Stocks rise on earnings, housing report

A key homebuilder confidence index jumps unexpectedly. Citigroup's results boost financial stocks. Northeast Utilities and NStar plan to merge. Apple and IBM will report quarterly results.

By TheStreet Staff Oct 18, 2010 8:00AM

TheStreetBy Melinda Peer, TheStreet

 

Updated at 1:48 p.m. ET

 

Stocks were rising Monday after Citigroup (C) reported quarterly earnings that beat Wall Street's expectations and after a gauge of homebuilder confidence increased.

 

At 1:48 p.m. ET, the Dow Jones Industrial Average ($INDU) was up by 55 points, or 0.5%, at 11,118. The S&P 500 ($INX) was up by 3.4 points, or 0.3%, at 1,180. The Nasdaq ($COMPX) was flat at 2,469.

 

Citigroup (C) said it earned 7 cents a share on $20.7 billion in revenue in the third quarter as the company set aside less money for bad loans. Excluding certain items, the bank earned 8 cents, beating the 6-cent average estimate of analysts. Citigroup shares were rising 2.8% to $4.06. 

 

"The major news is earnings and will be for the next couple of weeks," said Jay Suskind, senior vice president at Duncan Williams. "The perception on Citigroup appears to be positive, but we're getting into the meat of earnings this week."

 

Citigroup's results were boosting other financial stocks. JPMorgan Chase (JPM) was the best-performing Dow stock, rising 2.1% to $37.93. Wells Fargo's (WFC) shares were up 2.3% at $24.13, while Morgan Stanley's (MS) and Goldman Sachs' (GS) shares were each up more than 1%.

The National Association of Home Builders' Housing Market Index jumped 3 points to 16 in October. Economists had expected the measure of homebuilder confidence to be unchanged at 13.  

 

In other company news, Halliburton's (HAL) shares were losing 4% to $34.38 after its third-quarter profit missed expectations. Net income doubled, but its earnings from continuing operations of 55 cents fell short of analysts' estimates of 56 cents, according to Thomson Reuters.

 

Shares of Hasbro (HAS) rose 6% to $47.80 after the company reported earnings of 99 cents a share on sales of $1.31 billion. Analysts had been looking for earnings of $1.04 on sales of $1.29 billion.

 

Philips Electronics (PHG) said net earnings tripled to 524 million euros ($725.3 million) in the third quarter from a year earlier but warned that it is cautious on its sales outlook for the coming quarter. Philips' ADRs were dropping 5.3% to $31.76.

 

Apple (AAPL) and IBM (IBM) will report earnings after the closing bell. Analysts expect profits of $4.06 a share and $2.75 a share, respectively, according to Briefing.com. Apple shares were gaining 0.9% to $317.41, while IBM's were adding 0.8% at $142.15.

 

Northeast Utilities System (NU) plans to buy NStar (NST) for $9.5 billion to form one of the largest U.S. utilities. Northeast Utillities' shares were up 0.4% to $30.83, while NStar's were rising 1.7% to $40.19.

 

Heart device maker St. Jude Medical (STJ) said it will acquire biotechnology company Aga Medical Holdings (AGAM) for $20.80 a share, or $1.3 billion. St. Jude's shares were rising 0.4% to $40.06, while Aga's were soaring 41% to $20.67.

 

BP (BP) agreed to sell its upstream business in Venezuela and Vietnam to its Russian joint venture TNK-BP for $1.8 billion. BP's American depositary receipts were up 1% at $41.01.

 

Shares of Allergan (AGN) was rising 4.3% to $71.80 after Goldman Sachs raised its price target to $84 and increased its estimates, citing early Food and Drug Administration approval for Botox to treat migraines.

 

Starbucks (SBUX) is looking to boost its happy hour traffic by offering beer and wine at certain test locations. The stock was losing 0.6% to $27.38.

 

Industrial production unexpectedly fell 0.2% in September, according to the Federal Reserve. Economists had expected production to have increased 0.3% after climbing 0.2% in August. Capacity utilization declined to 74.7% from 74.8%.  Economists had projected utilization to hit 75%.

 

In commodity markets, crude oil for November delivery was gaining $1.34 at $82.59 a barrel. The December gold contract shed $2.20 to $1,369.80 an ounce.

 

The dollar was trading slightly higher against a basket of currencies, with the dollar index up by 0.04%. The benchmark 10-year Treasury note rose 5/32, weakening the yield to 2.549%.

 

Hong Kong's Hang Seng fell 1.2%, and Japan's Nikkei slipped 0.02%. The FTSE in London was rising 0.8%, while the DAX in Frankfurt was ahead by 0.6%.

 

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44Comments
Oct 18, 2010 1:39PM
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give me a break, high oil , high medical cost, who gives a d--- about  the banks. we americans can not recover as long as oil stays high!!!!!!!!!!!!!
Oct 18, 2010 1:25PM
Oct 18, 2010 11:44AM
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Downsize Foreign World Cop
That is the best thing to happen to a country in the last75 years is for us to go to war with them. Germany, Japan, South Korea had US troops for thier militarys. They made out pretty well without the expense of supporting a military. Without the Soviets, why do we need to be a world cop anymore.
Oct 18, 2010 10:28AM
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We're bucking some recent trends - stocks are up along with oil and gas, but the Euro and gold and silver are all down.  The VIX is up, which usually means stocks will be headed lower, and money is flowing into treasuries.  I think we'll be in the red by this afternoon.
Oct 18, 2010 1:34PM
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UV, I think there is a lack of interest today due to lack of of an interesting topic. Very bland, nothing to get wound up over.
Oct 18, 2010 12:33PM
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rtt

thanks

 

deklen

I suspect you will be the victim of the downward thumb, but I will give you a up thumb when I can.

Oct 18, 2010 11:58AM
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Job security has become difficult, because many people only know how to do a few things.  Historically, general knowledge, flexibility and skills help propel us to success. 
I think the Gen X, Gen Y crowd expect to retool thier skills 5 or 6 times during thier career. Some is changing workplace demands. Other is the mobility of 401K's vs pentions. The GM, ATT, IBMs of yesteryear with the life long employment opprtunities are pretty much gone. A lot of 20 and 30 some odd folks seem to roll with that as the new reality. 
Oct 18, 2010 11:56AM
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GE will look pretty good in the 15's.  Nothing fancy, always good for 1-2 points.  Punish, then build them up.  Repeat.
Oct 18, 2010 11:56AM
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Dharmabum1,

I agree with you about how general knowledge, flexibility and skills help us succeed. However the trades are being hurt by the lack of spending by people out of work who cannot afford to hire skilled laboar...

Oct 18, 2010 11:28AM
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I find it sad that banks can borrow from the fed at  0.25% and lend it back to the treasury at 3%. That's a bigger pozi scheme Madof!!!

Then the banks turn around around say the mortgage crises is the homeowners fault and they should of just made thier payments!! While it's hard to make payment when you are out of work, used up your savings and then when you do get a little money you need to feed the family!!!

And as far as QE2 it's just another bailout, Geightner, Bernanke and the federal crooks at it again!!!

Just venting!!!!!!!!!!!!!!!!

Oct 18, 2010 11:18AM
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Can't stand the new comment format.

 

Keep up the fight, libs and moderates - politics is an endurance race. Be sure to vote.

 

Good luck in the market, guys.

Oct 18, 2010 10:44AM
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Tumbleweed 1946                               Saw a regional Fed chairman on CNBC. He espoused the prevailing theory that enabling the Upper Class via low interest rate business loans is what creates jobs.

Interesting since there doesn't seem to be much investment in the US.  I just returned from Asia and traders are flooding those markets with cheap US$.  The Asians are concerned since this was one of the causes of the Asian currency crises of 98,  foreign cash flooding in and overheating their markets then a sudden withdrawal of foreign funds crashing their markets.  Good for the traders though, not only do they get a good return with rising markets but the rising currencies is an added bonus.  On their way out I am sure that they will be shorting the region.

Oct 18, 2010 10:28AM
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Earnings are looking good. Stocks and the dollar is up. MSN is buggy and let the best/worst wars begin. Happy Monday. It is just another tricky day for you....
Oct 18, 2010 10:27AM
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Good morning all.  This stock market thing sure is fun, especially lately.  EQIX looks like it could finally regain some ground.  I anticipate some big up days, coming up soon.  Nice profit already from C, since Friday.   BAC should rise as well?  HPQ looks like finally up trending. Seems like they always overdue it, especially to the down side.  But, I am a contrarian at heart.   I am loving it.  Have a great day.  I have one last paint job to look at, before season is over.  This Indian summer, sure has been nice.
Oct 18, 2010 12:45PM
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rtt

thanks

 

deklen

I suspect you will be the victim of the downward thumb, but I will give you a up thumb when I can.

This place should have middle finger instead!!...LOL
Oct 18, 2010 12:00PM
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Industrial production drops .2% in September, however that's OK the banks are stealing more so that makes up for the lack of real value!!!!Baring teeth
Oct 18, 2010 10:05AM
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Halliburton's earnings down?? How can their earnings be down when all they do historicaly is "rip off" the Government/American Taxpayer??
Oct 18, 2010 9:04AM
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Yes, the new set up is nice, but the bugs will need to be worked out....


2- Sick -  Now, I'm not going to start this morning, but read your statement, and look at it from my perspective for a minute.  Its sort of like this:  "The sky is beautiful today, report is for clear and wonderful.   Sure hope it doesn't rain later.  It did last year at this time.   


Does that tell us anything?   

 

Oct 18, 2010 10:50PM
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give me a break, high oil , high medical cost, who gives a d--- about  the banks. we americans can not recover as long as oil stays high!!!!!!!!!!!!!

the fed reserve is screwing with everyone to help usher in the socialist era.......interest rates should never of been allowed to go as low as they did, nor should the politicians of relaxed the law's for packaging of mortgages to sprout leg's to feed the housing market! difficult to say if both parties are involved in destruction of free enterprise! if gop win on nov 2nd and do not repeal oboomacare, then it'll be obvious!

keep em cominMartini glassBaring teethMartini glass

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