Stocks sold off in afternoon trading to finish lower on the day, as Wall Street struggled with weakness in the financial, tech, and commodities sectors. At the bell, the Dow was off -121 points to end the day at 13,110. Meanwhile, the Nasdaq and S&P closed at 2,619 and 1,451, respectively. Oil prices fell on a strong inventory report with light, sweet crude ending at $93.43 per barrel. Treasury prices rose, while gold fell to $787.30 an ounce. The dollar climbed against the euro, but declined versus the yen.
On the economic front, the Labor Department reported that the Consumer Price Index (CPI) jumped by 0.3% in October, in line with estimates. Analysts claim surging oil prices played a key role in the rise. The Core CPI, which strips out food and energy costs, increased 0.2%, also in line with forecasts. The Labor Department also reported that the number of unemployment applications popped by 20,000 to 339,000. It was the highest total of jobless claims in a month and double what economists were predicting.
In earnings news, Tyco International (NYSE:
TYC -
News) posted a decline in net income to $181 million, or 36 cents per share, down from $1.25 billion, or $2.45 per share, last year. Results were impacted, in part, by restructuring and separation costs. Excluding one-time items, earnings totaled $285 million, or 57 cents per share, up 20% from $238 million, or 47 cents per share, a year ago. Quarterly revenue rose to $5.03 billion, up 9% from $4.62 billion. On average, analysts were looking for EPS of 55 cents per share on revenue of $4.97 billion. Shares of Tyco closed down -3.6% on the day. Subscribers can read our take on Tyco International in today's edition.
Shares of JC Penney's (NYSE:
JCP -
News) were down -5.1% at the bell after the company said third-quarter net income fell to $261 million, or $1.17 per share, down from $287 million, or $1.26 per share, last year. Excluding a one-time gain of 14 cents a share, the company would have earned $1.03 per share. Revenue fell -1.1% in the quarter to $4.73 billion. Analysts had forecasted earnings of $1.01 per share on revenue of $4.76 billion. The company also lowered its fourth-quarter guidance to be between $1.65-$1.80 per share, down from previous estimates of $2.41 per share.
In other corporate news, The Wall Street Journal reported today that Swiss financial giant UBS AG (NYSE:
UBS -
News) may write down -$7.1 billion in mortgage-related losses in the coming quarter. Shares of UBS were off -3.1% at the bell.
On the M&A front, Kraft Foods (NYSE:
KFT -
News) announced that it has agreed to sell its Post Cereals unit to private-label food maker Ralcorp Holdings in a stock deal worth nearly $1.7 billion. According to the terms released, Kraft will spin off its Post unit and assets to shareholders, which would then combine with Ralcorp. Following the integration, Kraft shareholders would own about 54% of the new entity, with current Ralcorp shareholdings owning approximately 46%.
By the BullMarket.com Staff
Labels: CPI, JCP, KFT, TYC, UBS
