By Anora Mahmudova and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch)--An attempted rebound by the U.S. stock
market Thursday fizzled out by the end of the session, as the main
benchmarks wrapped up another rocky trading day essentially
flat.
The start of Thursday's trading looked like the market was in
store for another bludgeoning with the main benchmark falling 1% at
the open. Nervousness after Wednesday's brutal ride marked much of
the day's general demeanor.
That's until James Bullard, president of the St. Louis Federal
Reserve, raised the possibility of extending bond purchases. The
bond purchases, which is a vestige a 2008 crisis-era plan intended
to stimulate the economy, is expected to end this month.
Bullard said the Federal Reserve should consider extending its
bond-buying program beyond October to see how the U.S. economic
outlook evolves. Bullard isn't a voting member this year of the
rate-setting FOMC, but investors appeared to take his comments to
heart, lifting markets higher.
While broader markets struggled to hold onto gains, small and
mid-cap companies rallied. The Russell 2000 rose 13 points, or
1.3%, to 1,085.83 and the small-cap index outperformed the S&P
500 this month. Recent strength has been attributed to buyers
getting attracted to relative cheapness of small stocks, after the
Russell 2000 recorded a 13% decline from peak to trough.
The S&P 500 (SPX) closed flat at 1,862.76, with energy
sector leading the gains.
The Dow Jones Industrial Average (DJI) slipped 24.5 points, or
0.2%, to 16,116.24, closing low for the sixth straight session.
The Nasdaq Composite (RIXF) ticked up 2 points to 4,217.39.
Jeffrey D. Saut, chief investment strategist at Raymond James
wrote in a note that Wednesday's roller-coaster session was due to
market participants' inability to manage their risk in July, when
he prematurely predicted that the market would see a 10%
correction.
"The time to raise cash was in the June--August time frame, when
the dollar took off and negative divergences mounted, not now," he
wrote.
In economic news, initial weekly jobless claims dropped to their
lowest level in more than 14 years, while industrial production
climbed 1% in September. Manufacturers in the Philadelphia region
expanded a bit more slowly in October but growth was still strong,
according to the Philadelphia Federal Reserve. A gauge of
confidence among home builders pulled back this month from a
nine-year high in September, falling five points to 54, according
to National Association of Home Builders/Wells Fargo data released
Thursday
Earnings: The results season continued at full speed on
Thursday, with a heavy lineup ahead of the opening bell.
Goldman Sachs (GS) reported third-quarter earnings of $4.57,
beating a consensus estimate from FactSet of $3.21, but reported
higher expenses. Shares fell 2.6%.
Delta Air Lines (DAL) rose 2.9% after reporting third-quarter
results.
Tobacco maker Philip Morris International (PM) reported
third-quarter profit that topped expectations, but cut its
full-year outlook citing the negative impact from the currency
markets. Shares rose 2%.
Toy maker Mattel Inc. (MAT) posted earnings and sales that fell
short of expectations as gross sales of its flagship Barbie doll
fell 21% world-wide. Shares dropped 3%.
UnitedHealth Group Inc. (UNH) reported third-quarter profit of
$1.63 a share, beating estimates of EPS of $1.53. Shares rose
3.9%.
Baker Hughes Inc. (BHI) shares dropped 3% after the
oil-field-services company reported earnings per share that fell
short of forecasts.
Movers and shakers: Netflix Inc. (NFLX) shares sank 19%, after
the video-streaming company on Wednesday said its new-subscriber
count fell short of its forecast of 3.69 million. It added 3.02
million new members during the quarter.
EBay Inc. (EBAY) lost 4.7% after the online retailer late
Wednesday reported third-quarter earnings fell to $673 million, or
54 cents a share, from $837 million, or 53 cents a share, in the
year-earlier period.
Apple Inc. (AAPL) shares fell 1.3%, as investors worried that
its new iPadAir2 may not revive sales. Read: Apple's new iPads will
be a hard sell.
Despite a continued decline in oil prices and a general drubbing
for the stock market, 10 oil stocks among the S&P 1500 rose at
least 7% on Wednesday.
Other markets: Europe's benchmark stock index dropped for an
eighth straight day, after closing 3.2% lower on Wednesday. Data
from Eurostat confirmed that inflation fell to an almost five-year
low of 0.3% in September. Read: European stocks slip into
correction amid 'perfect storm.'
Asian markets closed mostly in the red, with the Nikkei falling
2.2%. Crude-oil futures (CLX4) on Thursday bounced from a two-year
low and from a dip under $80 a barrel, scoring their highest
one-day dollar gain in three weeks. Gold futures settled lower,
while the dollar weakened against yen.
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