3SOF

Stocks in Neutral Before Earnings.......


Monday 10/8/2007


Stocks in New York struggled Monday and ended little changed as traders turned cautious at the start of the first busy week on the earnings front.

The Dow Jones Industrial Average was down 22.28 points, or 0.16%, at 14,043.73, and the S&P 500 lost 5.01 points, or 0.32%, at 1552.58. The Nasdaq Composite tacked on 7.05 points, or 0.25%, to 2787.37, with strength provided by Google (GOOG:) , which topped the $600 level for the first time.

Of the Dow's 30 components, Hewlett-Packard (HPQ:) was the best performer, climbing 2.2%. On the other hand, ExxonMobil (XOM:) was one of the worst, falling 0.7% as oil prices plummeted $2.20 to $79.02 a barrel.

"This was a small pullback when compared to the move last week," said Edgar Peters, chief market strategist with Pan Agora. "We had a little bad news, and investors took profits. There wasn't much to move the market, so the decline in oil had a lot of oil companies dropping off and that hurt."

Breadth was poor. On the New York Stock Exchange 2.03 billion shares changed hands, as decliners topped advancers by a 2-to-1 margin. Volume on the Nasdaq reached 1.51 billion shares, with losers outpacing winners nearly 3 to 2.

Last time out, a stronger-than-expected September jobs report helped the major averages close the week with gains.

The Dow rose 91.70 points, or 0.66%, to 14,066.01, having touched a record intraday high of 14,124.54. The S&P 500 added 14.75 points, or 0.96%, to 1557.59, an all-time closing high. The Nasdaq surged 46.75 points, or 1.71%, to 2780.32. The indices notched their fourth winning week in a row.

Traders, though, were nervous ahead of the earnings reporting season, which unofficially kicks off Tuesday when Dow component Alcoa (AA:) posts its results.

The earnings calendar was light to start the week, however, with Yum! Brands (YUM:) the only S&P 500 company due out with results.

"The market is at high levels, so this is a perfect day for investors to step aside and let the market digest," said Peter Cardillo, chief market economist with Avalon Partners. "Earnings won't really pour in until next week, so we'll maintain this cautious attitude through this week."

Meanwhile, there were several mergers in the spotlight. German database firm SAP (SAP:) said over the weekend that it will acquire French software maker Business Objects (BOBJ:) for $6.8 billion in cash. SAP lost $2.87, or 4.9%, to $56.36. Business Objects, on the other hand, rallied 15% to $57.83.

In other M&A activity, United Industrial (UIC:) advanced 6.3% to $80.39 after Textron (TXT:) set plans to purchase the maker of unmanned aircraft for almost $1.1 billion. Textron shed 2.1% to end at $64.01.

Elsewhere, Vodafone (VOD:) said it will buy the Italian and Spanish assets of Tele2 AB for more than $1 billion. Vodafone finished down 39 cents, or 1.1%, to $34.58.

Among ratings changes, JPMorgan downgraded Merrill Lynch (MER:) to neutral from overweight after the financial-services company said last week it expects $5 billion in writedowns due to the credit crisis over the summer. Shares of Merrill slid $2.55, or 3.3%, to $74.12.

Deutsche Securities cut its ratings on several companies in the real estate sector. Kimco Realty (KIM:) , Avalon Bay (AVB:) , Boston Properties (BXP:) and Public Storage (PSA:) all were downgraded to hold from buy. Shares of each were down between 1.4% and 3.3%.

Away from stocks, precious metals were also lower. Gold lost $8.50 to $738.70 an ounce, and silver eased 12 cents to $13.36 an ounce.

Due to the Columbus Day holiday, bond markets were closed in the U.S. and the economic docket was bare.

European bourses were mimicking the sluggish action of the U.S. averages. London's FTSE 100, Germany's Xetra Dax and the Paris CAC 40 lost 0.2% or more. Overnight in Asia, Hong Kong's Hang Seng slipped 0.2%, while China's CSI 300 Index jumped 1.3%. Japan's Nikkei 225 Index was closed.

Stock Futures Edge Higher.......


Tuesday 10/9/2007


Stock futures were steady early Tuesday as investors awaited the minutes from the last Federal Reserve meeting and geared up for the unofficial start to the third-quarter earnings season.

Futures on the S&P 500 were adding 3 points to 1565.70 and were 2 points above fair value. Nasdaq 100 futures were up 4.80 points to 2185 and were roughly even with fair value.

At 2 p.m. EDT, the central bank will post the minutes from its last meeting, which are expected to provide more insight into the Fed's decision to cut the overnight fed funds rate. Major averages in the U.S. have enjoyed a strong run since the Fed cut interest rates by 50 basis points on Sept. 18, and market participants will be searching for clues regarding possible future moves.

Traders were also preparing for the earnings flood, with Alcoa (AA:) set to kick off the reporting season. The Dow Jones Industrial Average component is due to report after the closing bell, with Wall Street expecting a profit of 65 cents a share.

On Monday, U.S. indices finished little changed in anticipation of the earnings torrent. The Dow ended down 22.28 points, or 0.16%, at 14,043.73, and the S&P 500 lost 5.01 points, or 0.32%, at 1552.58. The Nasdaq Composite tacked on 7.05 points, or 0.25%, to 2787.37.

Following the last close, fast-food chain operator Yum! Brands (YUM:) posted a third-quarter profit that topped the Thomson First Call average estimate. Yum! also upped its full-year guidance.

In other corporate news, SLM Corp. (SLM:) , better known as Sallie Mae, has sued to compel a group that includes private-equity firm J.C. Flowers, JPMorgan and Bank of America to close a buyout deal for the education lender.

Also after the last close, Sprint Nextel (S:) said that CEO Gary Forsee will step down immediately.

Commodities were lower. Crude oil was down 43 cents to $78.59 a barrel. Gold was losing $3.90 to $734.80 an ounce, and silver eased 5 cents to $13.30 an ounce.

U.S. Treasury prices were slightly higher as bond traders got back to work following the Columbus Day holiday. The 10-year note was up 2/32 in price, reducing the yield to 4.63%. The 30-year bond was adding 5/32, yielding 4.86%.

European bourses were mixed. London's FTSE 100 rose 0.8%, while Germany's Xetra Dax and the Paris CAC 40 were unchanged. Overnight in Asia, Hong Kong's Hang Seng jumped 1.7% , and Japan's Nikkei 225 Index added 0.6%.

Stocks Tiptoe Higher.......

Tuesday 10/9/2007 12:59 PM EDT


Stocks were edging higher Tuesday as investors awaited the minutes from the last Federal Reserve meeting and geared up for the unofficial start to the third-quarter earnings season.

The Dow Jones Industrial Average was gaining 27 points, or 0.2%, to 14,071, and the S&P 500 was up 3 points, or 0.2%, at 1556. The Nasdaq Composite was rising 4 points, or 0.1%, to 2791.

At 2 p.m. EDT, the central bank will post the minutes from its last meeting, which are expected to provide more insight into the Fed's decision to cut the overnight fed funds rate. Major averages in the U.S. have enjoyed a strong run since the Fed cut interest rates by 50 basis points on Sept. 18, and market participants will be searching for clues regarding possible future moves.

Traders were also preparing for the earnings flood, with Alcoa (AA:) set to kick off the reporting season. The Dow component is due to report after the closing bell, with Wall Street expecting a profit of 65 cents a share.

Last time, U.S. indices finished little changed in anticipation of the earnings torrent. The Dow ended down 22.28 points, or 0.16%, at 14,043.73, and the S&P 500 lost 5.01 points, or 0.32%, at 1552.58. The Nasdaq tacked on 7.05 points, or 0.25%, to 2787.37.

Following the prior close, fast-food chain operator Yum! Brands (YUM:) posted a third-quarter profit that topped the Thomson First Call average estimate. Yum! also upped its full-year guidance. Shares were gaining $1.79, or 4.9%, to $38.08.

Much like the previous session, Google (GOOG:) was leading technology shares higher, having topped the $600 level for the first time Monday. Helping the stock this time was a decision by Bank of America Securities to raise its price target to $670 from $620. Google was rising $6.31, or 1%, to $615.93.

Bank of America also raised its price target for Amazon.com (AMZN:) to $105 from $90. However, shares were off 36 cents, or 0.4%, to $95.49.

"Investors can't stop talking about technology being the new leadership group," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "Actually, tech turned the corner several months ago, but is only now really getting Wall Street's attention. Being overbought has been no obstacle for the group."

Among other analyst action, Deutsche Securities downgraded Coca-Cola (KO:) and PepsiCo (PEP:) to hold from buy, citing valuation for both. Coke and Pepsi were each shedding 0.5%.

Meanwhile, Calyon initiated coverage of GM (GM:) and Ford (F:) with reduce ratings, while Goldman boosted its earnings estimates for the next three years on Microsoft (MSFT:) . Shares of Ford and GM were inching lower, while Microsoft advanced 1.4%.

In other corporate news, SLM Corp. (SLM:) , better known as Sallie Mae, has sued to compel a group that includes private-equity firm J.C. Flowers, JPMorgan (JPM:) and Bank of America (BAC:) to close a buyout deal for the education lender. SLM was losing 20 cents, or 0.4%, to $49.01.

Also after the last close, Sprint Nextel (S:) said that CEO Gary Forsee will step down immediately. The stock was recently down 40 cents, or 2.2%, to $18.10.

Commodities turned higher after a lower open. Crude oil was up $1.56 to $80.58 a barrel. Gold was climbing $6.80 to $745.50 an ounce, and silver rallied 24 cents to $13.60 an ounce.

U.S. Treasury prices were slightly higher as bond traders got back to work following the Columbus Day holiday. The 10-year note was up 2/32 in price, reducing the yield to 4.63%. The 30-year bond was adding 7/32, yielding 4.85%.

European bourses were solidly higher. London's FTSE 100 rose 1.1%, and Germany's Xetra Dax and the Paris CAC 40 were slightly higher%. Overnight in Asia, Hong Kong's Hang Seng jumped 1.7% , and Japan's Nikkei 225 Index added 0.6%.

Fed Gives Stocks a Lift.......


Tuesday 10/9/2007 4:44 PM EDT


Hopes that the Federal Reserve will continue to slice interest rates in order to spur economic activity lifted both the Dow Jones Industrial Average and the S&P 500 to record highs Tuesday.

The Dow jumped 120.80 points, or 0.86%, to 14,164.53, and the S&P was up 12.57 points, or 0.81%, at 1565.15. The Nasdaq Composite rose 16.54 points, or 0.59%, to 2803.91.

Of the Dow's 30 components, only three finished lower. Alcoa (AA:) and American Express (AXP:) were the best performers, adding 3.7% and 3%, respectively.

The major averages surged after traders digested the minutes of the Sept. 18 Fed gathering. During that meeting, the Federal Open Market Committee cut its fed funds target rate by 50 basis points -- a bigger move than many expected -- as a measure against the liquidity problems in financial markets stemming from the subprime mess.

"Given the unusual nature of the current financial shock, participants regarded the outlook for economic activity as characterized by particularly high uncertainty, with the risks to growth skewed to the downside," the minutes read. "Some participants cited concerns that a weaker economy could lead to a further tightening of financial conditions, which in turn could reinforce the economic slowdown."

The panel also noted eased inflation concerns, saying that "the inflation situation seemed to have improved slightly and judged that it was no longer appropriate to indicate that a sustained moderation in inflation pressures had yet to be shown."

After they had a chance to consider what the minutes could mean for future rate actions, traders reacted positively and stocks were off to the races.

"There's no argument within the Fed to prevent the central bank to save the economy if it stumbles, which is a positive for the market," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "The Fed's move was a response to the liquidity issue as opposed to a real weakening of the economy, which is good that growth hasn't ceased."

Shortly before the closing bell, San Francisco Fed president Janet Yellen defended the Fed's rate cut, saying that "it was important to put a substantial easing in place in September so as not to fall ''behind the curve.''"

On the other hand, St. Louis Fed President William Poole issued a stern warning earlier about the housing market and its potential recovery.

"Recent events suggest that housing will remain weak for several more quarters," said Poole in a speech. "Stabilization may not begin until well into 2008."

Only the semiconductor sector finished lower for the day. Among the winners, the Nasdaq Transportation Index and the Amex Oil Index rose 1.8%, the Philadelphia Utility Index added 1.4%, and the NYSE Financial Index ended up 0.7%.

Breadth was positive. On the New York Stock Exchange 2.89 billion shares changed hands, as advancers topped decliners by a 2-to-1 margin. Volume on the Nasdaq reached 1.90 billion shares, with winners outpacing losers nearly 3 to 2.

Traders were also preparing for the earnings flood, with Alcoa set to kick off the reporting season. The Dow component is due to report after the closing bell, with Wall Street expecting a profit of 65 cents a share.

Following the prior close, fast-food chain operator Yum! Brands (YUM:) posted a third-quarter profit that topped the Thomson First Call average estimate. Yum! also upped its full-year guidance. Shares gained $1.82, or 5%, to $38.11.

Much like the previous session, Google (GOOG:) lead technology shares higher, having topped the $600 level for the first time Monday. Helping the stock this time was a decision by Bank of America Securities to raise its price target to $670 from $620. Google rose $5.56, or 0.9%, to end at $615.18.

Bank of America also raised its price target for Amazon.com (AMZN:) to $105 from $90. However, shares ended 53 cents, or 0.6%, lower at $95.32.

"Investors can't stop talking about technology being the new leadership group," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "Actually, tech turned the corner several months ago, but is only now really getting Wall Street's attention. Being overbought has been no obstacle for the group."

Among other analyst actions, Deutsche Securities downgraded Coca-Cola (KO:) and PepsiCo (PEP:) to hold from buy, citing valuation for both. Coke inched 0.1% higher to $57.88, while Pepsi finished 1% lower at $73.21.

Meanwhile, Calyon initiated coverage of GM (GM:) and Ford (F:) with reduce ratings, while Goldman boosted its earnings estimates for the next three years on Microsoft (MSFT:) .

Ford added 1.6% to $8.32, GM tacked on 0.6% to $38.33, and Microsoft rose 0.9% to $30.10.

In other corporate news, SLM Corp. (SLM:) , better known as Sallie Mae, has sued to compel a group that includes private-equity firm J.C. Flowers, JPMorgan (JPM:) and Bank of America (BAC:) to close a buyout deal for the education lender. SLM lost 71 cents, or 1.4%, to $48.50.

Also after the last close, Sprint Nextel (S:) said that CEO Gary Forsee will step down immediately. The stock slipped 22 cents, or 1.2%, to $18.28.

Commodities finished with gains. Crude oil finished up $1.24 to $80.26 a barrel. Gold climbed $4.60 to $737.40 an ounce, and silver added 23 cents to $13.59 an ounce.

U.S. Treasury prices were mostly lower following the Fed minutes, but the 30-year bond was adding 3/32, yielding 4.86%. The 10-year lost 4/32 to yield 4.65%.

European bourses were solidly higher. London's FTSE 100 rose 1.1%, and Germany's Xetra Dax and the Paris CAC 40 were slightly higher. Overnight in Asia, Hong Kong's Hang Seng jumped 1.7% , and Japan's Nikkei 225 Index added 0.6%.

Stocks Set for Early Decline.......


Wednesday 10/10/2007 7:44 AM EDT



Stock futures indicated that the U.S. averages would pull back from their record highs Wednesday following a weak start to the third-quarter earnings season courtesy of Alcoa (AA:) .

Futures on the S&P 500 were losing 2 points to 1574.20 and were 2.05 points below fair value. Nasdaq 100 futures were down 2.20 points to 2192 and were 1.16 points lower than fair value.

On Tuesday, the minutes from the last Federal Reserve meeting spurred hopes for more interest rate cuts, sending the Dow Jones Industrial Average and the S&P 500 to record closing highs. The Dow jumped 120.80 points, or 0.86%, to 14,164.53, and the S&P was up 12.57 points, or 0.81%, at 1565.15. The Nasdaq Composite rose 16.54 points, or 0.59%, to 2803.91.

Following the closing bell, though, Dow component Alcoa posted third-quarter earnings that fell just short of the Thomson First Call estimate. Revenue eased from a year ago, due partly to lower metal prices and softness in North America.

Alcoa's report marked the unofficial start of the reporting season, although the pace of reports will pick up dramatically next week.

Meanwhile, Chevron (CVX:) and International Paper (IP:) were out with their own disappointing profit news late.

Other notable companies are on the calendar, including retailer Costco Wholesale (COST:) , Host Hotels & Resorts (HST:) and agricultural company Monsanto (MON:) .

Already, Costco posted a fiscal fourth-quarter profit of $372.4 million, or 83 cents a share. Excluding a charge, the company reported earnings per share of 91 cents a share, topping estimates. However, quarterly revenue fell short of forecasts.

On the other hand, Host Hotels beat the consensus for the top and bottom lines.

Away from equities, commodity prices were on the rise. Crude oil tacked on 5 cents to $80.31 a barrel. Gold futures were up $5.80 to $748.90 an ounce, and silver gained 16 cents to $13.74 an ounce.

Treasury prices were dipping. The 10-year note was off 1/32 in price, pushing the yield to 4.66%. The 30-year bond was down 3/32 to yield 4.87%.

Overseas markets were mixed. In Asia, Hong Kong's Hang Seng rose 1.2%, and Japan's Nikkei 225 crept 0.1% higher. In Europe, London's FTSE 100 slipped 0.1%, while Germany's Xetra Dax added 0.2%.

Dow Jones 30 Industrials (INDU)
Bull run now.......JMHO of course   
Looking for 14,700 to 14,800 this month 

Dow Takes a Step Back.......


Wednesday 10/10/2007


Blue-chip stocks ended lower Wednesday as selloffs in the financial and transportation sectors pulled the Dow Jones Industrial Average and the S&P 500 back from their record levels.

The Dow lost 85.84 points, or 0.61%, at 14,078.69, and the S&P 500 was off 2.68 points, or 0.17%, to 1562.47. The Nasdaq Composite was stronger, rising 7.70 points, or 0.27%, to 2811.61, buoyed again by a 1.7% rise in Google (GOOG:) .

Boeing (BA:) pressured the Dow, falling 2.7% after saying it would delay the initial deliveries of the 787 Dreamliner plane by six months. Another weak spot was Alcoa (AA:NYSE) , whose third-quarter earnings fell just short of estimates. The stock lost 2.5%.

The energy sector was the best performer of the day, with the Philadelphia Oil Service Sector Index surging 3% and the Amex Oil Index adding 0.5%. Those moves came despite profit warnings from Chevron (CVX:) and Valero (VLO:) .

Valero's stock sank as low as $69.95 before reversing course and rising 2.9% to close at $74.25. Chevron also recovered from its worst levels but still went out down 0.8% to $92.08.

On the flipside, financials and transportation stocks were hard hit. The Dow Jones Transportation Index fell 1.1%, and the KBW Bank Sector Index slid 1.1%.

"The S&P 500 and the Dow made new highs yesterday, but transports and financials didn't," said Philip Roth, chief technical market analyst with Miller Tabak. "We consolidated a bit today, which is actually favorable in the context of yesterday. There is still a narrow uptrend with financials lagging, and that sector will continue to drag on the market."

On the New York Stock Exchange, 2.99 billion shares changed hands, and decliners topped advancers by a 6-to-5 margin. Volume on the Nasdaq reached 1.95 billion shares, with losers edging out winners nearly 8 to 7.

The quarterly numbers from Alcoa, which came after the prior close, marked the unofficial start of earnings season. The pace of reports will pick up dramatically next week.

Another company with profit news was International Paper (IP:) , who disappointed investors with word that lower-than-expected land sales would hit its results. International Paper slid 2.4% to close at $36.18.

Other notables with reports included retailer Costco Wholesale (COST:) , Host Hotels & Resorts (HST:) and agricultural company Monsanto (MON:NYSE) .

Costco posted a fiscal fourth-quarter profit of $372.4 million, or 83 cents a share. Excluding a charge, the company reported earnings per share of 91 cents a share, topping estimates. However, quarterly revenue fell short of forecasts. Still, Costco soared $5.82, or 9.2%, to $69.13.

Monsanto reported a widening fiscal fourth-quarter loss of $210 million, or 39 cents a share. Excluding items, Monsanto lost 18 cents a share, a penny more than analysts expected. The company also guided below the Wall Street consensus for fiscal 2008, and shares were off 74 cents, or 0.8%, to $88.78.

On the other hand, Host Hotels beat the consensus for the top and bottom lines, and the stock rose 29 cents, or 1.3%, to $23.40.

Away from earnings, workers at Chrysler walked off their jobs after the United Auto Workers union failed to reach a labor agreement with the automaker before an 11 a.m. EDT deadline.

Commodity prices were on the rise. Crude oil jumped $1.04 to close at $81.30 a barrel. Gold futures were up $2.90 to $746 an ounce, and silver gained 8 cents to $13.66 an ounce.

The Energy Department will post its weekly inventory report on Thursday, a day later than usual because of the Columbus Day holiday.

Treasury prices withstood early selling and rose late. The 10-year note was up 3/32 in price, cutting the yield to 4.64%. The 30-year bond was adding 2/32 to yield 4.86%. The dollar was slightly weaker against the world's major currencies.

Overseas markets generally improved. In Asia, Hong Kong's Hang Seng rose 1.2%, and Japan's Nikkei 225 crept 0.1% higher. In Europe, London's FTSE 100 added 0.3%, while Germany's Xetra Dax was flat.

Tech Wreck Sinks Stocks.......


Thursday 10/11/2007


Stocks were enjoying solid gains for much of the session Thursday, but afternoon weakness in the tech sector spoiled the run and the major averages ended the day lower.

The tech-heavy Nasdaq Composite rose by as many as 23 points before pulling back and settling down 39.41 points, or 1.4%, to 2772.20.

Among major tech names, Baidu.com (BIDU:) , Infosys Technologies (INFY:) , Research In Motion (RIMM:) , Amazon.com (AMZN:) , and SanDisk (SNDK:) dropped 5% or more.

"Investors have to be mindful of these tech companies and the recent rocket rise they've had," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "There was a potential for a pullback, and there has been a lot of fast money that has poured into these names. These momentum traders have the ability to really push these stocks around."

The decline in tech stocks overshadowed positive news out of Wal-Mart (WMT:) and General Motors (GM:) , both of which helped the blue chip averages set record intraday highs earlier.

When the closing bell rang, though, the Dow Jones Industrial Average had fallen 63.57 points, or 0.45%, to 14,015.12. The S&P 500 lost 8.06 points, or 0.5%, at 1554.41, having been up 14 earlier.

"Markets get skittish around new highs," said Steven Sheldon, principal with SMS Capital Management. "We were due to focus on bad news, having shrugged off a lot of that for so long. The market has been so strong that it's hard to get worked up over what could end up being a healthy pullback."

Leading the Dow to the downside were Alcoa (AA:) , Boeing (BA:) , Intel (INTC:) , and Caterpillar (CAT:) , all finishing lower by 1.7% or more.

Breadth was decidedly negative Thursday. On the New York Stock Exchange 3.36 billion shares changed hands, as decliners topped advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.50 billion shares, with losers outpacing winners nearly 11 to 4.

While the tech sector was the worst decliner, plenty of others finished in negative territory as well. The Amex Airline Index slid 1.5%, the S&P Retail Index lost 1.3%, and both the Dow Jones Transportation Average and the Nasdaq Biotechnology Index finished down 0.9%.

Stocks were also hit by statements from European Central Bank governor Axel Weber. He said the bank may need to resume interest rate hikes and push them to a "restrictive" level, even though the ECB has left rates unchanged recently.

Earlier in the session, Dow component Wal-Mart led gains after the retailer boosted its third-quarter profit guidance. The company posted a September comp sales increase of only 1.4%, a bit weaker than had been anticipated, and attributed the improved profit outlook to cost cuts. Shares of Wal-Mart rose $1.31, or 2.9%, to $46.90.

Most other retailers reported lackluster results for September. Target (TGT:) posted a September comp sales rise of 1.2%, compared with expectations of a 2.2% gain. Target was off $1.15, or 1.8%, to end at $64.62.

Apparel retailers were the worst retail performers for the month. Abercrombie & Fitch (ANF:) , Gap (GPS:) , Chico's FAS (CHS:) and Limited (LTD:) all reported monthly losses and missed consensus targets.

Aside from Wal-Mart, GM was a winner on the Dow. The automakers shares surged 4.9% to $39.99, a new 52-week high, after the United Auto Workers union ratified a landmark labor deal with the company.

In earnings, PepsiCo (PEP:) reported a 17% advance in its third-quarter profit, easily topping the Thomson First Call estimate. However, shares ended down $1.83, or 2.5%, to $71.77.

Away from equities, commodity prices were on the rise. The weekly inventory report from the Energy Department showed an unexpected decline of 1.7 million barrels in crude stocks, and oil jumped $1.78 to $83.08 a barrel.

Gold futures were up $10.60 to $756.70 an ounce, and silver gained 12 cents to $13.98 an ounce.

On the economic front, the Commerce Department said that the August trade deficit fell to $57.6 billion from $59.0 billion, falling short of economists'' estimates.

"The trade deficit still is about 5% of [gross domestic product] and remains a big drag on economic growth and incomes," said Peter Morici, professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission. "Simply, the trade deficit cannot be significantly reduced without curbing the U.S. appetite for imported goods, especially, petroleum, Chinese consumer goods and automobiles."

The Labor Department also released two separate reports. It said jobless claims fell to 308,000 from 320,000 last week, below the consensus 315,000. Also, its import price index slipped 0.2% last month, compared with a 0.1% decline in August.

Treasury prices were mixed. The 10-year note was up 3/32 in price, cutting the yield to 4.64%. The 30-year bond was down 1/32 to yield 4.87%.

Overseas markets were higher. In Asia, Hong Kong's Hang Seng rose 2%, and Japan's Nikkei 225 climbed 1.6%. In Europe, London's FTSE 100 rose 1.4%, and Germany's Xetra Dax added 0.6%.

Tech Stocks Bounce Back.......


Friday 10/12/2007


Tech stocks rebounded and led the broader market higher Friday as traders put the previous Day's losses behind them.

The Nasdaq Composite rose 33.48 points, or 1.21%, to 2805.68, and the Dow Jones Industrial Average gained 77.96 points, or 0.56%, to 14,093.08. The S&P 500 added 7.39 points, or 0.48%, to end at 1561.80.

"There was a little of everything for the bulls today, between good economic numbers, M&A coming back into the picture, and corporate earnings," said Peter Cardillo, chief market economist with Avalon Partners. "This has increased momentum buying."

Cardillo warned, though, that "the real earnings onslaught will hit next week and will be more of a focus, although it could end up cutting into the enthusiasm due to disappointments."

Breadth was decidedly positive to end the week. On the New York Stock Exchange 2.72 billion shares changed hands, as advancers topped decliners by a 5-to-3 margin. Volume on the Nasdaq reached 1.96 billion shares, with winners outpacing nearly 3 to 2.

Indices notched their fifth winning week in a row. The Dow tacked on 0.2%, the S&P 500 climbed 0.3%, and the Nasdaq ended up 0.9% for the week.

Last time out, blue-chip averages hit new record intraday levels before an unraveling in tech stocks dashed gains. The main culprits included Baidu.com (BIDU:) , Research In Motion (RIMM:) , SanDisk (SNDK:) and Amazon.com (AMZN:) , all of which fell at least 5% Thursday.

The tech-heavy Nasdaq ended sharply lower by 39.41 points, or 1.4%, to 2772.20. The Dow swung in a range of more than 200 points but ultimately fell 63.57 points, or 0.45%, to 14,015.12.

McDonald's (MCD:) helped start the new session on a positive note after projecting third-quarter earnings above analysts'' expectation.

The fast-food restaurant chain now expects a profit of 83 cents a share on a continuing operations basis, ahead of Wall Street's 77-cent estimate. Shares advanced 77 cents, or 1.4%, to $57.02.

Fellow Dow component General Electric (GE:) closed lower after the industrial giant reported its third-quarter earnings. On a continuing operations basis, GE recorded a profit of 50 cents a share, matching estimates. The company also reiterated its full-year guidance. Still, GE was off 57 cents, or 1.4%, to finish at $41.03.

Also on the Dow, Citigroup (C:) ended down after Deutsche Bank downgraded the stock to sell from buy, cutting its stock price target to $44 from $60 a share.

The downgrade comes a day after Citigroup said it will marry its investment banking and alternative-investment operations into a single business. Citigroup shed 45 cents, or 0.9%, to $47.87.

Among other analyst actions, Morgan Stanley raised its price target for Apple (AAPL:) to $180 from $150, and Oppenheimer was the latest to bump its price target for Google (GOOG:) higher. The firm raised its target to $700 from $625.

Shares of Apple advanced $5.02, or 3.1%, to $167.25, reversing the previous session's decline. Google shares ended up $15.39, or 2.5%, to $637.39.

Tech stocks were also bolstered by news that software giant Oracle (ORCL:) offered to acquire BEA Systems (BEAS:) for $6.7 billion, or $17 a share. The bid represents a 25% premium to BEA's closing price Thursday.

Shares of BEA surged 38% to $18.82, after the company said the offer is too low, suggesting investors are betting on a better price.

The housing sector was under pressure after Wachovia lowered 2007 and 2008 earnings estimates for 13 homebuilders, noting escalating cancellation rates and ineffective promotions. Among those cut were Centex (CTX:) , Beazer Homes (BZH:) , Lennar (LEN:) , Toll Brothers (TOL:) , Hovnanian (HOV:) , and D.R. Horton (DHI:) .

The Philadelphia Housing Sector Index slumped 1.2% as each of the housing stocks fell by 2.5% or more.

Traders also had to contend with a new round of economic data. A day after chain stores posted same-store sales results for September, the government said that retail sales rose 0.6% last month, tripling expectations. Excluding autos, retail sales increased 0.4% in September, also topping expectations.

Ian Shepherdson, chief economist with High Frequency Economics, said that the retail sales report is actually weaker than it appears.

"Our measure of core, which excludes food, gas and autos, rose a mere 0.1%, following a 0.1% decline in August," he said. "If, as we expect, October sales are more or less flat too, this would mark the softest three-month patch since the spring of 2003, during the invasion of Iraq."

At the same time, the Labor Department said the September growth for its producer price index came in at 1.1%, much hotter than the expected 0.5% rise. The core number, which excludes food and energy, advanced 0.1%, below consensus.

Also on the economic docket, the University of Michigan said its consumer sentiment index eased to a reading of 82.0 in October from 83.4 last month. Additionally, the government said that business inventories inched 0.1% higher in August, below expectations.

Commodity prices ended mixed. Crude oil jumped past $84 for a time and finished up 61 cents to $83.69 a barrel, a new closing high. Gold futures were down $2.90 to $753.80 an ounce, and silver fell 8 cents to $13.90 an ounce.

Treasury prices were lower following a choppy session. The 10-year note was off 11/32 in price, pushing the yield to 4.68%. The 30-year bond was down 21/32 to yield 4.91%.

Overseas markets were mixed. In Asia, Hong Kong's Hang Seng shed 1%, and Japan's Nikkei 225 lost 0.7%. In Europe, London's FTSE 100 and Germany's Xetra Dax tacked on 0.1%.

Stocks Start Week With Losses.......


Monday 10/15/2007


Stocks in the U.S. closed to the downside Monday as record crude prices took the spotlight away from the first busy week of earnings for corporate America.

The Dow Jones Industrial Average lost 108.28 points, or 0.77%, to 13,984.80, its third finish below the 14,000 level this month. The S&P 500 dropped 13.09 points, or 0.84%, at 1548.71, and the Nasdaq Composite fell 25.63 points, or 0.91%, to 2780.05.

General Motors (GM:) was the main drag on the Dow, tumbling 3.6% for the day. Citigroup (C:) , American Express (AXP:) , and Verizon (VZ:) all fell by 2% or more.

Several Internet names combined to sink the tech-heavy Nasdaq. Google (GOOG:) , Yahoo! (YHOO:) , eBay (EBAY:) , and Amazon.com (AMZN:) each dropped at least 2%.

One of the biggest stories of the day occurred away from stocks, as oil prices rose past $86 a barrel for the first time ever. Crude has already been hovering around its all-time high, and news of tensions between Turkey and Kurdish rebels in northern Iraq has been supporting prices in recent days. Oil jumped $2.44 to a record close of $86.13 a barrel.

"With oil trading where it is, today's decline isn't all that surprising," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "Combined with today's earnings, like Citigroup, people are now faced with more worries for the rest of the third-quarter reports as well as the fourth quarter."

Energy stocks such as Exxon Mobil (XOM:) and Chevron (CVX:) were stronger, while truckers and airlines slumped.

The Amex Oil Index rose 1%, and the Philadelphia Oil Service Sector Index tacked on 0.6%.

As for the worst decliners, the KBW Bank Index dropped 1.7%, the Amex Airline Index slid 1.4%, the Philadelphia Utility Index fell 1.2%, and the Dow Jones Transportation Average lost 1.1%.

"There seems to be more uncertainty than optimism," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "The market doesn't like uncertainty, and that may be enough to warrant taking some profits and looking for a better short-term entry point."

Breadth was poor to start the week. On the New York Stock Exchange 2.64 billion shares changed hands, as decliners topped advancers by a 3-to-1 margin. Volume on the Nasdaq reached 1.99 billion shares, with losers outpacing winners nearly 7 to 3.

While the week is a hectic one for quarterly reports, the first day was on the light side, with Citi, Mattel (MAT:) and Genentech (DNA:) among the few names of note.

Citi said it earned $2.38 billion, or 47 cents a share, including a pretax $729 million gain, in the latest quarter. Earnings were down 57% from a year ago, roughly in line with the forecast the financial giant gave a few weeks ago.

Citigroup is also said to be partnering with JPMorgan Chase (JPM:) and Bank of America (BAC:) to create a mammoth fund that would provide liquidity for the commercial paper market, which seized up over the summer. Citigroup finished down $1.63, or 3.4%, to $46.24.

Toymaker Mattel also reported a drop in profits, and while revenue advanced nearly 3% year over year, it missed Wall Street's expectation. Shares lost 1%.

After the close, Genentech posted a 21% rise in third-quarter profits, with adjusted earnings per share beating Wall Street's target by a penny.

The earnings torrent will pick up speed Tuesday, as reports from Intel (INTC:) , IBM (IBM:) , Yahoo!, and Johnson & Johnson (JNJ:) , among others, come due.

Meanwhile, mergers and acquisitions also made headlines, with Tektronix (TEK:) agreeing to be acquired by Danaher (DHR:) in a $2.8 billion deal. Shares of Tektronix surged $9.51, or 33.6%, to $37.85, while Danaher slipped 1.2% to end the day at $81.52.

Also, following the prior close, biotech name Biogen Idec (BIIB:) said it would explore selling the company if it could find a buyer. Carl Icahn has already expressed interest, the company said. Biogen soared $13.08, or 18.8%, to $82.51.

Away from stocks, the lone report on the economic docket came from the New York Federal Reserve Bank, which said its Empire State manufacturing index jumped to 28.8 from 14.7, well above the consensus 13.1.

Ian Shepherdson, chief economist with High Frequency Economics, said it was hard to take the Empire State report seriously.

"It is far from clear to us what has driven the gap, though we would guess it may be because a greater proportion of Empire State respondents are exporters than in manufacturing across the country as a whole, so they are benefiting disproportionately from the drop in the dollar," he said.

Elsewhere, Fed Chairman Ben Bernanke is due to deliver his economic outlook when he speaks before the Economic Club of New York at 7 p.m. EDT.

Treasury prices held steady. The 10-year note rose 3/32 in price, yielding 4.67%. The 30-year bond was dipped 1/32 to yield 4.90%.

Among precious metals, gold crept towards a 28-year high as the dollar continued to fall. Gold futures added $8.30 to $762.20 an ounce.

World stocks were mixed. Tokyo's Nikkei added 0.2%, and Hong Kong's Hang Seng climbed 2.4%. London's FTSE slid 1.3%, and Frankfurt's Dax lost 0.9%.

Futures Face Heavy Pressure.......


Tuesday 10/16/2007



Stocks were set to tumble anew Tuesday as record crude prices and a poor outlook from Swedish handset maker Ericsson (ERIC:) spooked buyers.

Futures on the S&P 500 were losing 7.60 points to 1552.60 and were roughly 6 points below fair value. Nasdaq 100 futures were diving 12.25 points to 2168.50 and were about 11 points lower than fair value.

Crude prices were again rallying to all-time highs as a conflict between Turkey and Kurdish rebels in Iraq stoked fears of a decline in oil output and general instability in the Middle East. Oil was recently jumping $1.34 to $87.47 a barrel, having touched a record of $87.97 earlier. Crude is now up 9% over the last week.

On Monday, a spike in oil combined with weak earnings news from Citigroup (C:) to sink the major averages.

After opening higher, the Dow Jones Industrial Average turned southward and lost 108.28 points, or 0.77%, to 13,984.80, its third finish below the 14,000 level this month. The S&P 500 ended down 13.09 points, or 0.84%, at 1548.71, and the Nasdaq Composite fell 25.63 points, or 0.91%, to 2780.05.

Ahead of the new session, Ericsson pressured tech stocks after warning that third-quarter sales would come in lower than expected. The handset maker blamed the sluggish performance on lower-than-expected sales of mobile network upgrades. Shares fell more than 25% overseas.

Ericsson's loss hit London's FTSE 100, which fell 0.5%. Germany's Xetra Dax slid 0.4%. Asia markets also fell overnight. Hong Kong's Hang Seng dropped 2%, and Japan's Nikkei 225 lost 1.3%.

Back in the U.S., traders were awaiting the latest flood of earnings, most of which are coming from the tech and banking sectors. Reports from Intel (INTC:) , IBM (IBM:) and Yahoo! (YHOO:) are due after the closing bell.

Already, Delta Air Lines (DAL:) posted a third-quarter profit of $220 million, or 56 cents a share, and said revenue grew year over year.

Homebuilder D.R. Horton (DHI:) said that fourth-quarter net sales were nearly halved to $1.3 billion from a year ago. The company blamed cautious buyers and a tough housing environment due to mortgage problems.

D.R. Horton's warning comes a day after Federal Reserve Chairman Ben Bernanke addressed the New York Economic Club about the recent credit crisis and its impact on consumers and the housing sector.

Bernanke said that "it remains too early to assess the extent to which household and business spending will be affected by the weakness in housing and the tightening in credit conditions." He added that "the further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year."

On the economic docket, the Fed will post industrial production and capacity utilization for September at 9:15 a.m. EDT. Both figures should dip from August's levels.

Treasury prices were higher. The 10-year note was adding 6/32 in price, cutting the yield to 4.65%. The 30-year bond was up 8/32 to yield 4.90%.

Stocks Post Modest Losses.......


Tuesday 10/16/2007 9:56 AM EDT


Stocks were losing more ground Tuesday as record crude prices and a poor outlook from Swedish handset maker Ericsson (ERIC:) spooked buyers.

The Dow Jones Industrial Average was down 47 points at 13,938, and the S&P 500 was losing 7 points to 1542. The Nasdaq was off 13 points at 2767.

Crude prices were again rallying to all-time highs as a conflict between Turkey and Kurdish rebels in Iraq stoked fears of a decline in oil output and general instability in the Middle East. Oil was recently up 27 cents to $86.40 a barrel, having touched a record of $87.97 earlier. Crude is now up 9% over the last week.

On Monday, a spike in oil combined with weak earnings news from Citigroup (C:) to sink the major averages.

After opening higher, the Dow turned southward and lost 108.28 points, or 0.77%, to 13,984.80, its third finish below the 14,000 level this month. The S&P 500 ended down 13.09 points, or 0.84%, at 1548.71, and the Nasdaq fell 25.63 points, or 0.91%, to 2780.05.

Ahead of the new session, Ericsson pressured tech stocks after warning that third-quarter sales would come in lower than expected. The handset maker blamed the sluggish performance on lower-than-expected sales of mobile network upgrades. Shares fell more than 25% overseas.

Ericsson's loss hit London's FTSE 100, which fell 0.5%. Germany's Xetra Dax slid 0.4%. Asia markets also fell overnight. Hong Kong's Hang Seng dropped 2%, and Japan's Nikkei 225 lost 1.3%.

Back in the U.S., traders were awaiting the latest flood of earnings, most of which are coming from the tech and banking sectors. Reports from Intel (INTC:) , IBM (IBM:) and Yahoo! (YHOO:) are due after the closing bell.

Already, Delta Air Lines (DAL:) posted a third-quarter profit of $220 million, or 56 cents a share, and said revenue grew year over year. Shares were up 2.5%.

Johnson & Johnson (JNJ:) also traded higher after the health care company beat third-quarter earnings estimates on an adjusted basis. J&J also upped its full-year guidance.

Homebuilder D.R. Horton (DHI:) said that fourth-quarter net sales were nearly halved to $1.3 billion from a year ago. The company blamed cautious buyers and a tough housing environment due to mortgage problems.

D.R. Horton's warning comes a day after Federal Reserve Chairman Ben Bernanke addressed the New York Economic Club about the recent credit crisis and its impact on consumers and the housing sector.

Bernanke said that "it remains too early to assess the extent to which household and business spending will be affected by the weakness in housing and the tightening in credit conditions." He added that "the further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year."

Several finance names were also out with results. State Street (STT:) beat estimates, while U.S. Bancorp (USB:) was in line.

KeyCorp (KEY:) , on the other hand, said that third-quarter earnings missed targets. The company also guided the fourth-quarter below consensus. Regions Financial (RF:) and Wells Fargo (WFC:) also fell short.

On the economic docket, the Fed said that industrial production rose an expected 0.1% last month. Capacity utilization held steady at 82.1%.

Treasury prices were higher. The 10-year note was adding 6/32 in price, cutting the yield to 4.65%. The 30-year bond was up 8/32 to yield 4.90%.

Dow, Nasdaq Extend Losses.......


Tuesday 10/16/2007 11:07 AM EDT


Stocks were stuck in the red Tuesday as record crude prices and a poor outlook from Swedish handset maker Ericsson (ERIC:) spooked buyers.

The Dow Jones Industrial Average was down 100 points, or 0.7% at 13,884, its second triple-digit decline in as many days. The S&P 500 was losing 10 points, or 0.7%, to 1538. The Nasdaq Composite was off 16 points, or 0.6%, at 2764.

Crude prices were again rallying to all-time highs as a conflict between Turkey and Kurdish rebels in Iraq stoked fears of a decline in oil output and general instability in the Middle East. Oil was recently up 67 cents to $86.80 a barrel, having touched a record of $87.97 earlier. Crude is now up 9% over the last week.

On Monday, a spike in oil combined with weak earnings news from Citigroup (C:) to sink the major averages.

After opening higher, the Dow turned southward and lost 108.28 points, or 0.77%, to 13,984.80, its third finish below the 14,000 level this month. The S&P 500 ended down 13.09 points, or 0.84%, at 1548.71, and the Nasdaq fell 25.63 points, or 0.91%, to 2780.05.

Ahead of the new session, Ericsson pressured tech stocks after warning that third-quarter sales would come in lower than expected. The handset maker blamed the sluggish performance on lower-than-expected sales of mobile network upgrades. Shares fell more than 25% overseas.

Ericsson's loss hit London's FTSE 100, which fell 0.5%. Germany's Xetra Dax slid 0.2%. Asia's markets also fell overnight. Hong Kong's Hang Seng dropped 2%, and Japan's Nikkei 225 lost 1.3%.

Back in the U.S., traders were awaiting the latest flood of earnings, most of which are coming from the tech and banking sectors. Reports from Intel (INTC:) , IBM (IBM:) and Yahoo! (YHOO:) are due after the closing bell.

Already, Delta Air Lines (DAL:) posted a third-quarter profit of $220 million, or 56 cents a share, and said revenue grew year over year. Delta, however, was shedding 28 cents, or 1.4%, to $19.71.

Johnson & Johnson (JNJ:) also traded higher after the health care company beat third-quarter earnings estimates on an adjusted basis. J&J also upped its full-year guidance. The stock was lower by 35 cents, or 0.5%, to $65.30.

Homebuilder D.R. Horton (DHI:) said that fourth-quarter net sales were nearly halved to $1.3 billion from a year ago. The company blamed cautious buyers and a tough housing environment due to mortgage problems. Shares of the homebuilder were slumping 37 cents, or 2.7%, to $13.21.

D.R. Horton's warning comes a day after Federal Reserve Chairman Ben Bernanke addressed the New York Economic Club about the recent credit crisis and its impact on consumers and the housing sector.

Bernanke said that "it remains too early to assess the extent to which household and business spending will be affected by the weakness in housing and the tightening in credit conditions." He added that "the further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year."

Several finance names were also out with results. State Street (STT:) beat estimates, while U.S. Bancorp (USB:) was in line. State Street was gaining 4.7% to $72.20, while U.S. Bancorp was down 0.9% to $32.22.

KeyCorp (KEY:) , on the other hand, said that third-quarter earnings missed targets. The company also guided the fourth-quarter below consensus. Regions Financial (RF:) and Wells Fargo (WFC:) also fell short.

Wells Fargo dropped 4.8%, KeyCorp was losing 4.4%, and Regions was down 2.1%

On the economic docket, the Fed said that industrial production rose an expected 0.1% last month. Capacity utilization held steady at 82.1%.

Treasury prices were rallying. The 10-year note was adding 9/32 in price, cutting the yield to 4.64%. The 30-year bond was up 13/32 to yield 4.89%.

Stocks Give Up More Ground.......


Tuesday 10/16/2007 1:31 PM EDT



Stocks were losing more ground Tuesday as record crude prices and a poor outlook from Swedish handset maker Ericsson (ERIC:) spooked buyers.

The Dow Jones Industrial Average was down 81 points, or 0.6% at 13,903 but earlier was off by 100. The S&P 500 was losing 9 points, or 0.6%, to 1539, and the Nasdaq Composite was falling 13 points, or 0.5%, at 2767.

Crude prices were again rallying to all-time highs as a conflict between Turkey and Kurdish rebels in Iraq stoked fears of a decline in oil output and general instability in the Middle East. Oil was recently up $1.62 to $87.75 a barrel, having touched a record of $87.97 earlier. Crude is now up 9% over the last week.

On Monday, a spike in oil combined with weak earnings news from Citigroup (C:) to sink the major averages.

After opening higher, the Dow turned southward and lost 108.28 points, or 0.77%, to 13,984.80, its third finish below the 14,000 level this month. The S&P 500 ended down 13.09 points, or 0.84%, at 1548.71, and the Nasdaq fell 25.63 points, or 0.91%, to 2780.05.

Ahead of the new session, Ericsson pressured tech stocks after warning that third-quarter sales would come in lower than expected. The handset maker blamed the sluggish performance on lower-than-expected sales of mobile network upgrades. Shares fell more than 25% overseas.

Ericsson's loss hit London's FTSE 100, which fell 0.5%. Germany's Xetra Dax slid 0.1%. Asia's markets also fell overnight. Hong Kong's Hang Seng dropped 2%, and Japan's Nikkei 225 lost 1.3%.

Back in the U.S., traders were awaiting the latest flood of earnings, most of which are coming from the tech and banking sectors. Reports from Intel (INTC:) , IBM (IBM:) and Yahoo! (YHOO:) are due after the closing bell.

Already, Delta Air Lines (DAL:) posted a third-quarter profit of $220 million, or 56 cents a share, and said revenue grew year over year. Delta was up 23 cents, or 1.2%, to $20.23.

Johnson & Johnson (JNJ:) also traded higher after the health care company beat third-quarter earnings estimates on an adjusted basis. J&J also raised its full-year guidance. The stock was lower by 41 cents, or 0.6%, to $65.24.

Homebuilder D.R. Horton (DHI:) said that fourth-quarter net sales were nearly halved to $1.3 billion from a year ago. The company blamed cautious buyers and a tough housing environment due to mortgage problems. Shares of the homebuilder were slumping 51 cents, or 3.8%, to $13.07.

D.R. Horton's warning comes a day after Federal Reserve Chairman Ben Bernanke addressed the New York Economic Club about the recent credit crisis and its impact on consumers and the housing sector.

Bernanke said that "it remains too early to assess the extent to which household and business spending will be affected by the weakness in housing and the tightening in credit conditions." He added that "the further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year."

Several finance names were also out with results. State Street (STT:) beat estimates, while U.S. Bancorp (USB:) was in line. State Street was gaining 8.5% to $74.78, while U.S. Bancorp was down 0.4% to $32.38.

KeyCorp (KEY:) , on the other hand, said that third-quarter earnings missed targets. The company also guided the fourth-quarter below consensus. Regions Financial (RF:) and Wells Fargo (WFC:) also fell short.

Wells Fargo dropped 3.8%, KeyCorp was losing 5.4%, and Regions was down 1.3%

On the economic docket, the Fed said that industrial production rose an expected 0.1% last month. Capacity utilization held steady at 82.1%.

Treasury prices were rallying. The 10-year note was adding 9/32 in price, cutting the yield to 4.64%. The 30-year bond was up 11/32 to yield 4.89%.

Futures Point to Early Rally.......


Wednesday 10/17/2007 7:44 AM EDT



Stocks in the U.S. were set to open sharply higher Wednesday as blowout earnings from Intel (INTC:) , along with beats by Yahoo! (YHOO:) and several components of the Dow Jones Industrial Average had traders looking to recoup losses from the previous two sessions.

Futures on the S&P 500 were rallying 7.40 points to 1555 and were 6.70 points above fair value. Nasdaq 100 futures were soaring 15.75 points to 2192 and were 20.30 points higher than fair value.

Following the previous session's close, Intel handily beat estimates and raised its outlook for the year, and Yahoo! topped both the top- and bottom-line estimates. Both were trading higher in the premarket session.

Also on the late side, IBM (IBM:) reported earnings that beat the Thomson First Call estimate by a penny.

Before the new session began, four other Dow components were out with better-than-expected earnings. JPMorgan Chase (JPM:) and Altria (MO:) topped Wall Street's earnings-per-share estimates, as did Coca Cola (KO:) and United Technologies (UTX:) .

Investors are hoping to put the previous two sessions behind them with the help of these strong earnings reports. Last time out, worries about housing, record oil prices and weak earnings combined to sink the major averages.

The Dow fell 71.86 points, or 0.5%, to 13,913, and the S&P 500 dropped 10.18 points, or 0.66%, to 1538.53. The Nasdaq Composite surrendered 16.14 points, or 0.58%, at 2763.91.

Over the last two sessions, the Dow has fallen 180 points, the S&P 500 has lost 23 points, and the Nasdaq is down 41 points.

While the focus early has been on the big tech names and the Dow components, several other companies are due out with results, including Abbott Laboratories (ABT:) , Gannett (GCI:) and Northern Trust (NTRS:) .

Later tonight, all eyes will be on eBay (EBAY:) and on several banks, including Washington Mutual (WM:) and Sovereign Bancorp (SOV:) , all of which will be posting earnings results after the bell.

In addition to the earnings flood, traders must contend with several important pieces of economic data. At 8:30 a.m. EDT, separate reports on the consumer price index and housing starts will come due. Later, at 2 p.m. EDT, the Federal Reserves beige book survey will be released.

Treasury prices were little changed ahead of the economic numbers. The 10-year note was flat in price, yielding 4.65%. The 30-year bond was off 1/32 in price to yield 4.91%.

Crude prices remained near record levels, but were off 3 cents at $87.58 a barrel. The dollar was generally weaker against other major currencies except for the yen.

Overseas markets were mostly higher. In Europe, London's FTSE 100 was up 0.7%, and Germany's Xetra Dax was climbing 0.1%. In Asia, Hong Kong's Hang Seng rallied 1.2%, while Japan's Nikkei 225 fell 1.1%.