Home report, earnings weigh on stocks
A key index of housing prices increases less than expected. Shares of steelmakers tumble after quarterly results miss estimates. Consumer confidence rises more than forecast.
By Melinda Peer, TheStreet
Updated at 1:30 p.m. ET
Stocks were flat Tuesday after shares of basic materials companies fell on weak quarterly results and a gauge of home prices rose less than expected.
At 1:30 p.m. ET, the Dow Jones Industrial Average ($INDU) was down by 12 points, or 0.1%, at 11,152. The S&P 500 ($INX) was down by 1.3 points, or 0.1%, at 1,184. The Nasdaq ($COMPX) was up 7.3 points, or 0.3%, at 2,498.
The weak housing market continues to fuel doubts about the economic recovery. The S&P/Case-Shiller 20-city August home price index rose 1.7% from August of last year, less than the 2.1% increase economists expected. The Federal Housing Finance Agency's house price index rose 0.4% in August after declining 0.5% in July.
The Conference Board's confidence index rose by 1.6 points to 50.2 in October from a revised 48.6 in September. Economists had expected an increase of 0.5 point, according to Briefing.com. Concerns about consumer spending, which accounts for two-thirds of gross domestic product, have persisted in recent months.
”The mood is improving, but progress is slow -- not unlike the pace of the growth in the economy itself,” said Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors.
The basic materials sector has been the day's worst-performing industry, pressured by disappointing results from U.S. Steel (X) and AK Steel Holding (AKS), and warnings for weak demand from ArcelorMittal (MT).
U.S. Steel (X) lost 35 cents a share in the third quarter, which included currency gains of 96 cents. Analysts had predicted a profit of 23 cents a share, according to Briefing.com. The stock was down 4.9% to $40.20.
AK Steel Holding (AKS) shares were falling 4.2% t0 $12.80. The company posted a third-quarter loss of $59.2 million, or 54 cents per share, because of rising material costs.
ArcelorMittal (MT), the world's largest steelmaker, said third-quarter earnings jumped 48% to $1.35 billion as sales increased 30%. But the company lowered its expectations for the rest of year, causing its American depositary receipts to lose 5.5% at $32.90.
DuPont (DD) said third-quarter earnings fell 10% to $367 million, or 40 cents a share. While the company beat the 34-cent average estimate of analysts and boosted its full-year forecast, DuPont shares were dropping 1.6% to $46.96.
TD Ameritrade (AMTD) said third-quarter net income fell 27% to $114 million, or 20 cents a share, as sales slipped 7.5% to $608.8 million. Analysts had expected earnings of 23 cents a share on sales of $619 million. The stock was losing 1.2% to $16.55.
Ford's (F) third-quarter net income jumped 70% to $1.7 billion, or 43 cents a share. The company posted a pretax operating profit of 48 cents a share. Analysts had forecast a profit of 38 cents a share. Ford shares were up 0.4% to $14.23.
Shares of handbag maker Coach (COH) jumped 9.8% to $48.84 after it posted a third-quarter gain of 63 cents a share on sales that were 20% higher at $991.7 million. The results exceeded Wall Street’s expectations for profits of 55 cents a share on sales of $846.8 million.
Shares of Bristol-Myers Squibb (BMY) were down 0.6% to $27 after the drugmaker said earnings fell 2% to $949 million, or 55 cents a share, beating the 53-cent average estimate. Sales were flat at $4.8 billion, falling short of expectations for $4.92 billion.
Crude oil for December delivery was shedding 14 cents at $82.66 a barrel. The American Petroleum Institute today will issue its weekly read on crude oil inventories for the week ended Oct. 22. Analysts polled by Platts expect a build of 1.5 million barrels.
The December gold contract was losing $1.90 to $1,337 an ounce.
The dollar was trading higher against a basket of currencies, with the dollar index up by 0.6%. A better-than-expected report on existing-home sales lifted stocks Monday.
The benchmark 10-year Treasury note declined 8/32, strengthening the yield to 2.594%.
Hong Kong's Hang Seng fell 0.1%, while Japan's Nikkei shed 0.3%. The FTSE in London was declining 0.8%, and the DAX in Frankfurt was slipping 0.4%.
IMO, we could have jumped from the 3rd floor window, put a few band-aids on, maybe added a splint and a few stitches, then dusted ourselves off and limped away. But no, we had to get on that stupid 1-way elevator and last time anyone checked, we were about half a mile underground and still falling. China, here we come!!
I don't think we can grow our way out of the real estate problem until we finally hit bottom. But those in charge aren't letting us hit bottom, so the uncertainty continues. We won't be able to get a good read on the state of residential or commercial real estate until the real set of books are opened up and the millions of properties of "shadow inventory" are allowed to hit the market, or are at least acknowledged to exist.
I know of a family that has not paid a single mortgage payment in 16 months and they haven't been officially foreclosed on or told to leave their home. How many others are in this position? Again, the uncertainty is killing the economy.
If you wantto read some interesting stuff about the deficit and taxes etc, read the article about the mortgage deduction on the MSN home page today and the WSJ comments imbedded in the article.
It brings home the point that any simplistic "cut taxes" or "cut gov't waste" posturing by politicians is just that. Simplistic bombast.
If you want an example of mature and responsible gov't, watch what the Brits are proposing(conservative/liberal party coalition) - making the tough decisions of reducing gov't programs and raising taxes to balance the budget.
Gridlock is preferable to the socialist path Odumba is taking us down...
Society cannot survive when one can steal from someone else via voting. The have nots will always vote to have those with moeny to give it to them...
Government is out of control with spending. We MUST SLASH government spending. We cannot afford the entitlements we have and with healthcare now expected to ADD trillions to the deficit, we are in DEEP toruble. Odumba has increased the debt over 3.2 Trillion already, and he is likely to reach 7 trillion before he leaves office...
Vote the Donkeys out of prepare for the "Decade of Prosperity" as good as their recovery summer!
I do not post here to tell others to buy, or influence decisions. Just like talking stocks, and put actual trades on the line, maybe for honesty and credibility reasons. I would like other people to make money, like I have. I believe in sharing information. What's in it for me? Nothing. As far as my ability in the market, let's just say I have logged some 20 K profit months, I have traded a estimated 300 times the past couple years, 5 of which lost me money. Trading the same good companies over and over, like DOW, GE, GS. If I had any patience, those loses would have resulted in huge gains like 3000 shares of SOA at $ 2.5, sold for 50 cent lose, the stock is now 18. This is a part time gig. And it is fun for me. I am heavily invested in real estate, my real love and passion. Not looking for followers, it is a dirty word in my family. Never being one myself. Enjoy your ranch. I enjoy your posts.
Brutus: You have outlined the exact person that should be thrown out of their home. And I bet they would if the bank didn't resell the loan so many times that they can't find who actually owns it! Normally, when I hear something like that, there's a lot more to the story than is being shared.
I fail to see how your conclusion of "uncertainty is killing the economy" is linked though. And.. I don't know if you noticed but we're chugging along pretty well. 70% of the way back to our previous peak from the trough. Consumer confidence growing.
Oversold is a position when the supple of sellers has dried up, shorts go long, and new buyers come in faster then sellers, thus share price rise. It is more dramatic when a stock has peaked, at it's low or high, because now you have a momentum shift, which can be quite dramatic. Here's the catch, the overall market is overbought now. IMO. A ideal situation is a oversold market, and oversold stocks. This was what happened last year in March/ April . Now you are talking easy money.
Timing is everything. Especially when you get it right.
Dharma, I agree, and this applies to life, not just investing. However, when it comes to timing the market, good luck with that project. Consider this - According to Money Magazine (April 2008), had you invested in an S&P 500 index fund in August 1997 and sat tight for 10 years, you’d have racked up an 88% return. Had you missed just the 20 best days in the market over that period, you would have had a 20% loss!
Your theory doesn't make much sense they way you wrote it. You got out in 1992, presumably because Dems won the WH and held Congress. Then you bought back in 1994, presumably because Repubs took control of Congress. But why did you sell in 2000 - Dems didn't keep the WH or take back control of Congress? And why buy back in 2002? - nothing changed politically.
Is this really your investing strategy or does it just sound good when you say it?
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[BRIEFING.COM] The stock market ended the Thursday session on an upbeat note with blue chips showing relative strength for the second consecutive day. The Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%) settled ahead of the Russell 2000 (+0.2%) and the Nasdaq Composite (+0.1%). It is worth mentioning the benchmark index posted its fourth consecutive gain, registering a new record closing high at 1992.38.
Equity indices climbed out of the gate thanks to early strength among ... More
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