.....  
Oct 17, 2012 1:14PM
avatar
I see Classic Lady's Cat got her tongue.....All she could mumble was,  A
Oct 17, 2012 1:13PM
avatar
Where  are all the right wingers?   Licking their wounds?  LOL  
Oct 17, 2012 12:52PM
avatar

LOM just in case you check in...Manage to get the "TRIPLE NICKELS". 555

 

4 more years......wahoooooooooo!!!

Oct 17, 2012 12:43PM
avatar
Time to wash this Blog...No one bragging about their big loss last night.
Oct 17, 2012 12:42PM
avatar
NO  ONE REALLY CARES ABOUT THE WORST OR BEST "QUIT" GOING THERE..
Oct 17, 2012 12:17PM
avatar
havasu46 good post, it's a subject that should get more attention. I agree we need to stop the Christian Crusades and I might add also the corporate crusades.
Oct 17, 2012 12:11PM
avatar

The $2 trillion, $2,000,000,000,000.00, spent on fighting Christain Crusades equals $6.369 for each adult and child in the country. We could've expand the stimulus 3X if Miss Me Yet hadn't invaded Iraq to vindicate his father's screw up in the first Iraq war.

Oct 17, 2012 12:10PM
avatar

But neither candidate really addressed the original question: Should the government -- and specifically the Department of Energy -- be working to reduce the price of gasoline?

 

The POTUS has nothing to do with the price of gasoline which is set by international oil traders and foreign producers. The days of the US setting oil prices are long gone since we now have a global economy. Gasoline prices are going to stay at global levels which means higher and higher. Get a car with better milage if you don't like it.

Oct 17, 2012 12:08PM
avatar

Good Job Mr President!

 

Here’s what Obama said in that Rose Garden speech: “No acts of terror will ever shake the resolve of this great nation, alter that character, or eclipse the light of the values that we stand for.”

Oct 17, 2012 12:01PM
avatar

$2,000,000,000,000.00 spent on fighting Christain Crusades equals $6.369 for each adult and child in the country. We could've expand the stimulus 3X if Miss Me Yet hadn't invaded Iraq to vindicate his fathers screw up in the first Iraq war.

Oct 17, 2012 12:00PM
avatar

$2,000,000,000,000.00 spent on fighting Christain Crusades equals $6.369 for each adult and child in the country. We could've expand the stimulus 3X if Miss Me Yet hadn't invaded Iraq to vindicate his fathers screw up in the first Iraq war.

Oct 17, 2012 11:21AM
avatar

Very quiet day on all Fronts....Guess they know they lost and lost big...Woe be to Ro..

 

Markets are in holding pattern, waiting to see what next week will bring...?

 

Markets like stability,even if it could be better economically; Time will tell, and that will happen soon.

Oct 17, 2012 10:55AM
avatar

"Not only did I have women in binders, but I also had gays in closets, asians in boats, hispanics in orchards and blacks in the fields. I just wanted to be fair and make sure to offer an opportunity to every race available to represent my company." Hmmmm,.... come to think of it, I never hired any of them.

 

~Mitt Romney~

 

Oct 17, 2012 7:48AM
avatar
"Obama never did. Even when spanked, he came back with plausible explanations. Sorry Republicans... there's a 12 point spread between them now with the President in the lead... it will be that or more across the finish line."

Sorry, but from where I sit, and all the analysis and data I have seen from both sides, I just don't see any of the above to be accurate.  Just as Romney did, Obama also dodged plenty last night.  At best I saw that as a push. 

And as far as the polling goes, if you really trust any of that stuff, what I have seen was statically a dead heat going into last night.  And I really don't expect much change in that after last night.  Seemed pretty even to me.
Oct 17, 2012 7:47AM
avatar
I am watching you mess with the comments, the refresh, the default going to BEST instead of where I posted, and the removal of Thumb Count because you don't like the flavor. Your team is losing, Kim and Diver... I didn't cause it, just posted the truth and let others decide.
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[BRIEFING.COM] The headlines generally favored Tuesday being another good day for the stock market.  Instead, it was just a mixed day with modest point changes on either side of the unchanged mark for the major indices.

For the most part, the stock market was a sideshow.  The main trading events were seen in the commodity and Treasury markets, both of which saw some decent-sized losses within their respective complex.

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