By Rita Nazareth - Oct 19, 2011 11:49 PM GMT+0700
Enlarge image 
A trader works on the floor of the New York Stock Exchange in New York. Photographer: Scott Eells/Bloomberg
Oct. 19 (Bloomberg) -- Alvin Wilkinson, founder and principal portfolio manager at Surveyor Management, discusses market volatility and investment strategy. Wilkinson speaks on Bloomberg Television's "InBusiness With Margaret Brennan." (Source: Bloomberg)
Oct. 19 (Bloomberg) -- David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., talks about the possibility of a U.S. recession and the European debt crisis. Rosenberg speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
U.S. stocks were little changed, after yesterday’s rally, as a decline in Apple Inc. (AAPL) shares overshadowed better-than-estimated housing data.
Apple, the world’s largest technology company, slumped 3.8 percent after profit missed estimates for the first time in at least six years. Citigroup Inc. (C) rose 1.8 percent as it agreed to pay $285 million in a Securities and Exchange Commission settlement. Morgan Stanley, owner of the world’s largest brokerage, gained 1.1 percent as earnings beat forecasts.
The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,224.86 at 12:49 p.m. New York time. The benchmark gauge for American equities rose 2 percent yesterday to the highest level since August. The Dow Jones Industrial Average advanced 38.49 points, or 0.3 percent, to 11,615.54 today.
“There’s just no conviction that seems to survive,” John Carey, a Boston-based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about $250 billion. “Apple’s results have disappointed some people. People are wondering where the economy is going, what earnings will look like and whether Europe will work its way through this crisis.”
The S&P 500 rose from the threshold of a bear market early this month amid optimism over corporate earnings and steps by European leaders to support banks. The rebound brought the gauge close to the top of a price range between 1,074.77 and 1,230.71, where it’s traded for more than two months. The S&P 500 briefly climbed above that range yesterday, reaching 1,233.10.
Earnings Season
Profit for S&P 500 companies will climb 17 percent in the third quarter and rise 18 percent to a record $99.76 for all of 2011, according to analyst estimates compiled by Bloomberg yesterday. About three quarters of the S&P 500 companies which reported results since Oct. 11 beat analysts’ estimates.
U.S. stock futures pared losses before the start of regular trading as a Commerce Department report showed that builders began work on more U.S. homes than forecast in September. The cost of living in the U.S. rose in September at the slowest pace in three months, signaling inflation may moderate as Federal Reserve officials have predicted.
“The U.S. housing data is helpful,” Peter Jankovskis, who helps manage about $2.4 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “That is one big hurdle that the economy needs to overcome. Apple’s figures are not too big of a shock and other names surprised on the upside. It’s shaping up to be a very good earnings season.”
‘Appropriately Easy’
James Bullard, president of the Federal Reserve Bank of St. Louis, said current central bank policy is “appropriately easy” and another recession is unlikely.
German Chancellor Angela Merkel is in “intense” talks with all partners on a debt-crisis solution for a European Union summit on Oct. 23, deputy government spokesman Georg Streiter said. German Finance Minister Wolfgang Schaeuble hasn’t specified how much additional firepower the European bailout fund may have, ministry spokesman Martin Kotthaus told reporters today in Berlin.
“Time is running out for Europe,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said. His firm oversees $550 billion. “The longer it waits to fix itself the more uncertainty there is. In the U.S., earnings are not bad, but we’re seeing a bit of erosion in positive surprises. We set the top of the range on the S&P 500. It would take a lot of good news to get through 1,230.”
Citigroup Gains
Citigroup gained 1.8 percent to $30.43. Citigroup agreed to pay $285 million to settle claims by the SEC that the lender misled investors about a $1 billion collateralized debt obligation tied to the U.S. housing market in which Citigroup bet against investors.
Some financial companies rose on earnings reports. Morgan Stanley (MS) increased 1.1 percent to $16.81. The owner of the largest brokerage reported profit that beat analysts’ estimates on a $3.4 billion accounting gain and higher revenue from stock trading.
Travelers Cos. posted the biggest gain in the Dow, rising 6 percent to $54.54, after the insurer reported an increase in third-quarter policy sales and said it was raising rates for clients.
Intel Corp. (INTC) added 4.1 percent to $24.36. The world’s biggest chipmaker forecast fourth-quarter sales that exceeded some analysts’ estimates, citing strong demand for laptop computers in emerging markets.
Yahoo! Inc. gained 4.5 percent to $16.17. Demand for advertising helped third-quarter profit at the Web portal exceed analysts’ estimates.
Apple tumbled 3.8 percent to $406.24. The company sold 17.07 million iPhones, less than the 20 million projected by analysts surveyed by Bloomberg, as consumers held out for the iPhone 4S, released after the close of the period that ended Sept. 24.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
Posts
No comments:
Post a Comment