Bears Prevail Amid Solid Earnings

• By the tickerspy.com Staff
• On 4:41 pm EDT, Friday October 23, 2009

Despite several outstanding earnings reports, stocks were never able to gain any early traction and fell throughout the day. The market was pretty choppy this week, with a lot of seesaw action, and it appears investors are largely taking a more critical look at reports, or selling on the news. This could open up some buying opportunities if the market pulls back a bit.

The Dotcom Retailer Stocks Index was the top performing tickerspy Index on the day, led by Amazon.com (Nasdaq: AMZN - News) with a 27% gain.

Stocks tumbled to close out the week, with the Dow down -109 points to 9,972. The S&P fell -13 points to 1,080, while the Nasdaq dipped -11 points to 2,154. Oil slipped -69 cents to $80.50 a barrel, while gold inched down -$2.20 to $1,056.40 an ounce.

Turning to the economy, home resales climbed 9.4% to a seasonally adjusted annual rate of 5.57 million in September, well above the 5.35 million pace economists expected. The median price, meanwhile, was down -9% year over year and -1% month over month to $174,900.

In earnings news, Amazon shares soared 26.8% after the online retailer's earnings crushed analyst estimates. For Q3, the company earned $199 million, or 45 cents per share, up 69% from $118 million, or 27 cents per share, a year ago. Revenue climbed 28% to $5.45 billion. Analysts were looking for EPS of 33 cents on sales of $5.03 billion. For Q4, the company guided for revenue of between $8.125-$9.125 billion versus analyst estimates of $8.13 billion. Sixty-one Pro investors counted the stock among their top-15 holdings at the start of Q3.

Industrial conglomerate Honeywell (NYSE: HON - News) posted a Q3 profit of $608 million, or 80 cents per share, down -15% from $719 million, or 97 cents per share, a year earlier. Revenue dropped -17% to $7.7 billion. The Wall Street consensus was for EPS of 72 cents on sales of $7.88 billion. The company reiterated its full-year forecast for EPS of $2.85 on revenue of $31 billion. The stock fell -0.7%.

Shares of Chipotle Mexican Grill (NYSE: CMG - News) fell -8.0% despite the Mexican quick-serve restaurant easily beating bottom-line Q3 estimates. For the period ended September 30th, net income zoomed 77% higher to $34.5 million, or $1.08 per share, compared to a year-ago profit of $19.5 million, or 59 cents per share. Revenue jumped 14% to $387.6 million, while same-store sales rose 2.7%. Analysts were looking for EPS of 88 cents on sales of $388.2 million. The company reiterated its forecast for low single-digit percentage same-store sales growth for 2009, which disappointed investors. Seven Pro investors counted the stock among their top-15 holdings at the start of Q3.

Oil and gas service company Schlumberger (NYSE: SLB - News) saw its shares dip -5.0% after it said it expected a slow recovery in energy demand. For Q3, the company earned $787 million, or 65 cents per share, down sharply from $1.54 billion, or $1.25 a share, a year ago. Revenue fell -25% to $5.43 billion. Analysts were expecting EPS of 63 cents on sales of $5.48 billion.

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