PortfolioCrafter - Market Commentary 10/25/05
October 25th, 2005 / 8:25 pm / by portfoliocrafter
The Wall Street showed resilience today as stocks closed with just modest losses. With oil prices back above $62 a barrel and a spate of disappointing third-quarter earnings results, investors were unable to manintain the advances made on Monday after President Bush tapped White House adviser Ben Bernanke to replace Alan Greenspan as Federal Reserve chairman.
The Dow Jones industrial average lost 7.13 points or 0.1% at 10,377.87, the broader Standard & Poor 500 index lost 2.84 points or 0.2% at 196.54, and the Nasdaq composite lost 6.38 or around 0.3% to 2,109.45.
Amongst other indices, the Amex Oil index added about 1.9%, the Dow Jones Home Construction Index lost 1.7%, and the Philadelphia Semiconductor Index lost 1%.
The market breadth was negative. On the New York Stock Exchange, losers beat winners by more than three to two on volume of 1.71 billion shares. On the Nasdaq, decliners topped advancers three to two as 1.63 billion shares traded hands.
Disappointing earnings and forecast set the market gloom. Texas Instruments sank 7.7% to $28.55 after the company said that its fourth-quarter sales numbers would fall short of forecasts. This was despite reporting a 12% in third quarter income. Altera also issued a fourth-quarter revenue forecast that fell short of expectations, which led the share to lose 7.3%. PortalPlayer lost nearly 28% after saying it would increase outstanding shares by 18 percent, by diluting the value of shares currently held. Lexmark International slipped 6.5% on news that third-quarter earnings and revenue fell by more than 50% from a year ago. Stock of eBay fell 3.6% on reports that Goggle may be launching a product to compete with eBay’s PayPal. Cablevision slumped 12.7% after the company’s controlling shareholders withdrew their offer to take the company private. Shares of Northrop Grumman lost nearly 2% and closed at $52.92. Fellow defense contractor Lockheed Martin also fell 1.8% to $61.23. This is despite reporting a 39% rise in quarterly earnings.
Amongst gainer, DuPont gained around 3% at $40.80. The chemical giant reported a third-quarter loss of $82 million and lowered fourth-quarter earnings estimates. But it also announced a $5 billion buyback. Honeywell also rose early 1.7% on upgradation by the Deutsche Bank. However, the stock lost its gains and closed down 0.5% at $33.72.
U.S. light crude oil for December delivery jumped $2.12, or 3.5%, to settle at $62.44 a barrel on the New York Mercantile Exchange. Natural gas also climbed $1.334 to $14.338 per million BTU.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
