Inflation Worries Trump Good Earnings
Stocks fell Tuesday after
higher than expected inflation data was released.
Not even good earnings reports from several
Dow components could lift the markets. A large block of ExxonMobil which
traded mid-day further helped send the market lower.
The PPI for September soared 1.9%, higher
than expected and the fastest pace in 15 years; the rise reflected the rise in
energy prices following the Gulf hurricanes. Ex-food/energy, the PPI came in at
+0.3%, and +2.6% for the year, also higher than expected.
At 1:00 PM, a 24 million share block of
ExxonMobil
(
XOM |
Quote |
Chart |
News |
PowerRating) was put up for sale. The block, worth $1.4 billion, was
picked up by Goldman Sachs $1 lower, which sent oil stocks–and the overall
market–lower.
Three large Dow components beat consensus
earnings before the bell today:
3M
(
MMM |
Quote |
Chart |
News |
PowerRating) reported 1.12, beating
estimates by 0.04, and raised the lower end of its guidance for the year.
Profits rose 10%. The company also authorized an additional $300 million stock
buyback.
United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating) reported 0.81, beating by 0.02, and issued upside guidance for FY
2005. (story)
IBM
(
IBM |
Quote |
Chart |
News |
PowerRating) reported $1.26, beating by
0.13. Net income was also strong, but revenues were light at $21.53 billion.
Trader talk: Rising costs have been an
issue for many companies. La-Z-Boy
(
LZB |
Quote |
Chart |
News |
PowerRating) (story),
Cooper Tire
(
CTB |
Quote |
Chart |
News |
PowerRating) and American Standard
(
ASD |
Quote |
Chart |
News |
PowerRating) all issued
warnings, citing higher costs.
Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating) reported 1.40, well ahead of the 1.18 estimate. Revenues increased 38%
to $6.7 billion.(story)
International Paper
(
IP |
Quote |
Chart |
News |
PowerRating) was raised to
a buy at UBS.
Johnson & Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating) beat by a penny but revenues were light. (full
story)
San Francisco Fed President Janet Yellen said
steady rate hikes are the Fed’s best policy to fight inflation and that the main
risk to the economy is high housing prices.
After the close, Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) missed
by a penny at 0.32. Yahoo
(
YHOO |
Quote |
Chart |
News |
PowerRating) beat by 0.02.Â
Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating) beat by 0.02. Ryland
(
RYL |
Quote |
Chart |
News |
PowerRating) beat by 0.18 and
gave upside guidance. Kraft
(
KFT |
Quote |
Chart |
News |
PowerRating) missed estimates by 0.04 but beat
on revenues; Q3 profit fell 14%. The stock was halted after the close. Gilead
(
GILD |
Quote |
Chart |
News |
PowerRating) beat by a penny.
The CBOT prices tonight–3.2 million
shares between $45-$49. Symbol: BOT.
The NYSE de-listed Refco (RFX), which
filed for bankruptcy–the fourth largest ever. New symbol: RFXCQ.
Strong sectors were:Â Â Airlines
(
XAL |
Quote |
Chart |
News |
PowerRating) +0.96%Â Â Â Â Â Â
Biotech Â
(
BTK |
Quote |
Chart |
News |
PowerRating)Â +0.08% Â Â Â
Weak sectors were:Â Â
Oil Services
(
OSX |
Quote |
Chart |
News |
PowerRating)Â -4.48%Â Â Â Â Oil
(
XOI |
Quote |
Chart |
News |
PowerRating)
-4.08%Â Â Â Â Â Â Natural Gas
(
XNG |
Quote |
Chart |
News |
PowerRating)Â
-3.79%Â Â Â
|
|
-62.84 | 10,285.26 |
| -14.30 | 2056.00 | |
| -11.96 | 1178.14 |
More stocks on the move:
Wells Fargo
(
WFC |
Quote |
Chart |
News |
PowerRating)
beat by a penny.
Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating) was in-line; margins
were slightly lower than expected. Net income fell 64%
Rambus
(
RMBS |
Quote |
Chart |
News |
PowerRating) beat by 0.02, ex-items,
with quarterly earnings rising almost 40%; revenues also beat estimates.
Brice Wightman
Â