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After the Close - Stocks sold off sharply today on disappointing results from some industry leading companies, including McDonald’s (MCD - Free McDonald's Stock Report) and General Electric (GE - Free General Electric Stock Report), as well as letdowns from Google (GOOG) and Microsoft (MSFT - Free Microsoft Stock Report) yesterday.

In the case of General Electric, the nation’s leading conglomerate by market capitalization, earnings were in line with expectations, but revenues fell short of projections and the company offered up a cautious tone going forward.

Meanwhile, fast-food giant McDonald’s quarterly profits fell slightly, after a modest gain had been expected, and growth at restaurants open at least a year rose by just 1.2%, representing the slowest pace in years.

Bucking the downtrend were shares of Honeywell (HON), which benefited from a better-than-expected profit report.

Stocks didn’t get any help from Europe today, either. European shares fell this morning as regional leaders seemed to disagree on how best to assist the region’s debt-strapped banks. That marked a contrast from the hopeful tone emanating from across the Atlantic of late that did not interfere with the stock market rally on these shores.

At the close, the Dow Jones Industrial Average was down 205 points, or 1.5%, and the NASDAQ lost 67 points, or an even steeper 2.2%, in the midst of widespread selling.

The pain was felt among other asset classes, as well, with quotations for oil and gold falling notably.  

As might be expected with the swoon in stocks, investors headed for the perceived safety of U.S. government debt, with the yield on the 10-year Treasury falling from 1.83% to 1.77% (prices move inversely to yields).

The good news is that, with earnings season in full swing, stocks could get back on track next week if the next batch of corporate profits due to be released exceeds expectations. Dow components scheduled to report in the coming week include Caterpillar (CAT - Free Caterpillar Stock Report) on Monday; DuPont (DD - Free DuPont Stock Report), United Technologies (UTX - Free United Technologies Stock Report), and 3M (MMM - Free 3M Stock Report) on Tuesday; AT&T (T - Free AT&T Stock Report) and Boeing (BAFree Boeing Stock Report) on Wednesday; Procter & Gamble (PG - Free Procter & Gamble Stock Report) on Thursday; and Merck (MRK - Free Merck Stock Report) on Friday.

Also on the agenda are a few economic reports later in the week, such as New Home Sales for September on Wednesday, Durable Goods Orders for September on Thursday, and a closely watched reading on the nation’s third-quarter GDP on Friday.

In conclusion, today’s heavy selling wiped out most of the week’s gains. For the past five trading sessions combined, the Dow was up a slim 15 points, but the NASDAQ was off 38 points.   - Robert Mitkowski      

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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3:00 PM EDTThe selling continues on Wall Street as we near the end of the trading week, with the major equity indexes all near their respective lows for the session, as we get within an hour of the stock market's close.

All told, the Dow Jones Industrial Average, which has been pressing lower all day, is now off by 222 points; the Standard and Poor's 500 Index is down by 26 points; and the tech-heavy NASDAQ is losing ground to the tune of 70 points, easily eclipsing the other two averages on a proportionate basis. In all, the NASDAQ is now off by 2.3%. The S&P Mid-Cap 400 Index also is down sharply, giving back 16 points, or 1.6%, while the small-cap-dominated Russell 2000 is lower by an even steeper 19 points, or 2.3%. There is a diminishing taste for risk, as well, which is further affirmed by a better than 16% increase in the VIX volatility index, to 17.50. 

Highlighting the sharp retreat today is pressure on both the technology stocks and the restaurant issues, with earnings and, at times, revenue disappointments combining to take the measure of the recently resilient bulls.  

The selling, moreover, is very broadbased. with the advance-decline line on the NYSE showing losing stocks ahead of gaining issues by almost five-to-one, while the ratio on the NASDAQ is even a bit worse. Indeed, so widespread is the sudden rash of selling that the ratio of new lows to new highs on the NASDAQ is unfavorable, by a 78 to 38 count. It has been some time since that has been the case. There is simply no place for the bulls to hide today.   - Harvey S. Katz

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.  

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12:30 PM EDT - The U.S. stock market got off to a weak start this morning, and has been weakening further. As we pass the noon hour in New York, the Dow Jones Industrial Average is down 151 points (-1.1%); the broader S&P 500 Index is off 17 points (1.2%); and the NASDAQ, which is leading the market lower, is surrendering 52 points (-1.7%). Market breadth suggests widespread selling, as declining stocks are outnumbering advancers by 4 to 1 on the NYSE. Losses can be found in all of the major market sectors, with notable weakness in the technology, conglomerates, and basic materials issues. Some relative strength can be found in the utilities, as these high-yielding issues are down just slightly.

Technically, the S&P 500 Index has likely hit some resistance at the around 1,460, as it attempted once again to cross into new-high territory. From here the index may well move lower, and find some support at its 50-day moving average, located at 1,434. Notably, this level offered some support several sessions ago. Much will likely depend on the tone of the numerous earnings reports still to be released. Further, it will be crucial to watch traders’ behavior at the close of the session. So far, we have not seen panic selling, and some late day bargain hunting, if it materializes, certainly would be encouraging for Monday.  For now, sentiment has turned more skittish, as the VIX is rising about 8%, to more than 16. Flight-to-safety behavior can also be seen, as traders are buying Treasuries, sending the yield of the 10-year note down to 1.77%.

Meanwhile, economic news was light this morning. An existing home sales report for September came in better than expected. The recovery that is materializing in the housing sector should not be underestimated, and should lead to some real economic improvement in the year ahead.  Nonetheless, today this news was overlooked, as earnings took center stage. Specifically, Microsoft (MSFT Free Microsoft Stock Report) shares are trading lower after posting mixed quarterly results. McDonald’s (MCD Free McDonald’s Stock Report) stock is also down on weaker-than-expected figures. Also, General Electric (GE Free GE Stock Report) stock is slipping, after the industrial reported lackluster results. Among the high-priced issues, Google (GOOG) shares are off again; Apple (AAPL) stock is headed lower; but the real casualty among the high-quotation crowd is Chipotle (CMG).   - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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11:20 AM EDT - The stock market is losing ground rapidly, as we approach the two-hour mark of the trading day in New York, pushed lower by some disappointing earnings reports, most notably in the technology and restaurant space. A ho-hum issuance on sales of previously owned homes for September, in which sales dipped slightly on a month-to-month basis, but firmed up from the year earlier is not helping either, although the damage from that pedestrian metric is likely minimal, as housing, overall, continues to do quite well.

As for the stock market at this time, the Dow Jones Industrial Average is off by 137 points, or just over 1%, while the tech-heavy NASDAQ is dropping more substantially, just as it did yesterday, losing 45 points, or 1.5%. The Standard and Poor's 500 Index is also off notably, down 15 points, or just a tad over 1%. The small- and mid-cap indexes also are lower, with the S&P Mid-Cap 400 down by 10 points, or a bit more than 1%, as well, and the Russell 2000 Composite in the red to the tune of 10 points, or 1.2%. 

Finally, declining issues are ahead of advancing stocks by some three-to-one on both the New York Stock Exchange and the NASDAQ, with all 10 market groups in negative territory. There are few places to hide so far today.   - Harvey S. Katz

At the time of this article’s writing, the author did not have positions in any of the companies mentioned. 

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Stocks to Watch from The Survey -The third-quarter earnings season is in full swing with three Dow-30 components reporting today. Fast-food giant McDonald’s Corp. (MCD - Free McDonald's Stock Report) posted somewhat disappointing results, as currency headwinds and the still-sluggish global economy took a toll on demand. Leading software maker Microsoft Corp. (MSFT - Free Microsoft Stock Report) also logged a so-so performance in the September interim, as lackluster demand for PCs offset solid corporate adoption of its Windows 7 software suite. Industrial conglomerate General Electric (GE - Free GE Stock Report) met our share-net target in the latest period, but revenues came up a bit short, largely due to unfavorable exchange rate fluctuations. Perhaps more important, all three equities are trading down this morning.   – Sharif Abdou

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Before the Bell - The latest stock market rally ebbed yesterday, but did so in comparatively quiet and mild fashion, save for a sharp drop in Google (GOOG) shares and a further moderate retreat in the stock of International Business Machines (IBM Free IBM Stock Report). Overall, as noted, the setback was modest, with the Dow Jones Industrial Average easing by just eight points. In fact, that index of 30 blue chips would have scored another gain yesterday had it not been for a further material decline in IBM shares. The other indexes did worse, especially the NASDAQ, where the aforementioned Google is domiciled.

As for that iconic Internet name, the company, which had been on a tear, with its stock climbing to near $775 a share, really took it on the chin yesterday, replete with a lengthy trading halt during the session. The reason for the fireworks, which saw Google stock drop by better than 60 points in all, from the prior session's $755.49-a-share close to yesterday's final price of $695.00, was a disappointing earnings report. The data, initially scheduled for issuance after the market closed, was inadvertently released during the session because of a financial publisher's error, sent investors scurrying. The stock, in fact, fell as low as $678 a share before the halt, and then managed, after the resumption of trading, to pare the once near-$80-a-share decline to just over $60 a share.

At the same time, IBM, a better-than-$10 a share loser on Wednesday, shed another $5.67 a share in the latest session. Then, after the close another iconic tech name, Microsoft (MSFT Free Microsoft Stock Report), posted its latest quarterly results and that blue chip also disappointed some investors, with the issue selling off modestly in after-hours trading. That stock is also indicated a tad lower this morning. On the other hand, Google stock is poised to make up a little ground at the opening, as pre-market activity is now pointing to an initial trading price that is just north of $701 a share. Other stocks in the news yesterday included Verizon Communications (VZ - Free Verizon Stock Report), which pleased investors, with that stock rising yesterday, and Travelers Cos. (TRV - Free Travelers Stock Report), which also gained nicely on the day. And this morning, another Dow-30 component, General Electric (GE - Free GE Stock Report), has posted in-line quarterly results, but that showing was still apparently less than investors had been hoping for, as that stock is now indicated a bit to the downside in the pre-market.

Overall, the futures are suggesting a narrowly weaker start, with the Standard and Poor's 500 futures off by more than three points and the NASDAQ futures in the minus column by almost four points.

Of course, it isn't just about the parade of earnings reports, it is also about the economy, where yesterday we saw a surprising surge in jobless claims for the latest week. On the other hand, the Index of Leading Indicators rose more than expected in the most recent month. As for the day upcoming, at 10AM (EDT), the National Association of Realtors, a trade group, will issue its monthly data on sales of existing homes. Expectations there are for a slight retracement in September following results showing a two-year high in August. Behind this likely slight dip was a reported decline in the number of housing contracts signed in the latest month. There obviously is some correlation between the contracts signed and eventual housing sales. However, even with this presumptive dip in activity, the housing market remains on a tear, as Wednesday's data on housing starts and building permits showed, with both categories up notably in the past month.

So, the economy is, in general, pressing forward, albeit somewhat unevenly. And that has been a good part of the market's winning story recently. Now, it is on earnings, where, save for some tech giants, the news has been relatively good so far for the third quarter.  - Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.