CAT Disappoints but Bounces Back: Monday’s IP Market Recap

by Marc Bastow | October 22, 2012 5:09 pm

[1]Coming on the heels of Friday’s worst one-day decline since June, investors were hoping that a strong start to a week full of earnings releases might lighten the mood.

However, those hopes were dashed as Dow stalwart Caterpillar (NYSE:CAT[2]) opened the day with good earnings but a poor outlook[3], and with that backdrop the Dow struggled all day. At least by the close, it managed to get back to flat.

CAT, too, regained its footing during the day, finishing up nearly 1.5%. Still, Microsoft (NASDAQ:MSFT[4]) and General Electric (NYSE:GE[5]) continued struggles that started last week after weak earnings announcements. Microsoft ended down over 2% and GE just over 1.5% on Monday to limit the possibility of any meaningful Dow advance.

Making news with an after-hours earnings reports was Yahoo (NASDAQ:YHOO[6]), which posted a major milestone[7] for Marissa Meyer and her first earnings report as CEO. Yahoo’s third-quarter net income was $3.16 billion, or $2.64 cents per share, up from $293.3 billion, or 23 cents per share, in the same quarter in 2011. Analysts had forecast earnings of around 26 cents per share, according to Nasdaq.com. Shares were trading up nearly 3% after hours.

When all was said and done, the Nasdaq managed to gain 0.38% to finish at 3,016.96, while the S&P 500 eked out a fractional gain to close at 1,433.82. The Dow added just 2.38 points (0.02%), closing at 13,345.89.

Both Nasdaq and S&P were helped along by a nearly 4% rise at Apple (NASDAQ:AAPL[8]), as investors await the Cupertino giant’s earnings release due Thursday.

Shares of DISH Network (NASDAQ:DISH[9]) closed up over 2.5% after the company reached an agreement with Voom HD Holdings, which owns Cablevision (NYSE:CVC[10]) and AMC Networks (NASDAQ:AMCX[11]) on Sunday. Dish will pay $700 million in cash to settle a dispute over wireless multichannel video distribution and data service licenses.

British Petroleum’s (NYSE:BP[12]) discussions on a deal[13] that would result in the sale of 50% share of TNK-BP to Rosneft, a Russian state-owned oil and gas company, sent BP shares down around 1%.

Toymaker Hasbro (NYSE:HAS)[14] left investors with a frown as the stock dropped over 1% after he toymaker reported third-quarter earnings[15] that slipped from a year ago and revenue that fell short of forecasts. The company did predict higher 2013 revenues and earnings, excluding currency rate exchange problems. Last week, Hasbro competitor Mattel (NYSE:MAT[16]) reported higher third-quarter earnings[17] and revenues.

Ancestry.com (NASDAQ:ACOM[18]) shares soared over 7% after announcing plans to be taken over[19] by an investor group led by private equity firm Permira Advisors for $1.6 billion, or $32 per share.

Finally, shares of grocery chain SuperValu (NYSE:SVU[20]) rose nearly 45% on reports that private equity manager Cerberus Capital is strong-arming a number of banks to back a run at a leveraged buyout of the struggling firm.

Earnings releases on tap for Tuesday include a much-awaited date for Facebook (NASDAQ:FB[21]), Coach (NYSE:COH[22]), 3M (NYSE:MMM[23]), Netflix (NASDAQ:NFLX[24]) and RadioShack (NYSE:RSH[25]).

Three Up

• James River (NASDAQ:JRCC[26]): Up 6% (30 cents) to $5.30
• Questcor Pharmaceutical (NASDAQ:QCOR[27]): Up 4.96% ($1.24) to $26.23
  
• Alpha Natural (NYSE:ANR[28]): Up 5.24% (47 cents) to $9.44

Three Down

• Monster Beverage (NASDAQ:MNST[29]): Down 14.2% ($7.57) to $45.75
• Vivus (NASDAQ:VVUS[30]): Down 5.39% ($1.11) to $19.49
• Fortune Brands Home (NASDAQ:FBHS[31]): Down 4.2% ($1.23) to $28.08

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he was long AAPL, MSFT and GE.

Source URL: https://investorplace.com/2012/10/caterpillar-kicks-off-a-losing-day-mondays-ip-market-recap-cat-msft-ge-dish-cvc/

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