Oracle's weakness keeps stocks in check

Oracle shares slump on weak earnings and hit competitor shares, especially IBM. Existing-home sales may be stabilizing after sales from 2007 prove worse than thought. Nike results cheer. Is Research In Motion a takeover target?

By Charley Blaine Dec 21, 2011 2:17PM
Charley BlaineUpdated: 11:55 p.m. ET

Technology shares tumbled today on weaker-than-expected earnings from Oracle (ORCL) and were almost entirely responsible for what looked like a weak stock market today. In fact, the market didn't end badly at all.

Oracle, down $3.40 to $25.77, was responsible for roughly half the loss for the Nasdaq-100 Index ($NDX), and it pushed shares of competitors lower, especially IBM (IBM). Big Blue was off $5.77 to $181.47 and subtracted 46 points from the Dow Jones Industrial Average ($INDU). The index closed up 4 points to 12,108.

Gold (-GC) dropped a bit, but crude oil (-CL) briefly topped $99 a barrel before pulling back slightly.

Investors did appear pleased by a report showing existing-home sales increasing 4% in November over October, the third straight monthly increase. But the National Association of Realtors revised its sales data since 2007, cutting its tally of home sales by about 14%, an additional piece of evidence of the enormous severity of the 2007-09 recession.

In addition to the Dow's gain, the Standard & Poor's 500 Index ($INX) gained 2 points to 1,244. The Nasdaq Composite Index ($COMPX) dropped 26 points to 2,578. The index had been down as many as 59 points. Futures trading suggests U.S. stocks will open higher on Thursday.

Article continues below.
While the Dow's close suggests little happened, 20 of its 30 components finished higher, led by General Electric (GE), up 41 cents to $17.69; Coca-Cola (KO), up $1.17 to $69.57; and Chevron (CVX), up $1.76 to $105.43. 

Meanwhile, 330 S&P 500 stocks were higher. More importantly, the S&P 500 finished above a resistance point at 1,242 and, says Toronto money manager Terry Bedford, could rise to as much as 1,260.

The index was led by Cintas (CTAS), up $2.91 to $34.19, and Yahoo (YHOO), up 88 cents to $15.99.

Yahoo is discussing a plan to cut its stake in Alibaba Group to about 15% as part of a tax-free transaction valued at between $17 billion and $18 billion. Yahoo now owns 40% of Alibaba. If that's the case,'s Dan Primack noted today, Yahoo's U.S. business is worth maybe $1 billion.

Only 31 Nasdaq-100 stocks were higher. 

Bank of America, Countrywide settle discrimination suit

Even Bank of America (BAC) was higher, finishing up 6 cents to $5.23. Its Countrywide Financial subsidiary agreed to pay $335 million to settle civil charges that it discriminated against minority homebuyers. The agreement is a historic settlement for the Obama administration in the wake of the subprime mortgage morass.

Attorney General Eric Holder said the investigation found a widespread pattern of discrimination against more than 200,000 people in more than 180 geographic markets across 41 states and the District of Columbia.

African-American and Latino homebuyers were steered to more expensive subprime loans even though they were qualified for traditional mortgage rates, officials said. 

Crude oil moves higher; gold slips

Crude oil settled up  up $1.43 to $98.67 a barrel after briefly topping $99. The cause was a larger-than-expected drawdown of domestic inventories, thanks to a tax problem. Andy Lipow of Lipow Oil Associates told Bloomberg News that refiners wanted to push product out to limit what they had to pay in ad-valorem taxes on their inventories.

Gold settled down $4 to $1,613.60 an ounce. Silver (-SI) dropped 28.7 cents to $29.249 an ounce. Copper (-HG) finished up 2.5 cents to $3.3945 a pound.

Interest rates were higher, with the 10-year Treasury yield moving to 1.967% from 1.925% on Tuesday. The reason: An auction of 7-year notes did not attract as many buyers as expected. The yield on the notes came to 1.43%; Bloomberg News said traders had expected 1.423%.

The dollar was higher against most major currencies. Two exceptions: the British pound and the Canadian dollar.

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Oracle: European woes slow decision-making
Oracle's percentage loss was its largest since March 2002; it was also the laggard among Nasdaq-100 stocks. Earnings for the giant developer of database software missed Street estimates because of weakness in its  European and  hardware businesses.

It weighed not just on IBM but other rivals as well, includingSAP (SAP), Hewlett-Packard (HPQ), Teradata (TDC) and Microsoft (MSFT). (Microsoft is the publisher of MSN Money.)

Oracle's decline spread across the technology universe. Not even Apple (AAPL) was immune; its shares were off for much of the day before recovering to a gain of 49 cents at $396.45.

Oracle is a bellwether for the health of big corporations, both foreign and domestic. If corporations are confident they buy more, and decisions get made quickly.

The European debt crisis has slowed decision-making in Europe, co-president Safra Catz said on the company's conference call late Tuesday. "This quarter was not as we thought it would be," he said.

The good news (though it didn't help the stock price) was that deals ultimately got made or will get made, he said. And the company has adjusted its planning to account for the slower process.

Oracle's situation also is a signal that companies are planning for slow economic growth in the United States and a possible recession in Europe next year, said Nomura Securities analyst Rick Sherlund told Bloomberg News.

Research In Motion attracts attention -- for all the wrong reasons
Microsoft and Nokia (NOK)considered making a joint bid for BlackBerry maker Research In Motion (RIMM), The Wall Street Journal reported. The status of the talks remains unclear, the newspaper said.

The Journal's report follows one from Reuters on Tuesday that said (AMZN) explored making a bid for Research In Motion. Research In Motion jumped $1.26 to  $13.78, tops among Nasdaq-100 stocks, as investors speculated the chatter will result in major changes -- or an outright sale.

What neither story appeared to address was whether Microsoft, which has developed its Windows Phone 7 platform, would be interested in RIM's software or its network. And it doesn't explain Amazon's interest.

Microsoft was off 26 cents to $25.76. dropped $8.17 to $174.35. Nokia was up 5 cents to $4.85 in New York.

Home sales rise -- but from a lower level
Existing-home sales rose in November to a 10-month high, showing demand may be starting to stabilize following a plunge over the past four years that was worse than thought. 

Sales climbed 4% to a 4.42 million annual pace, the most since January, the National Association of Realtors said today. The group revised down figures going back to 2007 by an average 14.3%, putting them more in line with other measures of demand.

There were two problems with the NAR's reports. The trade group overestimated the number of sales by homeowners. Second, many homes were listed on several Multiple Listing Services. The sales themselves were counted at least twice.

For-sale-by-owners accounted for 16% of sales in 2000 and 9% in 2010.

The NAR said the supply of unsold homes fell to 2.58 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace.

But CoreLogic said that, as of the end of October, there were probably an additional 1.6 million homes potentially coming onto the market as lenders try to move foreclosed properties.

Homebuilder shares were higher. The Philadelphia Housing Sector Index ($HGX) rose 2 points to 102. The index is up 6% this week alone and 28.1% for the quarter.

Europe's lending binge doesn't add much cheer
Overnight, there was lots of cheer that the European Central Bank was going to lend lots of money to European banks. It did lend 489 billion euros ($645 billion) in 1,134-day loans, the most ever in a single operation, but markets in Europe and the United States were not impressed.

The lending should help solidify the capital of many European banks. But investors didn't see it that way. Germany's Xetra Dax Index ($DE:DAX) and France's CAC-40 Index ($FR:PX1) were off nearly 1%. Britain's FTSE-100 Index ($GB:UKX) was down a bit less.

The reason: The lending program doesn't solve the debt problems of Italy, Greece or Spain. In fact, Spanish bond yields rose today.

French and German bank stocks were lower in New York today.

But shares of big U.S. banks were higher. In addition to Bank of America, JPMorgan Chase (JPM) rose 11 cents to $32.32. Wells Fargo (WFC) added 39 cents to $26.89, and Citigroup (C) added 15 cents to $26.10.

Nike rises on strong earnings
Nike's (NKE) shares rose $2.72 to $96.35 after fiscal-second-quarter earnings beat analysts' expectations. The maker of sneakers and sports apparel reported earnings of $469 million, or $1 a share, on revenue of $5.73 billion, an 18% increase over a year ago. Analysts had expected 97 cents and revenue of $5.63 billion.

Cintas, which rose $2.91 to $34.19, was the biggest gainer among S&P 500 stocks. The provider of restroom supplies and entrance mats raised its fiscal-year 2012 profit forecast to at least $2.16 a share.

Expedia (EXPE) gained $1.04 to $27.89 and was the second-best S&P 500 performer. The online travel agency completed the spinoff of TripAdvisor  (TRIP), which today began trading on Nasdaq.

Jabil Circuit (JBL) fell 55 cents to $19.40. The contract electronics manufacturer forecast fiscal-second-quarter core profit between 52 and 62 cents a share. The average analyst estimate is for 59 cents.

Short hits from the markets -- New York close



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Dec 21, 2011 2:48PM

2 million families in America about to be thown out in the streets and the Stock Market is worried about Europe?  Another 60 million low income families about to pay another 2% in taxes, while the rich get breaks and the Stock Market is worried about Europe?

Congress goes home for Christmas and America goes homeless, and the Stock Market is worried about Europe?

I really wonder if the reason all the troops are coming home from Iraq is to redeploy to American streets.

Dec 21, 2011 2:54PM

Trying to distract with EU woes, the men behind the curtain, the great and powerful Reid and Boner yank at the controls of smoke and mirrors.  Reid, a career polititian, net worth between $4-6 million and Boner worth about $6million, really can't grasp what slapping on another $1000 in taxes to middle class will do right now.  Time to clean house, no pun intened. Vote all the bums out!

Dec 21, 2011 3:19PM

Euro worries? 

What I thought they fixed this day before yesterday!  Oh no it was last week!  The week before that!  They also said they fixed it and then didn't for the past five months.  


The bottom line is someone wants the market to go back up again.  I think we should just closed down this circus ride before to many people get hurt. 

Dec 21, 2011 4:52PM
Boy if you didn't believe Wall Street was just a daily MANIPULATION MACHINE...yesterday and today PROVED it...
soaring 300 on likely fabricated housing news and today...a complete selloff of yesterday's gains...the light volume explained exaclty who was behing this. I'm guessing these guys are milking this until the Holiday hangover in Jan where we should begin to see plunges.



  Selloff? The dow is down 16 points, it was up over 330 yesterday. ???

Dec 21, 2011 3:20PM
Tomorrow I expect Euro news to be positive because the banks will again say they are doing a bigger bail out,  then on Friday it will be smaller than expected.  Then of course we will have the revision of the revised revision on housing. 
Dec 21, 2011 2:43PM
Enough with the EU woes excuse causing the market to fall, as yesteday the EU was the reason it rose 300+ points.
Dec 21, 2011 4:49PM
Yesterday there was euphoria, today it's fading....oh wait the market just went positive. The headlines can't even keep up with this market, crazy.
Dec 21, 2011 6:43PM

you idiots need to fight back.

1.) Stop driving so much. SAve your gas.

2.) Stop eating at freaking McDonalds all the time. cook and save.

3.) Pay your credit cards off.

4.) Save money - most companies are doing the same to the tune of 2 trillion dollars.

5.) Cut your cable off or get basic cable. Aren't you tired of watching reruns and commericals???

6.) Stop buying designer clothes. Is that $200 pocket book really worth it.

Yeah, I know, then consumer spending will drop and we are right back into a recession. Well then...

7.) Drink beer, eat nachos, go skinny dipping.


There, have at it.

Dec 21, 2011 5:02PM

hmmm...  The realtor numbers were overstated by a whopping 16% over since 2008?  Didn't the market have this huge really based on these numbers just yesterday, and now they are mistakien and the market is not tanking?


Either yesterdays reason for the big rally was wrong, or this number is just being ignored....


Who can you believe anymore for accurate information....

Dec 21, 2011 4:55PM
One stock slips so the market drops? Euro woes? again. My cat needs grooming today. One excuse is as good as another. Come on this has become the joke of the day!!! every day.
Dec 21, 2011 3:10PM
does anybody  i mean  anybody  really  know  what is going on  me . i buy  nothing  save  my  money. that is if  cash will be  worth  anything  when this is  all over  with. came into this  world with  nothing  looks  like  i  will leave with  nothing  lol
Dec 21, 2011 3:14PM
Good time to pick up Oracle.  They missed earnings by three cents a share and their prices are down 13+%.  Just silly.
Dec 21, 2011 5:08PM

It's awful funny how there's no mention today that S&P downgraded Hungarian debt to Junk status...

I don't know who are BIGGER crooks?....the media or the banksters?

Dec 21, 2011 8:50PM

Jon Corzine MUST go to jail.


 Eric Holder will not prosecute him because he's a former ceo of Goldman Sachs and a former Democrat office holder. He is therefore above the laws that govern the rest of the country.

Dec 21, 2011 9:53PM

Keep up the lies Max,


FACT; Operation fast and furious began in the fall of 2009.


Blame Bush won't work on that one

Dec 21, 2011 4:31PM
Fading Optimism about Europe?  Oh brother!!!!!  Yesterday everything was Ok and now today it is "Houston, everything is not OK"  I guess those that were happy yesterday had a chance to think it over and do the crap that Wall Street usually does which is can't stick behind their first impressions!  I never seen a bunch of idiots who change their minds at the slightest change in the news.  No wonder the Drug companies are doing a booming business in selling uppers and downers!!!!
Dec 21, 2011 3:06PM

Your right on point BulldogBob!


This market is literally right on the edge of the cliff.... just wait until after the holidays when S&P, Moody's start downgrading Countries... it's going to ugly fast.

I think the Dow will be around 8000 by the end of March if not sooner!

Dec 21, 2011 7:12PM

@ Charles Fasola

You said: "Federal Deficits - Net Imports = Net Private Savings. This equation is FACT."

No, it is not.

You said: "Reduce deficits and you reduce the private savings that spur economic growth."


Actually, deificits are funded by borrowing.  The more the US borrows, the less money left to be lent to private enterprises, which also increases the cost of funds to the private sector.

Dec 21, 2011 6:17PM
1984E-mailWe have plenty of capital to pay our debt off, what we don't have are politicians with enough balls to raise taxes on those who fund their campaigns.Umbrella
Dec 21, 2011 11:10PM

This is your Manipulation minute for the evening!Smile


Let's say tomorrow I want to buy GE stock and I have $100 million dollars!


Instead of making a SINGLE transaction tomorrow morning when the market opens...I make consecutive purchases every half hour of $5 million dollars...As the day moves along I see my purchases are causing GE shares to be bought because computer programs are looking at the volumn of GE share's traded. I'm causing a False sense of demand!

One hour before the market closes...I put in my sell order and capture all the gains I created on my little volumn falsehood.


This is your Manipulation minute for the evening! 

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