Stocks struggle as investors eye Spain bailout

The country is reportedly preparing to ask for aid. US home prices rise. GM and Chrysler post sales gains, but Ford's sales are flat. MetroPCS soars on a deal rumor. PetSmart will replace Sunoco in the S&P 500.

By Melly Alazraki Oct 2, 2012 9:14AM
stock marketLast updated at 12:25 p.m. ET

U.S. stocks turned mostly negative as concerns over a global slowdown and its effect on earnings offset earlier optimism arising from speculation that Spain would soon request a much-anticipated bailout. Many observers hope an aid package will alleviate the eurozone debt crisis. Meanwhile, General Motors and Chrysler reported sales gains in September, while Ford's sales were flat.

The Dow Jones Industrial Average ($INDU) was down 56 points at 13,460. The S&P 500 ($INX) was down 1 point at 1,443. The Nasdaq Composite ($COMPX) was up 1 point at 3,114.

Microsoft (MSFT) and Intel (INTC) were among the few Dow stocks that remained positive, while DuPont (DD), Caterpillar (CAT) and J.P. Morgan Chase (JPM) were among the laggards. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Is Spain ready to ask for a bailout?
European stocks erased earlier gains Tuesday that came after Reuters reported Spain is preparing to ask for a sovereign bailout as early as next weekend, ahead of a key meeting of eurozone ministers next week. Germany, however, was urging Madrid to hold off. The request will trigger European Central Bank purchases of its debt. 

In September, not long after the Federal Reserve decided to implement a third round of quantitative easing, the ECB outlined an aggressive bond-buying plan of struggling eurozone nations that seek aid from the rescue funds.

Another report, however, said Spanish Prime Minister Mariano Rajoy said to regional presidents meeting in Madrid on Tuesday that a request isn't imminent.
Greece is also in talks with foreign lenders to bridge differences over 2 billion euros in disputed austerity cuts, Reuters reported, ahead of a key meeting of eurozone ministers next week.

Meanwhile, the Reserve Bank of Australia surprised markets overnight by cutting its key lending rate in the face of a weakening global outlook. The Australian dollar tumbled to a three-week low.


September US car sales data due out

It's a busy week for U.S. economic data. U.S. stocks ended mostly higher Monday, boosted by a surprising report on factory output. The Institute for Supply Management's index of manufacturing activity unexpectedly rose into expansion territory. That was in contrast with global trends, as similar gauges from Asia and Europe continued to point to further contraction in manufacturing.


Major automakers are set to report U.S. auto and truck sales for September. IN general, attractive financing offers, cash incentives on trucks and pent-up demand fueled September sales.

Chrysler said its September sales were up 12% from a year ealier to 142,041 vehicles, the highest for the month since 2007, and almost double the expected growth.

General Motors (GM), the largest U.S. automaker, reported a 1.5% increase in September auto sales to 210,245 vehicles on the strength of its passenger car sales. It was its strongest September since 2008. GM shares also got a boost from investor David Einhorn's comments that the company is much healthier after the bankruptcy and has cheap valuation.


Ford Motor (F), the No. 2 U.S automaker, reported flat sales in September compared with a year earlier. Ford sold 174,976 cars and trucks in September, compared with 175,199 in September 2011. Ford shares declined after Einhorn's positive comments on GM.


U.S. industry sales in September, including those of heavy trucks, were estimated to reach a seasonally adjusted annual rate of 14.9 million, Chrysler said. GM projected 14.5 million. Ford's estimate was 14.7 million.


Home prices rise most in 6 years

Home prices rose 0.3% in August from July and 4.6% from a year ago as the housing market continued to gain traction, Reuters reported. It was the biggest year-over-year increase since July 2006. But recent gains could start to wane as summer comes to an end, data analysis firm CoreLogic said Tuesday.


On Wednesday, the Institute for Supply Management will release its September report on nonmanufacturing.

Labor market data coming next
But all eyes will turn to labor market figures. On Wednesday, payroll process ADP reports on private-sector employment growth. On Thursday, the government reports on jobless claims and factory orders, while Challenger Gray & Christmas reports on mass layoffs.

On Friday, the all-important nonfarm payroll and unemployment figures for September are due. Fed Chairman Ben Bernanke reiterated Monday the bank's main concern is improvement in the jobs situation.


Stocks to watch

J.P. Morgan Chase (JPM) shares fell after New York Attorney General Eric Schneiderman filed a civil lawsuit against the bank late Monday alleging fraud related to the sale of mortgage-backed securities issued by Bear Stearns & Co., which J.P. Morgan acquired n 2008.


PetSmart (PETM) could be in focus after Standard & Poor's said the company will become the newest component of the S&P 500 Index after the close Oct. 4. The pet retailer will take the place of oil refiner Sunoco (SUN), which is being acquired by Energy Transfer Partners LP.


MetroPCS Communications (PCS) shares soared on reports that the telecommunications provider was close to announcing that it has agreed to be bought by Deutsche Telekom. Shares of Sprint (S) and Leap (LEAP) also moved on the report.


Juniper Networks (JNPR) shares advanced after unnamed sources said the company is cutting 500 jobs, or 5% of its workforce.


Mosaic (MOS) shares dropped after the fertilizer company's earnings missed estimates.


Celgene (CELG) shares advanced after the biotech said the primary endpoint was achieved in a late-stage investigative study of its breast cancer treatment Abraxane in patients with metastatic melanoma, MarketWatch reported.


Credit Suisse analysts upgraded U.S. banks to "overweight" from benchmark in a note to investors, citing expectations for loan growth and asset quality to "surprise on the upside." The bank rated Wells Fargo (WFC) at "neutral" and J.P. Morgan Chase and Huntington Bancshares (HBAN) at "outperform."

256Comments
Oct 2, 2012 10:17AM
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Earnings fell 1.7 percent for the 96 million households in the bottom 80 percent .

 

I hoped for change and got a penny back..... Obama made the biggest promises I ever remember as a candidate in 2008....... Now he must face the disappointment of the independent voters that he suckered in hoping for change...... NOBAMA ....... ever again.

Oct 2, 2012 11:47AM
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"Fathom the hypocrisy of a government that requires every citizen
to prove they are insured... but not everyone must prove they are a citizen."

- Ben Stein



Oct 2, 2012 9:41AM
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i love watching people who i know do not own their homes outright, yet they drive a new $35k car every 3 years, have the full set of suscription bills (cable-TiVO, etc), giant TV's in several rooms, high end vacations every year. 

 

i figure they are in high end debt "living the life". 

 

give it time.  they'll life the life of being broke and working for the massive bills

 

>>>>>Face it, massive deficit spending does not create prosperity<<<<<

Oct 2, 2012 10:22AM
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Stimulus, stimulus, stimulus, it is not working, it is not working, it is not working. When will the news media, economists, governments, and leaders get the massage.
Oct 2, 2012 11:58AM
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Here's some news you probably won't get on MSN.

 

The Obama administration has offered to pick up the check -- at taxpayer expense -- for legal costs associated with defense industry layoffs should automatic Pentagon cuts be triggered.

 

Under federal law, many employers are supposed to give 60-day notice of "mass layoffs" if they are considered likely, but the Obama administration for months now has urged companies not to do so.

Typical Obama politics, using tax-payer's money to manipulate defense contractors into violating federal law and offering to pay the legal fees that result,  just because it suits HIS needs to help get himself re-elected. 

 

It's mind blowing how this man is actually ahead in the polls.   I guess 50+ whatever percent of voters are imbeciles.


 

Oct 2, 2012 9:24AM
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Spain is going to ask the Euro zone to run the printing press for them so they can continue their massive deficits awhile longer?   This is good news?

Face it, massive deficit spending does not create prosperity.  It does the opposite.  Massive printing does not solve debt problems.   Higher taxes do not balance budgets.  Massive borrowing only prolongs the problem and makes it worse.

The solution is to STOP SPENDING.  Keynesian economics will bankrupt these countries.   Only a complete idiot would buy  Greek, Italian, Spanish, French, Portugal, Irish, etc bonds.   These are destructive to your wealth.  US Treasuries are just as bad.  

Buy  stocks, Specie and land.  Protect your savings.  Fiat currencies are the most dangerous investment one can have.  Examine history, and you find this to be very  true.
Oct 2, 2012 9:41AM
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JPM Chase charged with Securities FRAUD !  So what ? They will never be convicted or found guilty ! They can rob and steal at will with impunity No Fear of the Law ! They are ABOVE THE LAW !  There is no JUSTICE for us only for the Banking Cartel. These banks have one mode take your money! SCREW THE PEOPLE !  Take your money out of these criminal organizations !  Close your accounts and take your hard earned money out !!!
Oct 2, 2012 9:38AM
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The profit motive for anyone who has sold something in their life sees so simple to understand.  Be you a kid on the beach in Iponema or selling an airplane for Boeing.  The difference between what the item costs say $2 and the sales price of $4 results in a profit of $2. How liberal Americans can not, do not, and altogether refuse to get this business imperative is part of our American problem.  Like my mother would say when I was a kid, "money doesn't grow on trees", but to many millions of Americans they have zero and I mean zero understanding of the Profit Imperative. It has been described as evil and demonized by the present administration. Like the POTUS said describing oil executives and the price of oil.  "We know what they are up to", as he demonizes their quest for profits. I contend there are millions and millions of Americans who go to work and yet have no understanding of how, what, why, business succeeds and fails.  For those Americans who don't understand free trade they might consider this analogy.  When our guberment allows China free access to our markets you are actually paying the wage of the Chinese worker.  You are forgoing the income of an American; perhaps a relative, a friend, a neighbor, and sending the money to the Chinese worker. We are denying  Americans the opportunity to engage in the American Dream when we cut them off as our Government allows the Chinese worker to have a life at the expense of an American.through free trade. Sure you get a better price because of the lower standards of living Chinese workers are presently willing to accept.  But these short term gains for yourself; when multiplied billions of times, have created the erosion of the American tax base and the opportunity for Americans to have gainfull employment and live the American Dream. I believe we should share our success with the rest of the world but this wholesale destruction of our country though allowing this massive economic destruction is paramount to Treason. The question to me is simple.  Do you want your fellow American to have a life and prosperor with profits here in America or do you want a Chinese worker to have that profit as he settles for a much less affluent lifestyle? So IMHO the problem in America is not the rich getting richer it is that everyone else is getting poorer because  our Politicains are selling us out by allowing other countries to proper at the expense of the profit to Americans.  If you do not accept and understand the Profit Motive and believe this liberal idea that profits are "immoral" or unimportant then you are destined to enjoy a much less affluent lifestyle and are  forcing your friends and neighbors to the  same end.
Oct 2, 2012 9:58AM
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Countries broke, asking other broke countries to print money for them.
Sounds like a plan???
Oct 2, 2012 11:43AM
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what's wrong with simply updating the requirements to showing ID to vote in general?  we show ID for everything.  except to vote. 

 

i know 3 homes on my street where the people do not vote.  i could readily send in votes by mail for these people.  and of course no one would have grounds to reject "their" vote. 

 

so of COURSE there are never cases of voter fraud!  because it's so easy to actually vote fraudulently! 

Oct 2, 2012 11:27AM
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Quoted Text:  "Pennsylvania judge halts voter ID requirment"

 

Pretty funny that the "Party of the Liberals"....... the so called thinkers depend on people that can't produce a picture ID to get their candidate elected...... Wow.... You guys are so smart.

Oct 2, 2012 10:30AM
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While surfing through various new sites, I found a headline on Fox that states another Border Patrol Office was killed and another wounded.
How ever as of this moment nothing on MSN or CNN.
Oct 2, 2012 11:51AM
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Well, since I don't have to show ID to vote....I'm going to vote REPUBLICAN at 12 different precincts.

 

How do you liberal whiners like that?

Oct 2, 2012 9:54AM
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huh? another country needs fake money and that's good news?
Oct 2, 2012 10:04AM
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The earnings gap between rich and poor Americans was the widest in more than four decades in 2011, Census data show, surpassing income inequality previously reported in Uganda and Kazakhstan.

 

Thanks Obama

Oct 2, 2012 10:10AM
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"chug chuga chug knock clunk." 

I got a good chuckle from that.

I find much less humor in the Fed's latest enactment of QEI, or QE to Infinity(and beyond!)

Does this move strike anyone else as an act of desperation? The more I think about it, the more I sense that it is.
Oct 2, 2012 11:04AM
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Western civilization is dying from a thousand cuts we have all inflicted upon ourselves over the past century. We have all be doing Wall Street nose candy for decades and now party is over. No paper game from the FED or Central Bank can put our humpty-dumpty world back together again. There is no such thing as a do over button. It is time to go cold turkey, pay our bills and get government entitlement spending under control. Big Brother is broke and the only way he can continue his reckless spending habit is to steal your piggy bank. When you finally find it he will have pulled the cork and spent every last penny you had and he still wants more. 

So, he took out a credit card in your name and has just gone on spending and spending and spending. When he maxed out that one he got 10 more and just keeps charging away.

It's the first of the month, the bill is due and we are 14 trillion dollars in debt with now way to pay it off.

Thanks Big Brother. You stupid SOB! 

Oct 2, 2012 10:54AM
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Now Washington is placing fines on hospitals averaging $125,000 each as a result of it's medicare fraud investigation. These fines are being levied against hospitals because the government says a portion of medicare patients had to be readmitted for the same illness or medical complication. In case nobody noticed, hospitals for the most part follow medical protocol when it comes to treating patients and.everyone responds to treatment with different outcomes. The Obama administration spent hundreds of millions to prove there was a huge amount of money that could be saved investigating medicare fraud. Last year they found about 6% of what they spent investigating fraud and now they are shaking down the hospitals who provide care to so many uninsured patients on a compassionate basis in an attempt to save face and justify their massive expenditures. This move is being disguised as an effort to improve the quality of care to medicare patients. The hospitals are bound by medicare administrative rules and guidlines for testing, length of stay, and treatment for patient visits to the hospital.
2012- Many physicians are no longer treating medicare patients due to losses they have incurred by the ever changing billing rules that leave their practice holding the bag. Fast forward 2013- Many hospitals will be refusing medicare patients due to costs they have incurred from government fines levied against them that they cannot defend themselves against in court. This administration is on a money grab agenda, and now those who we depend on for our medical treatment are in their sights.
Oct 2, 2012 11:56AM
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I suppose the illegal that shot the border patrol agent this morning is going to go to PA, and vote for Obama because Obama bought him a gun!!!! 
Oct 2, 2012 12:11PM
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"Counting... I wonder if that has anything to do with an expectation that the cuts won't actually happen..."

 

1. Obama is in no position to make such a prediction, since he has failed to come up with a single budget during his entire administration, much less work with Congress to get a budget passed. 

2. Whether Obama has an "expectation" (BS) or not, does not excuse his using tax payer money to manipulate the actions of private companies to fit his own agenda.

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