Dow Jones 30: Industrials Index

[setravis]

Friday, October 8, 2010
Overnight U.S. Stock News...

•   Dec S&Ps this morning are down -5.10 points ahead of this morning's Sep US payrolls report. The stock market yesterday erased an early rally and settled mixed (Dow -0.17%, S&P 500 -0.16%, Nasdaq Composite +0.13%). The Dow rallied to a 5-month high and the S&P 500 rise to a 4-3/4 month high, but both indexes shed their gains and settled lower. Bearish factors included (1) weakness in raw materials and energy producers after the dollar rebounded from an 8-1/2 month low, which prompted a fall in most commodities, (2) comments from Paul Volcker, former Fed Chairman and current adviser to President Obama, who said that he doesn't expect consumer spending to spur growth and that the US and other developed nations face the prospect of "prolonged unemployment," and (3) trepidation ahead of Friday's monthly payroll report which prompted long liquidation in stocks.

•   Bullish factors included (1) carry-over support from a rally in European stocks as concerns over Europe's sovereign-debt crisis eased when Spain's first bond auction since Moody's Investors Service cut its top Aaa credit rating was met with strong demand, (2) the unexpected decline in weekly initial US unemployment claims which fell to a 2-3/4 month low (-11,000 to 445,000 versus expectations of +2,000 to 455,000), and (3) the recommendation from Oppenheimer & Cp. that stocks are "attractive" and investors should stay in the market to reap the rewards from companies with record levels of cash on their balance sheets.

•   Alcoa (AA) rose 2.9% in European trading afte the largest US aluminum producer reported late yesterday Q3 earnings excluding certain items of 9 cents a shre, beating analysts' estimates of 5 cents, and it raised its global aluminum consumption estimate to 13% from 12%, citing higher demand from Brazil, Russia and India.

•   Motorola (MOT) slipped 2% in pre-market trading after its shares were cut to "hold" from "buy" at Citigroup, which cited the stock's outperformance since July and competition from other manufacturers.

[setravis]

Monday, October 11, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are up +2.30 points. The stock market last Friday whipsawed early and then moved higher the rest of the day and finished with moderate gains (Dow +0.53%, S&P 500 +0.61%, Nasdaq Composite +0.77%). The Dow rallied to a 5-1/4 month high, the S&P 500 rose to a 4-3/4 month high, and the Nasdaq posted a 1-week high. Bullish factors included (1) the Sep unemployment rate of unchanged at 9.6% versus expectations for a 0.1 point rise to 9.7%, (2) the slide in the 10-year T-note yield to a 1-3/4 year low of 2.33%, (3) increased speculation that the Fed will boost its quantitative easing measures in an attempt to stimulate the economy, (4) strength in raw materials and energy producers after commodity prices surged, and (5) the prediction from the manager of the $1.6 billion Wasatch-1st Source Income Equity Fund that investors are disposed to buy stocks before the Nov 2 congressional election because Republicans are likely to win a majority of the House of Representatives and push for less government intervention in markets.

•   Bearish factors included (1) the larger-than-expected loss of jobs in Sep nonfarm payrolls of -95,000 versus expectations of -2,000, (2) the lower-than-expected increase in Sep private payrolls of +64,000 (versus expectations of +75,000) and the unexpected decline in Sep manufacturing payrolls of -6,000 (versus expectations of +4,000), (3) concern about the sustainability of the economic recovery due to the overall weak US labor market in which the jobless rate has equaled or exceeded 9.5% for 14 consecutive months, the longest span of elevated joblessness since monthly records began in 1948, and (4) weakness in companies that use corn as an input after corn prices closed limit-up when the USDA cut its US corn production estimates.

•   Chesapeake (CHK) gained 2.2% in pre-market trading after China's Cnooc said it plans to buy a 33.3% $1.08 billion stake in Chespeake's 600,000 oil and gas leasehold acres in Eagle Ford.

•   Monsanto (MON) rose 3.9% in European trading after corn and soybean prices surged in overnight trade, which may boost demand for supplies from the world's largest seed company.

[setravis]

Tuesday, October 12, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are down -6.70 points. The stock market yesterday traded slightly higher throughout the day and finished with modest gains (Dow +0.04%, S&P 500 +0.01%, Nasdaq Composite +0.02%). The Nasdaq rallied to a 5-1/4 month high and the S&P 500 posted a 5-month high. Bullish factors included (1) carry-over support from a rally in European stock markets after ECB Governing Council member Mersch said that Euro-Zone economic data for Q3 point to "a positive surprise" in growth, along with reduced sovereign-debt concerns after credit-default swaps on Greek debt fell to a 4-month low when the IMF said it may be willing to extend bailout loans to Greece because Greek officials are doing "exactly what they need to do" to rein in spending and meet the benchmarks set out as a condition of aid, (2) increased speculation that the Fed will boost its quantitative easing measures in an attempt to stimulate the economy, and (3) the pre diction from Citigroup that US bank stocks will outperform in the near term as they either meet or exceed Q3 earnings estimates.

•   Bearish factors included (1) concerns that the action by the PBOC to reign in lending in China may restrain global economic growth after Reuters reported that the PBOC will raise the reserve requirement ratio for China's 6 biggest commercial banks by 50 bp to 17.5% for 2 months in an attempt to rein in liquidity, and (2) a survey from the National Association for Business Economics that shows economists as of Sep 21 project US GDP growth of 2.6% this year and next, below a May poll that predicted growth of 3.2% for both years, as a lack of jobs restrains consumer spending.

•   US Steel (X) fell 2.0% in European trading on carry-over weakness from other global steelmakers after South Korean rival Posco, the world's third-largest steelmaker, reported its first decline in earnings in four quarters.

[setravis]

Wednesday, October 13, 2010...

Overnight U.S. Stock News

**Dec S&Ps this morning are up +7.20 points after Intel, CSX and JPMorgan Chase all reported stellar earnings. The stock market yesterday traded lower into early afternoon when the market turned higher and firmed into the close to finish with modest gains (Dow +0.09%, S&P 500 +0.38%, Nasdaq Composite +0.65%). The S&P 500 posted a 5-month high, the Dow climbed to a 5-1/4 month high and the Nasdaq rose to a 5-1/2 month high. Bullish factors included (1) the minutes of the Sep 21 FOMC meeting that said the Fed was prepared to ease monetary policy "before long" to pump more cash into the economy to protect the recovery, (2) the prediction from Goldman Sachs that the Fed will increase its Treasury purchases at next month's policy meeting and help the US avoid the "very bad" economic outcome of a renewed recession, and (3) expectations for another strong quarter of corporate earnings as Q3 earnings season begins in earnest this week.

**Bearish factors included (1) concern that China's growth will cool and drag the down the global economy after the PBOC raised reserve requirements for its 6 biggest banks, (2) weakness in global steelmakers after South Korea's Posco, the world's third-largest steelmaker, cut its full-year profit forecast by 7% and reported its first decline in earnings in four quarters as rising commodity costs eroded earnings and raises concern that Asian economic growth may be slowing, and (3) the warning from Fed Vice Chairman Yellen that "it is conceivable that accommodative policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system."

**Intel (INTC) rose 2.4% in pre-market trading after the chipmaker late yesterday said Q4 sales will be $11.4 billion, plus or minus $400 million, beating analysts' estimates of $11.3 billion.

**CSX Corp. (CSX) jumped 3.2% in pre-market trading after the railroad said Q3 profit rose to $1.08 a share, higher than analysts' estimates of $1.04, as rising automotive shipments boosted rail volumes.

**JPMorgan Chase (JPM) climbed 2.5% in pre-market trading after it reported Q3 earnings of $1.01 a share, easily beating analysts' estimates of 88 cents.

[setravis]

Thursday, October 14, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are up +1.20 points. The stock market yesterday moved higher and finished with moderate gains (Dow +0.69%, S&P 500 +0.71%, Nasdaq Composite +0.96%). The S&P 500 and the Dow posted 5-1/4 month highs, while the Nasdaq soared to a 2-3/4 year high. Bullish factors included (1) carry-over support from a rally in Asian stock markets after China's foreign-exchange reserves increased by a record to $2.65 trillion at the end of Sep and China exports jumped 25% y/y in Sep, reinforcing optimism that China will continue to lead the global recovery, (2) strength in industrial stocks after CSX surged when it reported better-than-expected Q3 earnings, (3) a rally in raw-material producers and mining companies as gold rallied to a record high, silver climbed to a 30-year high and copper rose to a 27-month high, (4) data from Moody's Investors Service that shows US companies have strengthened their balance sheets by cutting costs and debt after de bt compared to earnings before interest, taxes, depreciation and amortization declined to 3.6 times at the end of Q2 2010 from a peak of 4.1 times in Q1 of 2009, while balance sheet liquidity improved to 10.4% at the end of Q2 from about 5% in Q1 of 2008, and (5) the prediction from Banyan Partners LLC that "the initial signs from the bellwethers are that this Q3 earnings season is going to be positive and help lift the overall stock market."

•   Bearish factors included (1) heightened concerns that a global sovereign-debt crisis will develop after Hayman Advisors LP predicted that Japan's economy may unravel in the next 2 to 3 years and prompt the nation to default on its debt and that Greece's economy is "done," (2) concern that the UK economy is losing momentum after Sep UK unemployment claims increased by the most in 8 months and Sep UK nationwide consumer confidence tumbled to a 1-1/2 year low, which may negatively affect the European economy, and (3) data from Investors Intelligence that shows US stock optimism is at its highest level since May, which may be construed as a bearish contrarian indicator.

•   Yahoo! (YHOO) surged 13% in pre-market trading after the WSJ reported that AOL and private equity investors including Silver Lake Partners and Blackstone Group LP may make a combined ofer to buy Yahoo.

[setravis]

Friday, October 15, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are down -2.10 points. The stock market yesterday moved lower into early afternoon but rebounded into the close and settled only slightly lower (Dow -0.01%, S&P 500 -0.36%, Nasdaq Composite -0.24%). Bearish factors included (1) the unexpected increase in weekly initial US unemployment claims (+13,000 to 462,000 versus expectations of unchanged at 445,000), (2) the larger-than-expected widening of the Aug US trade balance which is negative for US Q3 GDP (-$46.3 billion versus expectations of -$44.0 billion), (3) weakness in bank stocks and financial companies over growing legal scrutiny of home foreclosure practices after the National Association of Attorneys General said that all 50 states will conduct a coordinated inquiry into whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures, (4) the report from RealtyTrac that said lenders took over 102,134 properties in Sep, the h ighest monthly tally since RealtyTrac began tracking the data in 2005, and a sign that the US housing crisis is no where near an end, and (5) the fall in education stocks after Apollo Group, the biggest education company by enrollment, plunged when it withdrew its financial forecast for 2011, citing fewer new students and increased regulatory scrutiny.

•   Bullish factors included (1) the action from Germany's leading economic institutes to revise up their German growth forecasts for 2010 to 3.5% and to 2.0% for 2011, higher than their April estimates of 1.5% this year and 1.4% next year, which bodes well for growth in Germany, Europe's largest economy, and the sustainability of the global economic recovery, (2) strength in raw materials producers and mining companies after the fall in the dollar index to a 10-month low prompted rallies in most metals with gold climbing to a record high, silver to a 30-year high and copper to a 27-month high, and (3) speculation that Fed Chairman Bernanke will expand upon further easing measures by the Fed when he delivers a speech on monetary policy Friday.

•   Google (GOOG) surged 8.7% in pre-market trading after the company late yesterday reported Q3 profit excluding some items was $7.64 a share, exceeding analysts' estimates of $6.68 as sales were $5.48 billion, higher than analysts' estimates of $5.26 billion.

•   General Electic (GE) fell 2.7% in pre-market trading after it reported Q3 revenue of $35.9 billion, below market consensus estimates of $37.67 billion.

[setravis]

Monday, October 18, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are down -4.60 points. The stock market last Friday fluctuated on both sides of unchanged and finally finished mixed (Dow -0.29%, S&P 500 +0.20%, Nasdaq Composite +1.37%). The Nasdaq Composite surged to a 2-3/4 year high. Bullish factors included (1) the larger-than-expected increase in Sep retail sales and the upward revision to Aug (Sep +0.6% and +0.4% less autos versus expectations of +0.4% and +0.3% less autos and Aug revised up to +0.7% and +1.0% less autos from the previously reported +0.4% and +0.6% less autos), (2) the larger-than- expected increase in the Oct Empire manufacturing index which expanded at its fastest level in 4 months (+11.6 to 15.7 versus expectations of +1.9 to 6.0), (3) comments from Fed Chairman Bernanke that additional stimulus may be warranted because inflation is too low and unemployment is too high, (4) slack inflation pressures after the Sep core CPI posted its smallest year-over-year increase (+0.8% y /y) since 1961, and (5) strength in technology stocks led by Google which rallied sharply after reporting better-than-expected Q3 sales and profit.

•   Bearish factors included (1) the unexpected decline in the Oct US University of Michigan consumer confidence (-0.3 to 67.9 versus expectations of +0.8 to 69.0), (2) weakness in financial companies after US regulators said they are aggressively investigating whether employees of lenders including JPMorgan Chase, Bank of America and Ally Financial have falsified documents used in foreclosure proceedings, and (3) the warning from BNP Paribas that US banks embroiled in an investigation into faulty home foreclosures may be forced to scale back lending, which may push the economy back into recession.

[setravis]

Tuesday, October 19, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are down -6.80 points. The stock market yesterday moved higher and settled with modest gains (Dow +0.73%, S&P 500 +0.720%, Nasdaq Composite +0.48%). The S&P 500 and the Dow posted 5-1/2 month highs and the Nasdaq Composite surged to a 2-3/4 year high. Bullish factors included (1) a rally in financial companies after Citigroup reported Q3 earnings that beat street estimates and reduced concerns that home foreclosures will derail earnings, (2) strength in home builders after the larger-than-expected increase in the Oct NAHB housing market index (+3 to 16 versus expectations of +1 to 14), (3) speculation that the Fed will expand its quantitative easing program after Chicago Fed President Evans said the US is in a "bona fide liquidity trap" and needs "much more" monetary accommodation in the face of high unemployment and inflation that's too low, and comments from Boston Fed President Rosengren who said "insur ing against the risk of deflation may be much cheaper than" trying to eradicate it after it takes hold, (4) Goldman Sachs' prediction that the S&P 500 Index will increase 8.4% to 1.275 in the next 12 months as investors become less risk=averse and look ahead to stronger economic growth in 2012, and (5) upbeat earnings results so far as 18 of 24 S&P 500 companies that have reported Q3 earnings results have beaten analysts' per-share earnings estimates.

•   Bearish factors included (1) the unexpected fall in Sep industrial production which posted its first monthly decline in 15 months (-0.2% versus expectations of +0.2%), (2) the unexpected decline in Sep capacity utilization (-0.1 to 74.7% versus expectations of +0.1 to 74.8%), and (3) the warning from billionaire investor Kenneth Fisher who said that additional stimulus from the Fed is unnecessary and could cause the dollar to plunge and reduce demand for riskier assets such as US stocks.

•   Apple (AAPL) declined 5.0% in European trading after the company said profit will be about $4.80 a share in the current quarter, below analysts' estimates of $5.03, amid concern supply constraints will hamper iPad computer sales in the upcoming holiday season.

•   International Business Machines (IBM) fell 3.2% in pre-market trading even after the company boosted its full-year earnings guidance, as it reported a 7% decline in services signings to $11 billion in Q3. IBM's service business accounts for almost 60% of annual sales and more than 40% of its profit.

[setravis]

Wednesday, October 20, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are up +4.20 points. The stock market yesterday traded weaker throughout the day and finished sharply lower (Dow -1.48%, S&P 500 -1.59%, Nasdaq Composite -1.76%). Bearish factors included (1) the action by China to raise its benchmark lending and deposit rates by 25 bp for the first time since 2007, fueling speculation that China's action to raise interest rates will reduce economic growth and dampen the global economic recovery, (2) the slump in energy and raw materials producers after the dollar index strengthened to a 2-week high and prompted sharp declines in most commodities, (3) weakness in technology stocks after Apple reported iPad sales that missed estimates and IBM posted a drop in new service contracts, (4) concern that the US housing crisis will continue to be a drag on economic growth after Sep US building permits, a precursor to future home construction, unexpectedly fell to a 17-month low (-5.6% to 539,000 versus expecta tions of +0.7% to 575,000), (5) comments from EU Economic and Monetary Affairs Commissioner Rehn who said the recovery in the US "appears to be running out of steam," and (6) comments from New York Fed President Dudley who said that slowing growth, "weak" job creation and declining inflation add up to a "wholly unsatisfactory" US economy.

•   Bullish factors included (1) the unexpected increase in Sep US housing starts which rose to their best level in 5 months (+0.3% to 610,000 versus expectations of -3.0% to 580,000), (2) the outlook for further Fed stimulus after Atlanta Fed President Lockhart said he is "leaning in favor of support" for further quantitative easing as the economy remains in a "touch-and-go" mode, and (3) upbeat earnings results so far as 39 of the 47 S&P 500 companies that have reported Q3 earnings results since Oct 7 have beaten analysts' per-share earnings estimates.

•   Boston Scientific (BSX) rose 2.8% in pre-market trading after the second-biggest heart-device maker by sales reported a Q3 profit as sales of its key heart-rhythm devices matched the upper range of analysts' estimates.

•   Stryker (SYK) jumped 5.8% in pre-market trading after the company hiked its full-year earnings estimate for 2010 to $3.30 a share, higher than analysts' estimates of $3.26.

•   Eli Liliy (LLY) slipped 2.1% in pre-market trading after it failed to win approval for a second time from the FDA for a once-weekly vesion of the injectable diabetes drug Byetta.

[setravis]

Thursday, October 21, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are up +6.10 points. The stock market yesterday moved higher throughout the day and finished with moderate gains (Dow +1.18%, S&P 500 +1.05%, Nasdaq Composite +0.84%). Bullish factors included (1) the stronger-than-expected results from Boeing and Yahoo! which fueled optimism in Q3 corporate earnings, (2) the Fed's Beige Book which said the US economy expanded at a "modest" pace in Sep and early Oct with little sign of accelerating, which increases speculation the Fed will inject more money into the economy, (3) strength in materials and energy producers after the weak dollar prompted rallies in most commodities, and (4) a rally in airline stocks led by a jump in Delta Air Lines after the carrier was the first to post Q3 earning results which easily beat analysts' estimates.

•   Bearish factors included (1) the report from Fannie Mae's Economics & Mortgage Markets Analysis Group that predicts sluggish job creation and modest consumer spending will continue weak second-half US economic growth into 2011, (2) data from LPL Financial Corp. that shows for the first time in a quarter century that a 3-month gain in the S&P 500 Index failed to drive inflows into US mutual funds and ETFs, which suggests the recent rally in equities will lose momentum because of a "buyers' strike," and (3) renewed European sovereign debt concerns after credit-default swaps on Irish government bonds surged by 8 bp to 425.5 when Irish Finance Minister Lenihan said that economic growth is weaker than originally forecast.

•   EBay (EBAY) climbed over 7% in European trading after the company projected Q4 sales of $2.39 billion to $2.49 billion and profit of 45 cents to 48 cents a share, higher than analysts' projections for sales of $2.41 billion and earnings of 44 cents.

•   Netflix (NFLX) surged 10% in pre-market trading after the company projected Q4 profit of as much as 74 cents a share, beating analysts' estimates of 70 cents, and it raised its year-end subscriber forecast to as much as 19.7 million from up to 18.5 million.

[setravis]

Friday, October 22, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are slightly higher by +0.60 after positive earnings news from Honeywell and Verizon. The stock market yesterday moved higher into late morning and then shed most of its gains the remainder of the day and finished only slightly higher (Dow +0.35%, S&P 500 +0.18%, Nasdaq Composite +0.09%). The S&P 500 rose to a 5-1/2 month high, the Dow climbed to a 5-3/4 month high and the Nasdaq Composite posted a 2-3/4 year high. Bullish factors included (1) carry-over support from a rally in European markets after manufacturing activity in the Euro-Zone unexpectedly increased in Oct and the German government raised its GDP forecasts for Germany this year and next, (2) the larger-than-expected drop in weekly initial unemployment claims (-23,000 to 452,000 versus expectations of -7,000 to 455,000), (3) the increase in Sep leading indicators (+0.3% m/m) for the third consecutive month, which signals the economic recovery will extend into 2011, and (4) upbeat earnings results with 85% of the S&P 500 companies that have reported results since Oct 7 beating analysts' per-share earnings estimates.

•   Bearish factors included (1) weakness in bank stocks on heightened concern that flawed foreclosure procedures could worsen the earnings outlook for the industry as banks are forced to buy back soured mortgages, (2) the weaker-than-expected Oct Philadelphia Fed manufacturing index (+1.7 to 1.0 versus expectations of +2.7 to 2.0), and (3) weakness in raw materials and energy producers after a rebound in the dollar weighed on most commodities.

[setravis]

Tuesday, 26 Oct 2010...

Overnight U.S. Stock News

Dec S&Ps this morning are down -1.10 points. The stock market yesterday closed higher, although well off of its best levels: Dow +0.28%, S&P 500 +0.21%, Nasdaq Composite +0.46%. The S&P 500 and the Dow climbed to 5-3/4 month highs and the Nasdaq Composite surged to a 2-3/4 year high. Bullish factors included (1) reduced concerns of a trade war after G-20 nations pledged to avoid "competitive devaluation" of currencies following their weekend meeting in South Korea, (2) heightened speculation the Fed will announce further bond purchases to stimulate the economy when it meets next week, (3) strength in homebuilders after the larger-than-expected increase in Sep existing home sales (+10% to 4.53 million versus expectations of +4.1% to 4.30 million), (4) data from Bloomberg that shows M&A activity up +24% to $1.65 trillion this year from the same time last year as companies spend stockpiled cash to expand, and (5) upbeat earnings results with 86% of the S&P 500 companies that have posted Q3 earnings results since Oct 7 beating analysts' profit projections.


Bearish factors included (1) weakness in banks and financial companies after Fed Chairman Bernanke said the Fed and other regulators are "intensively" examining financial firms' home-foreclosure practices, and (2) the statement from Goldman Sachs that the number of people applying for jobless benefits is "not improving significantly."


US Steel (X) slipped 1.8% in European trading after weaker-than-expected Q3 earnings results from ArcelorMittal, the world's largest steelmaker, dragged the entire sector lower.


Dupont (DD) rose 1,5% in pre-market trading after the third-biggest chemical maker raised its forecast for full-year earnings excluding some items to about $3.10 a share, higher than its previous forecast of $2.90 to $3.05, and higher than analysts' estimates of $3.03 a share.

[setravis]

Wednesday, October 27, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are down -4.70 points. The stock market yesterday gyrated on both sides of unchanged and settled mixed: Dow +0.05%, S&P 500 +0.00%, Nasdaq Composite +0.26%. Bullish factors included (1) the larger-than-expected increase in Oct US consumer confidence (+1.6 to 50.2 versus expectations of +1.4 to 49.9), (2) the unexpected increase in the Aug FHFA house price index which gained for the first time in 3 months (+0.4% m/m versus expectations of -0.2% m/m), and (3) strength in technology stocks after IBM rallied when its board approved an additional $10 billion of stock repurchases to bring the total amount of money authorized for buybacks to $12.3 billion.

•   Bearish factors included (1) carry-over weakness from a decline in European stocks on renewed sovereign-debt concerns after the yield on Greek 10-year bonds surged 31 bp to 9.66% and the yield spread between 10-year Greek bonds and comparable German bunds widened to a 2-week high of 716 bp when the CEO of PIMCO said Greece is likely to default over the next 3 years because budget-cutting won't be enough to reduce the nation's debt burden, (2) the weaker-than-expected Aug S&P/CaseShiller composite-20 home price index (-0.2% m/m and +1.7% y/y versus expectations of -0.2% m/m and +2.1% y/y), and (3) weakness in steelmakers after US Steel unexpectedly posted a Q3 loss and ArcelorMittal, the world's largest steelmaker, forecast that its earnings in Q4 would drop as much as a third as prices fall and costs rise.

•   Alcoa (AA) slipped 1% in European trading after a stronger dollar prompted a decline in metal prices.

[setravis]

Thursday, October 28, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are up +1.70 points. The stock market yesterday traded weaker most of the day but a late session surge left the indexes settling mixed: Dow -0.39%, S&P 500 -0.27%, Nasdaq Composite +0.24%. Bearish factors included (1) reduced expectations for additional Fed easing measures after the WSJ reported that the Fed next week is likely to offer a program of Treasury purchases worth only a few hundred billion dollars over several months, lower than some market estimates of Fed bond purchases up to $2 trillion, (2) the unexpected decline in Sep durable goods orders ex transportation (-0.8% versus expectations of +0.5%), and (3) weakness in raw materials and energy producers after a stronger dollar initiated a decline in most commodities.

•   Bullish factors included (1) the stronger-than-expected Sep new home sales (+6.6% to 307,000 versus expectations of +4.2% to 300,000), (2) strength in chipmakers and technology stocks after Broadcom surged 12% when it reported Q3 sales that beat estimates, and (3) a stellar earnings season thus far with 85% of the companies in the S&P 500 that have reported earnings since Oct 7 beating analysts' predictions.

•   Las Vegas Sands (LVS) surged 11% in pre-market trading after it reported Q3 profit of 28 cents a share, well ahead of analysts' estimates of 24 cents.

•   Symantec (SYMC) gained 4.2% in European trading after it reported fiscal Q2 profit, excluding some items, rose to 34 cents a share, compared with analysts' estimates of 28 cents.

•   Western Digital (WDC) rose 1.6% in European trading after Barclays upgraded the shares to "overweight" from "equal weight."

•   Akamai Technologies (AKAM) jumped 3.4% in pre-market trading after it reported Q3 sales of $253.6 million, beating analysts' estimates of $249.6 million.

•   Allstate (ALL) slid 2.5% in pre-market trading after it reported Q3 profit, which excludes some investment results, of 83 cents a share, well below analysts' estimates of 96 cents.

[setravis]

Friday, October 29, 2010...

Overnight U.S. Stock News

•   Dec S&Ps this morning are down -5.60 points. The stock market yesterday moved lower into early afternoon and then pushed higher into the close and settled mixed: Dow -0.11%, S&P 500 +0.11%, Nasdaq Composite +0.16%. The Nasdaq posted a 2-3/4 year high. Bearish factors included (1) weakness in industrial companies after 3M cut its full-year profit forecast, (2) comments from ECB Executive Board member Stark who said the financial crisis "is not yet over and will have long-term implications on growth rates and potential" for years to come, and (3) long liquidation due to overall uncertainty about next week's mid-term elections and the FOMC meeting and what their effects will be on fiscal and monetary policies going forward.

•   Bullish factors included (1) the unexpected decline in weekly initial unemployment claims which tumbled to a 3-1/2 month low (-21,000 to 434,000 versus expectations of +3,000 to 455,000), (2) speculation that the Fed may be open to a large round of quantitative easing after the New York Fed released a survey to bond dealers on how the Fed's asset purchases will influence yields, and (3) an upbeat earnings season thus far with 82% of the 270 S&P 500 companies that have reported earnings since Oct 7 beating EPS estimates.

•   First Solar (FSLR) sank 7.4% in pre-market trading after the compnay reported better-than-expected Q3 profit, but said rising sales were partially offset by a drop in average selling prices. First Solar was then cut to "hold" from "buy" at Deutsche Bank AG, which cited declining margins as prices are cut.

•   Microsoft (MSFT) rose 3.1% in pre-market trading after the company late yesterday reported Q1 profit of 62 cents a share, beating analysts' estimates of 55 cents.