2012 Stock Predictions and Outlook
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Dow Jones Industrial Average closed down 31 points, or 0.2%, to 13,173, bouncing off a low of 13,120. The blue-chip index, which has fallen in the first two sessions of this week, started the day up 8.1% so far in 2012. Breadth was even within the Dow. The biggest percentage decliners were Caterpillar ( CAT), Hewlett-Packard ( HPQ) and Intel ( INTC). Blue-chip gainers included Home Depot ( HD), DuPont ( DD) and Alcoa ( AA). Hewlett-Packard reported earnings of $1 a share on revenue of $29.7 billion in the July quarter. The average estimate of analysts polled by Thomson Reuters called for 98 cents a share on $30.1 billion. HP was gaining 2.4% in after-hours trading, after it lost 3.7% in the regular session. The S&P 500, which hit its highest level since May 2008 on Tuesday, finished up less than a point at 1,413.49. The Nasdaq rose 6 points, or 0.2%, at 3,074, regaining roughly 20 points off its worst levels of the day. Stocks were weak for the much of Wednesday's session, extending this week's losses, as investors grew cautious ahead of the release of the minutes and continued to take profits. Early trading was also driven by housing data coming in slightly below expectations, with the National Association of Realtors saying existing-home sales for July came in at a seasonally adjusted rate of 4.47 million versus economists' expectations of 4.52 million. A widening trade deficit in Japan and the uncertainty presented by Greece's efforts this week to extend deadlines to fulfill fiscal targets tied to its receipt of additional bailout funds also added to the risk-off mood that predominated for much of the day. Decliners were running ahead of advancers by a 1.5-to-1 ratio on the New York Stock Exchange and 1.7-to-1 on the Nasdaq. Continuing with the low volume trend in August, only 3.05 billion shares traded on the Big Board and just 1.46 billion were in play on the Nasdaq. The weakest sectors in the broad market were capital goods, consumer non-cyclicals and conglomerates. The basic materials and services sectors were positive. The FTSE in London closed down 1.42% and the DAX in Germany settled lost 1.01%. The Hong Kong Hang Seng index closed 1.06% lower and the Nikkei in Japan fell 0.27%. October crude oil futures closed up 42 cents at $97.26 a barrel while December gold futures pulled back after Tuesday's dramatic spike higher, to settle down $2.40 at $1,640.50 an ounce. Gold jumped again though in the wake of the Fed minutes. The benchmark 10-year Treasury was surging 30/32, diluting the yield to 1.699%. The greenback was down 0.4, according to the dollar index.
On the corporate front, Toll Bros. ( TOL), the Horsham, Pa.-based luxury-home builder, reported fiscal third-quarter earnings of $61.6 million, or 36 cents a share, on revenue of $554.3 million, coming in ahead of the average estimate of analysts polled by Thomson Reuters for a profit of 18 cents a share on revenue of $510.1 million. Shares gained 3.8%. American Eagle ( AEO), the Pittsburgh-based fashion apparel retailer, reported an in-line profit for its fiscal second quarter and lifted its full-year earnings outlook early Wednesday. Shares closed higher by 6.2%. Shares of the San Francisco-based specialty retailer Williams-Sonoma ( WSM) surged 11.6% after the company beat Wall Street's expectations for its fiscal second-quarter results and lifted its outlook for the full year. Best Buy's ( BBY) stock dipped 1.1% after Wedbush Morgan downgraded the Minneapolis-based consumer electronics retailer to "underperform" and cut its 12-month price target to $14.50 from $20, citing an "unclear outlook, deteriorating fundamentals and a new CEO who lacks retail experience." Express ( EXPR) shares plunged 11.1% after the Columbus, Ohio-based specialty apparel and accessories retailer slashed the company's full-year profit outlook for the second time following the release of worse-than-expected quarterly sales. Chico's ( CHS), the Fort Myers, Florida-based specialty retailer of private branded, casual-to-dressy apparel, watched its shares pop 6.6% after the company reported second-quarter net income that leaped 22% and beat expectations as sales broadly increased across the brands.
--Written by Andrea Tse and Joe Deaux in New York. >To contact the writer of this article, click here: Andrea Tse.