Published October 22, 2012
FOX Business: Capitalism Lives Here
The markets came under selling pressure for the third day in a row on Monday as worries swirled about corporate profits.
As of 3:00 p.m. ET, the Dow Jones Industrial Average fell 92.1 points, or 0.69%, to 13252, the S&P 500 dipped 9.6 points, or 0.66%, to 1424 and the Nasdaq Composite slumped 4.6 points, or 0.15%, to 3001.
The broad S&P 500 slid 1.9% during the final two trading days last week, while the tech-heavy Nasdaq tumbled 3.2%. Lackluster earnings from several companies, especially in the tech sector, weighed heavily sentiment.
The mood that was initially marked with cautious optimism evolved into pure caution as the day progressed on Monday.
The world's biggest heavy-machinery maker posted a third-quarter profit of $2.54 a share, beating estimates of $2.22 a share. Revenues came in at $16.45 billion, shy of estimates of $16.77 billion. The Dow component also slashed its full-year profit forecast to a range of $9 to $9.25 a share from $9.60. Analysts on average expected 2012 profits of $9.40 a share.
Oil giant BP (BP) agreed to sell its 50% stake in TNK-BP to Rosneft, an oil company that is majority owned by Russia's government, for $17.1 billion in cash plus shares. A group of businessmen that owns the other 50% also agreed to sell their half. The deal represents a shift to greater public ownership in Russia of its oil output.
On the European front, elections in Spain showed mixed results. Prime Minister Mariano Rajoy's Popular Party held control of the Galicia region, but fell behind two other parties in Basque Country. Rajoy has been working to cut the country's enormous public debt through various programs, including unpopular austerity measures. Analysts generally saw the outcome as in line with expectations.
The economic calendar is empty on Monday but is set to pick up later in the week. Traders will get reports on U.S. economic output, manufacturing activity in China and the monetary-policy statement from the Federal Reserve's two-day meeting.
Oil prices pushed higher. The benchmark crude oil contract traded in New York rose 60 cents, or 0.67%, to $90.65 a barrel. Wholesale New York Harbor gasoline gained 0.08% to $2.699 a gallon.
In metals, gold advanced $3.20, or 0.19%, to $1,727 a troy ounce.
The Euro Stoxx 50 gained 0.23% to 2548, the English FTSE 100 ticked up by 0.1% to 5902 and the German DAX slipped 0.13% to 7371.
In Asia, the Japanese Nikkei 225 rose 0.09% to 9011 and the Chinese Hang Seng climbed 0.68% to 21698.