Wednesday Wrap - Dow -0.01%, S&P -0.24%, NQ -0.88%

by: Roy Mehta

Though some would disagree, anyone who watched the markets today would probably say we are lucky to finish with minimal losses after horrible earnings from Merrill Lynch and more bad news in housing. The Dow Jones Industrial Average lost 0.98 points (-0.01%), Standard & Poor's 500 index ended 3.71 points lower (-0.24%), and the Nasdaq finished down 24.5 points (-0.88%), despite being down 2.75% in the early afternoon. Volume was strong at 1.57 billion shares, and decliners beat advancers by a ratio of about 3:2.

The day started negative with disappointing earnings from a couple giants. Merrill Lynch (-5.8%) dropped after reporting a $7.9 billion write-off in its third-quarter earnings (full story). Amazon (-12.0%) announced it beat estimates, but fell because of declining margins (full story). Chipmakers Altera (-15.7%) and Broadcom (-17.0%) both reported disappointing earnings as well. Further fueling the sell-off was a September existing home sales number that was well below expectations (full story). The 10-year U.S. Treasury climbed 16/32 in price to yield 16/32.

The financial sector (-0.8%) had a volatile session after Merrill's earnings, but tech (-1.11%) and basic materials (-1.11%) had the weakest days. Late in the day, Microsoft (+1.13% during regular hours) jumped another 0.7% after it announced it acquired a small stake in Facebook (full story). Cablevision (-3.3%) announced its shareholder rejected the Dolan Family's take-over bid for the company (full story). Finally, the department of energy announced lower than expected inventories, causing crude to jump $1.83 to $87.10/barel.

Tomorrow Durable Goods Order (8:30 AM). Jobless Claims (8:30 AM), and New Home Sales (10:00 AM) will be released. Look for more market volatility, as Merrill showed us today Wall Street may not be done writing-off its mistakes from last quarter.

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