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Stocks Edge Lower After Release of Fed Policy Statement

Dan Berman
Hot Stock Minute

Stocks retreated today from record highs. They edged lower as the Fed kept its bond buying program in place, but made optimistic statements about the U.S. economy that surprised investors. Meanwhile, there were several more economic reports to suggest the economy is still soft enough to warrant a continuation of stimulus programs. The ADP payroll report for October measured 130,000 new jobs created for the month. That beat expectations of 125,000 but was still short of last month's figure, even though it was revised downward 21,000 jobs to 145,000. Meanwhile, the Labor Department says the consumer price index rose .2% for September, matching expectations. The modest rise increase suggests the stimulus program is not spiking inflation.

POLL: Would it be wise for the Fed to start tapering its stimulus now?

General Motors (GM) rose more than 3% on its earnings. The automaker beat on the bottom line, reporting earnings of 96-cents a share when expectations were for 94-cents. Revenues, however, were shy of the consensus at $39-billion even when estimates had been for $39.49-billion. The results were lifted by stronger profit margins in North America. Losses in Europe narrowed to $214-million during the period from $487-million a year ago. Still, overall profits were down 6% year over year.

Comcast (CMCSA) also beat on the bottom line, earning 65-cents a share. That was a nickel better than estimates though revenues narrowly missed the consensus at $16.15-billion compared to $16.25-billion. Figures were down from last year when the company's NBCUniversal unit carried the Olympics. The company made up some of the slack adding 1.3-million internet customers for a total of 20.3-million.

Sodastream (SODA) fell as much as 12% in the premarket but then pared its losses on a mixed earnings report. The company beat estimates on the bottom line posting profits of 76-cents a share when the consensus had been for 72-cents. However, revenue missed expectations at $144.6-million versus $145.2-million. Sales were actually 28.5% higher than a year ago, but the report suggests Sodastream's growth is slowing. Last year revenues climbed 32%. For now Sodastream is maintaining its outlook.

Dreamworks (DWA) was one of the day's biggest winners, surging 17% today. The studio earned 12-cents a share, when analysts had been looking for a break-even quarter. Revenue also topped estimates at $154.5-million versus a consensus of $139.5-million. The quarter was helped by "Rise of the Guardians," a pay-TV show. It helped offset the animated movie "Turbo" which underperformed.

Buffalo Wild Wings (BWLD) hit a new all-time high today with shares nearly 9% on the day. Both sales and profits were up for the quarter as the company moves forward with expansion plans. The business says it has also been benefiting from falling chicken prices. Earnings came in at 95-cents a share, a dime better than expectations. Revenues were $315.8-million when the consensus had been for $312.1-million.

Networking social network LinkedIn (LNKD) shed 9% today on its report which was released after yesterday's closing bell. The company easily beat estimates for the quarter with earnings of 39-cents a share on $393-million in revenue. Expectations had been for earning of 32-cents a share on $385-million. Moving forward, LinkedIn lowered its guidance for the current quarter and the year. Prior to today's losses LinkedIn shares were up 119% year-to-date.

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