Equities Update: Last-Hour Reversal

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Includes: AABA, BA, CBY, MDLZ, MS, WDC
by: Midnight Trader

4:18 PM, Oct 21, 2009 --

  • NYSE down 51.1 (0.7%) to 7,107.21.
  • DJIA down 92 (0.9%) to 9,949.
  • S&P 500 down 9.7 (0.9%) to 1,096.30.
  • Nasdaq down 12 (0.6%) to 2,151.


GLOBAL SENTIMENT

  • Hang Seng down 0.30%
  • Nikkei down 0.03%
  • FTSE up 0.28%


DOWNSIDE MOVERS

(-) WFC lower despite earnings beat.

(-) AGEN announces negative vote on Oncophage marketing application.

(-) BA misses with revenue, warns for FY results.

(-) PLCM beats with results, guides for Q4 sales to beat.

(-) MO lower despite Q3 beat.

(-) LLY beats with results and lifts guidance.

UPSIDE MOVERS

(+) KEY loss widens, but capital-ratio improving.

(+) YHOO earnings improve on cost-cutting.

(+) MS tops with Q3 results.

(+) APCVZ gets FDA OK to market Chlorothiazide.

(+) NVAX secures collaboration for H1N1 vaccine.

(+) CRXX reports positive results for Synavive.

(+) USB tops with Q3 earnings.

(+) SLM seeing continued upside reaction to improved earnings out late Tuesday.

MARKET DIRECTION

Stock averages end in the red, as a late-day reversal capped a volatile session. Some support was found in banking and tech earnings, commodity gains and in the generally improved tone found in the Fed's Beige Book report. Wal-Mart's (NYSE:WMT) decline, which followed price cuts, tugged on the blue-chip DJIA.

Stocks did chop around near mid-day as well. Volatile trading is a reflection of shaken confidence that stocks can continue to sretch 2009 highs without something of a correction.

Stocks overcame early weakness as Wall Street chose to focus on upbeat bank and tech earnings amid a mixed batch of quarterly results overall. Airlines were among the issues to decline after their results.

Stocks maintained their upward tilt after the release of the Federal Reserve's Beige Book report, offering anecdotal evidence of economic improvement from around the country.

"Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered," the Fed report said.

Yahoo (YHOO) provided a lift after it beat the Street's profit and sales expectations, thanks to months of cost-cutting and restructuring and an uptick in Q3 advertising.

Also in the tech space, SanDisk (SNDK) jumped after the chip maker's results came in above Wall Street's forecasts.

In the financial sector, Morgan Stanley (NYSE:MS) reported net income for common shareholders of $498 million, or 38 cents a share. Analysts on average had forecast 27 cents a share, according to Thomson Reuters. Morgan Stanley shares were up more than 6% at mid-day. Wells Fargo (NYSE:WFC), among volume leaders, reported a Q3 profit of $2.64 billion, or 56 cents per share, after paying preferred dividends, up from $1.64 billion, or 49 cents per share, a year ago. Analysts, on average, were expecting earnings of 37 cents per share.

Cadbury (CBY) beat sales forecasts and raised targets, lifting shares and pressure on suitor Kraft (KFT) to come up with a bigger bid to win its takeover battle.

Boeing (NYSE:BA), a Dow component, limited upside for the industrials average. The company reported hefty Q3 losses on charges, totaling $3.62 billion, which led the company to cut its 2009 profit forecast to $1.35 to $1.55 per share, down from $4.70 to $5 per share. Analysts had predicted $1.53.

Crude oil futures finish at a one-year high above $81 a barrel. The dollar returned to 14-month lows. Gold closed higher, at $1,064.50 an ounce.

Crude oil reversed a slight loss in early trading after the government reported a smaller-than-expected build in U.S. crude inventories last week in the face of falling imports.

Crude inventories rose 1.3 million barrels in the week ended Oct. 16, the Energy Information Administration reported. Analysts surveyed by Platts had expected an increase of 2.2 million barrels. The EIA also reported that petroleum demand remained weak, with gasoline demand falling to the lowest level in more than five months.