16:20 ET [BRIEFING.COM] It was a bit of deja vu on Tuesday as rising oil prices and a weak financial sector (-1.9%) combined to knock the stock market for another loss. The difference from Monday was that the losses weren't as severe.
The latter point notwithstanding, the bulls didn't have a lot to cheer about on Tuesday. Oil prices topped $88 per barrel at their highs for the day before closing at $87.61 (+1.7%). Concerns about Turkey invading northern Iraq to strike the Kurds fueled the uptick in oil prices.
Once again, the surge in prices enabled the energy sector (+0.3%) to outperform. It didn't have any company on the winning side of things, though, as the remaining economic sectors finished with a loss.
Like Monday, the most influential drag was the financial sector, which was sent reeling following disappointing earnings reports from the likes of Wells Fargo (WFC 34.55, -1.40), KeyCorp (KEY 30.44, -1.91) and Regions Financial (RF 28.53, -0.60) that were accented with rising credit losses. Asset manager State Street (STT 74.68, +5.75) bucked the trend after easily surpassing analysts' consensus estimate for the third quarter, but its strength wasn't enough to overcome losses in the heavily-weighted banking complex.
Overall, the earnings reporting on Tuesday failed to live up to the market's expectations.
Dow component and Briefing.com Active Portfolio holding Johnson & Johnson (JNJ 65.07, -0.58) topped estimates by $0.07; however, investors were unimpressed that net earnings actually slipped 7.7% in the third quarter.
Separately, LM Ericsson (ERIC 31.33, -9.60) issued a nasty earnings warning that hit its stock hard and took down many other technology issues ahead of a key batch of reports Tuesday night from IBM (IBM 119.60, +1.57), Intel (INTC 25.48, -0.27) and Yahoo! (YHOO 26.69, -1.17).
Homebuilding was again cast in a negative light as a report noting homebuilder confidence fell to a record low in October and an update from D.R. Horton (DHI 12.86, -0.72) indicating net sales orders plunged 48% for the fourth quarter ended September 30th led to further selling of homebuilding stocks. Cautious commentary on the state of the housing sector from Fed Chairman Bernanke didn't help much either.
There wasn't a lot of economic data Tuesday. The Industrial Production report for September was the featured item. It showed a modest 0.1% increase for the month, but the trend in production is consistent with 2% real GDP growth and didn't change economic expectations.
In another release, it was reported that net foreign purchases of U.S. securities dropped by $69.3 billion in August, which marked the height of the credit market crisis. With the market rebounding sharply after the Fed rate cut in September, this number should show some solid improvement when the September report is released. It certainly didn't hurt the dollar Tuesday, which gained ground against a basket of other major currencies.
Dow -71.86 at 13912.94, Nasdaq -16.14 at 2763.91, S&P -10.18 at 1538.53
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