U.S. MARKET AVERAGES
Fall in consumer sentiments and tech stocks came under pressure.
The start of the session saw a quiet skepticism among buyers of tech stocks. Texas Instruments reported better than expected third quarter earnings but forecasted a lower than expected revenue in the fourth quarter. The stock declined 7.7% and dragged Nasdaq down 1% before recovering loss of only 6.38 to 2109.45.
Fall in consumer sentiment weighed on the broader market sentiment. Conference Board’s Leading Economic indicator fell in October to 85 from September read of 87.5. The unexpected fall in the indicator caused worries in the market that holiday spending may not be strong in the face of rising heating bill.
Tech stocks extended intra-day lows with the disk drive space currently down about 1.5%. Computer hardware and Internet stocks are also posting losses. The retail space has further declined.
The gold sector was among the day's best performers with a gain of 2.8%. However, energy and transportation stocks came off earlier highs.
Among the gaining stocks, JDA Software (
JDAS: chart) rallied 9% on earnings report, breaking to a new 52-week high. W.R. Berkley (
BER: chart) also managed to reach a fresh peak on earnings news. Arch Coal (
ACI: chart) is extended its earnings-inspired advance and added to its recent highs.
Shares of eBay (
EBAY: chart) plunged 4% on the news that Google is in the process of launching online payment service similar to eBay’s PayPal.
A number of stocks have fallen to new 52-week lows on earnings news. Altera (
ALTR: chart) and Lexmark (
LEX: chart), PRIMEDIA (
PRM: chart) have dropped on lowered guidance.
The Conference Board revealed that its index of consumer confidence dropped to 85 in October, compared to the 87.5 recorded for September. But the decline came with little surprise and on account of high energy prices. The economists were generally expecting the index to bounce back from September's slide to a level of about 89.
Existing home sales report was released by National Association of Realtors. For September, the measure came in unchanged from August's revised rate of 7.28 million units. Economists had expected a dip to a rate around 7.25 million units. The Association also said that existing home sales would have been without the Katrina related demand for homes in Louisiana State.
MOVERS AND SHAKERS
Texas Instruments (
TXN: chart) posted a 12% increase in third-quarter net income, but announced a fourth-quarter sales prediction that disappointed some investors and revealed a demand issue. The company’s stock lost 4.4%.
Chemical giant
DuPont (
DD: chart) reported a third-quarter loss of $82 million and narrowed fourth-quarter earnings forecast. The company said this third-quarter loss came largely due to tax and hurricane-related charges. DuPont earned $331 million in the same period a year ago. The company’s stock was down 2.2%.
Dow component
Intel Corp. (
INTC: chart) announced it will postpone the launch of one of its chips for the corporate server market to work on the design. The company’s stock fell 0.4%.
Ameritrade (
AMTD: chart) may have to fix earnings for several past periods because of some hedging transactions the company made in 2003. Ameritrade’s stock dropped 0.6%.
Northrop Grumman (
NOC: chart) said its third-quarter earnings fell slightly below a year-ago positions, citing damages from the recent hurricanes. The company expects earnings from continuing operations in 2006 to reach $4.10-$4.30 a share on sales of about $32 billion. Northrop is likely to be active today.
ECONOMIC NEWS
Consumer confidence continued to deteriorate in the month of October, according to a report from the Conference Board, surprising economists who had expected some improvement following a steep drop in September.
The Conference Board said that its consumer confidence index fell to 85.0 in October from an upwardly revised 87.5 in September. Economists had been expecting the index to increase to 89.0 compared to the 86.6 originally reported for September.
