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Stock Market News for October 23, 2012

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Benchmarks rebounded from a heavy slump in the final hour of trading and finished with paltry gains on Monday. The Dow and S&P 500 ended almost flat, whereas the Nasdaq had a decent run. With investors worried about how sluggish global economic conditions are affecting corporates, benchmarks are spending most of their days in the red. Meanwhile, Caterpillar managed to beat analysts’ estimates on its bottom line, but its top line fell short. The technology sector was the leading gainer among the S&P 500 industry groups.

The Dow Jones Industrial Average (:DJI) rose 0.02% to close the day at 13,345.89. The Standard & Poor 500 (S&P 500) climbed 0.04% to finish yesterday’s trading session at 1,433.82. The tech-laden Nasdaq Composite Index added 0.4% to end at 3,016.96. The fear-gauge CBOE Volatility Index (:VIX) lost 2.6% to settle at 16.62. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.8 billion shares, lower than the year-to-date daily average of 6.52 billion shares. The decliners on the New York Stock Exchange outpaced advancing stocks; as for 46% stocks that gained, 50% stocks closed lower.

Benchmarks struggled to find a specific direction on Monday. During mid-afternoon, the blue-chip index had fallen by as much as 108 points before rallying in the final hour. Benchmarks rallied in the final session, despite the absence of any major news that could affect them. Investors were worried about corporate revenues and macroeconomic headwinds have already had a negative impact on certain industry heavyweights.

Last Friday, markets were battered following weak corporate results. Microsoft Corporation, McDonald's Corporation and General Electric Company had reported discouraging results and almost all of them blamed certain macroeconomic headwinds. Shares of Microsoft, McDonald's and General Electric had slumped 2.9%, 4.5% and 3.4%, respectively last Friday. Also, Advanced Micro Devices, Inc. (NYSE:AMD) had announced late on Thursday that its revenue slumped 10.2% sequentially and 24.9% year over year. The negative sentiment spilled on to Monday as well and affected the markets.

On Monday, corporate results continued to be weak. Hasbro, Inc. (NASDAQ:HAS), V.F. Corporation (NYSE:VFC) and SunTrust Banks, Inc. (NYSE:STI) posted their quarterly results which came in below analysts’ estimates. The stocks tumbled 1.7%, 4.4% and 3.5%, respectively.

Meanwhile, Caterpillar Inc. (NYSE:CAT) posted quarterly earnings that surpassed analysts’ estimates. However, the industry bellwether’s revenue fell short of expectations. Also, Caterpillar slashed its 2012 forecasts, citing weak global demand. It was the second time that Caterpillar slashed estimates this year. Nonetheless, Caterpillar’s stock surged 1.5%, recovering from its initial losses.

Meanwhile, technology bellwether Apple Inc. (NASDAQ:AAPL) jumped 4.0% after announcing that the company will release a smaller iPad on Tuesday. The smaller iPad will compete with Amazon.com, Inc’s. (NASDAQ:AMZN) Kindle Fire and Google Inc’s (NASDAQ:GOOG) Nexus 7. This was Apple’s biggest gain in almost five months. The company is schedule to report its earnings on Thursday. Meanwhile, investors awaited results from Yahoo! Inc. (NASDAQ:YHOO) and Texas Instruments Incorporated (NASDAQ:TXN).

The 4% jump in Apple also helped Nasdaq finish in the green. Also, the technology sector was guided back to the positive zone after three days of consecutive losses. The Technology SPDR (ETF) jumped 0.7%. Stocks such as Hewlett-Packard Company (NYSE:HPQ), Dell Inc. (NASDAQ:DELL), Digi International Inc., Synaptics, Incorporated and EMC Corporation (NYSE:EMC) surged 1.6%, 0.4%, 3.0%, 1.9% and 1.9%, respectively.

The Energy Select Sector SPDR was the major loser, slipping 0.3%. Stocks such as Chevron Corporation (NYSE:CVX), BP plc (NYSE:BP), Marathon Oil Corporation, Suncor Energy Inc. and ConocoPhillips lost 0.6%, 1.0%, 1.6%, 1.3% and 0.7%, respectively.

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