YAHOO: The stock market posted a large loss on Tuesday as several
companies posted quarterly earnings misses and cautious outlooks
that overshadowed signs of improvement in the credit markets. In addition,
investors digested news the
The S&P 500 spent the entirety of the session in negative
territory, although it did see large swings. The Index traded near the
unchanged mark with an hour of trade left, but a surge of selling interest sent
it to session lows to settle with a loss of 3.1%.
It was extremely busy session on the earnings front. Results were
mixed -- of the 77 companies that reported earnings after yesterday's close and
before this session's open, 52% topped estimates, 35% missed and 13% were
in-line. Outlooks were cautious -- of the 49 companies that issued guidance,
45% were negative, 30% were in-line, 21% were mixed and only 3% were positive.
Some notable names that topped third quarter earnings estimates
include 3M (MMM
60.02, +2.51), American Express (AXP
26.33, +1.98), DuPont (DD
33.32, -2.85), Pfizer (PFE
17.35, +0.01) and Lockheed Martin (LMT
84.43, -8.79). DuPont and Lockheed, however, issued downside earnings guidance
for their fourth quarter and full year.
The more widely held companies that missed estimates include BlackRock (BLK 129.24, -13.98), Caterpillar (CAT 38.84, -2.06), Freeport-McMoRan (FCX 32.81, -3.91) and Texas Instruments (TXN 16.85, -1.13). Texas Instruments also
gave a downside fourth quarter earnings outlook, citing a slowdown in orders.
With regard to the government's latest effort, the Fed will buy
commercial paper -- which is short-term corporate debt that many businesses
rely on -- from money market mutual funds. The Fed said it created the facility
because money market mutual funds and other investors have had difficulty
selling assets to satisfy redemption requests and meet portfolio rebalancing
needs. The Fed had already announced plans to buy commercial paper directly
from companies.
While the Fed needing to shore up money market funds shows that the
financial markets remain considerably strained, there continue to be signs of
improvement. The rates banks charge each other for short-term dollar loans,
measured by Libor, decreased across all terms.
In the end all ten sectors posted a decline in broad-based
weakness. Volume was on the light side with 1.16 billion shares
exchanging hands on the NYSE, which is short of the one-year average of 1.49
billion.
The tech sector (-5.6%) posted a large decline due to the 6.3% drop
in
The energy sector fell 4.3% as crude prices dropped 4.5% to $70.89
per barrel. The drop in crude prices was fueled by global economic
concerns and a 1.5% surge in the dollar.
The materials sector declined 5.7% after copper producer
The financial sector outperformed on a relative basis with a loss
of 1.8%. Strength in American Express helped offset weakness in BlackRock and Citigroup (C
14.17, -0.92). DJ30 -231.77 NASDAQ -73.35 SP500 -30.35 NASDAQ
Adv/Vol/Dec 745/2.15 bln/2029 NYSE Adv/Vol/Dec 925/1.16 bln/2182