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.
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.
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."
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.
to prove they are insured... but not everyone must prove they are a citizen."
- Ben Stein
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<<<<<
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.
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!
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.
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?
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.
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!
"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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