Equities Update: Ben Talks, Dow Swings 200 Points Down

 |  Includes: AAPL, DBC, EMC, GLD, JJC, MS, SLV, WFC, YHOO
by: Midnight Trader

4:25 PM, Jul 21, 2010 --

  • NYSE down 88.9 (-1.3%) to 6,731.16
  • DJIA down 109 (-1%) to 10,121
  • S&P 500 down 13.9 (-1.3%) to 1,070
  • Nasdaq down 35.2 (-1.6%) to 2,187


  • Hang Seng up 1.1%
  • Nikkei down 0.23%
  • FTSE up 1.46%


(+) AAPL gaining after evening earnings.

(+) MS gaining after earnings.

(+) WFC gaining after earnings.

(+) KO lifted by its earnings results.

(+) CEPH boosts guidance.

(+) ABT beats by a penny on EPS, backs earnings view.

(+) CYT beats on Q2, raises estimates

(+) PSOF signs two contracts with Sinopec Corp.


(-) YHOO narrowly beats with EPS but disappoints with details;
downgraded this morning.

(-) EMC gives up early brief gain that followed earnings.

(-) JNPR beats with Q2, files shelf to sell stock.

(-) MO meets with earnings, raises EPS view.

(-) AMB sees year FFO below estimates


Stock averages end sharply lower, including a swing from a brief 100-point rise for the blue-chip Dow in morning trade to a finish down over 100 points. The averages close in the bottom of the day's range as Federal Reserve Chairman Ben Bernanke told lawmakers what Wall Street feared, that the economy has weakened.

In afternoon testimony to the Senate Banking Commitee, Bernanke described the economy as "unusually uncertain," yet stopped short of saying it looked ready to tip back into recession.

The Fed is still expecting the economy to expand this year, but the central bank has lowered its forecast for growth.

After a fairly strong, if fleeting start, stocks hovered near break-even mid-day. Choppy trading followed mixed earnings across a range of sectors and as Wall Street awaited the afternoon testimony from the Fed chief. Shares opened higher on the day after positive reports from Apple (NASDAQ:AAPL) and Morgan Stanley (NYSE:MS), in particular.

Apple gained after it reported Q3 revs of $15.7 bln, well ahead of the analyst mean of $14.7 bln. EPS was $3.51 per share, vs. the Street view of $3.11 per share. For Q4, the company expects revs of about $18 bln and EPS of about $3.44 per share. The Street is at $16.98 bln in revs and earnings of $3.81 per share.

Morgan Stanley (MS) was up after it reported income of $1.4 billion, or $0.80 per diluted share, from continuing operations applicable to Morgan Stanley for the quarter ended June 30, 2010, compared with a loss of $138 million, or $1.36 per diluted share, for the same period a year ago. Net revenues were $8.0 billion for the current quarter compared with $5.2 billion a year ago. The Street view was $0.46 per share in earnings on $7.9 bln in revenue.

Also in the financial sector, Wells Fargo (NYSE:WFC) gained after it reported Q2 EPS of $0.55 per share, better than the analyst mean of $0.48 per share on Thomson Reuters. Revs were $21.4 bln, vs. expectations of $21.39 bln.

On the downside, Yahoo (NASDAQ:YHOO) dropped as it reported Q2 revs of $1.6 bln, up 2% from year ago levels. EPS was $0.15, up from $0.10 per share in last year's quarter. The Street view was $1.15 bln in revenue, generally excluding Traffic Acquisition Costs, so this is not comparable. Analysts were expecting EPS of $0.14.

EMC (NYSE:EMC) reported Q2 revenue of $4.02 bln, better than the analyst mean of $3.98 bln on Thomson Reuters. Non-GAAP EPS was $0.28 per share, a penny ahead of the Street view. For 2010, the company expects to exceed its previous outlook of $16.5 bln in revenue and $1.18 per share in non-GAAP EPS. The Street is at $16.6 bln in revs and earnings of $1.20 per share.

Commodities were mixed as crude futures were sacked by inventory concerns and a general bearish sentiment throughout the day.

Crude-oil for August delivery ended down 1.3%, or $1.02, to $76.56 a barrel on the New York Mercantile Exchange.

In other energy futures, heating oil fell 1.7%, or $0.03, to $1.99 a gallon while natural gas fell 1.7%, or $0.08, to $4.51 per million British thermal units.

Meanwhile, gold futures were slightly higher as the metal traded in a narrow range ahead of Federal Reserve Chairman Ben Bernanke's comments.

Gold for August delivery was essentially flat up to $1,191.80 an ounce. In other metal futures, silver fell $0.15 to $17.65 a troy ounce while copper rose $7.15 to $3.07 a pound.