Dow: 13,346, +2 (+0.02%) S&P 500: 1,434, +1 (+0.04%)
No riots in Europe? No US econ data? No LiLo vehicular manslaughter incidents? No problem. Monday was all about corporate news as the quarterly earnings season began its 3rd fun-filled week. Stocks dropped big last Friday after McDonald’s, Microsoft, and General Electric earnings missed forecasts, leaving investors with the whole weekend to regroup. Whatever Lululemon-saturated yoga class they piled into, it kind of worked – Wall Street managed to close its eyes, sing kumbaya, ignore mixed earnings news from construction equipment maker Caterpillar and the Dow squeaked out a 2-point gain.
CAT announces majorly impressive earnings…
Caterpillar (CAT) released another batch of warm, aromatic earnings that make you feel warm and fuzzy inside (our bellies appreciate these CAT earnings as we prepare for the cold winter). CAT’s earnings have improved every quarter like a clockwork since ’09 as they eat up smaller companies through acquisitions and dominate the global construction machinery business. Today’s 3rd Q earnings are no exception: net earnings (profit) improved by 49% versus last year (albiet enhanced by a “one-off” hugely lucrative sale of a CAT subsidiary, similar to Britney Spears’ one-off donation of her blond mane to charity, but less insane. On a “normalized” basis, profits were still solidly up). CAT’s stock climbed 1.5%.
…but sobering outlook for slowing growth creeps investors across Wall Street
Despite these profits, markets focused closely on CAT’s outlook for the rest of 2012 and for 2013: Orders for new CAT equipment are down, and CAT dealers are worried about future sales while the global economy cools down. CAT’s CEO said he expects 2013 revenues to be somewhere between 5% lower and 5% higher than this year. CAT’s a bellwether company (investors look up to it like Mufasa…or any character voiced by James Earl Jones) for global industrial growth, so this very mediocre outlook reinforced investors’ fears of slowing growth (expect a slow-chugging economy).
Monster gets hit by FDA, Ancestry.com might be brought private
Despite a sterling reputation as the “Axe Bodyspray” of alcoholic energy drinks, Monster Beverage (MNST) does in fact have an Achilles heel. Monster was the biggest loser in the S&P 500 stock index, dropping 14% after an FDA report noted that its freaky concoctions might have been tied to 5 deaths last year. Seriously. Sobering. Ancestry.com (ACOM) jumped over 7% on reports a European private equity firm would buy all the shares to make the public company private for around $1.6 billion (not bad for a company that most people flock to when they could just call a grandparent).
- After shockingly falling over 11% since its iPhone 5 release following good-but-not-insanely-good sales, Apple finally jumped 4% today as investors bought the world’s largest company by market capitalization back up – iPad Mini rumors? Analysts think Apple will reveal it tomorrow.
- The Fed’s 2-day rate setting meeting begins
- Earnings: Facebook, 3M, Netflix…
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