Earnings and Economic Fears Control Stock Market Today

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The stock market today is struggling to post gains as more economic indicators and poor corporate earnings show the sluggishness of the economy.

The New York Fed's Empire State manufacturing index unexpectedly fell to negative 5.85 in August from positive 7.4 the prior month. This was the first time since October the index was negative and economists were expecting a reading of plus 5.

The Consumer Price Index was unchanged in July and the core CPI which excludes food and energy prices rose 0.1%. Although there have been recent gains in food commodity prices due to the severe Midwest drought, analysts say consumer prices may not be impacted for months.

Even though the overall CPI index was unchanged there were some changes in food categories. Prices increased 0.3% for meats, poultry, fish, and eggs, and declined 0.3% for fruits and vegetables. The price for white bread rose 2.3% in July, the largest gain since October, while potato prices fell 3.3%, the biggest drop since 2009.

Companies Making Headlines in the Stock Market Today

Deere & Co. (NYSE: DE), the world's largest agriculture producer, is the latest company to be affected by the ongoing drought as it lowered its fiscal year forecast.

For the fiscal year ending in October, Deere expects net income of $3.1 billion for the year, down from $3.35 billion predicted three months ago and below analysts' estimate of about $3.4 billion.

The estimates followed Deere's third-quarter earnings release that missed expectations even though revenue and earnings both increased in the double digits from a year ago.

Deere reported net income of $788 million, or $1.98 per share for its fiscal third quarter, compared with $712.3 million, or $1.69 per share for the year-earlier period. Analysts had projected earnings per share of $2.31 for the third quarter.

Revenue rose 15% to $9.59 billion, but below analysts' average prediction of $9.61 billion.

The missed earnings and lowered forecast drove DE stock down almost 8% by 11:30 a.m.

MORE: The drought isn't the only crisis that's hitting the agriculture business and other sectors. Find out more about the epidemic that could drastically change your life.

Target Corp. (NYSE: TGT) reported solid second-quarter results that beat analysts' estimates on both earnings and revenue.

The second-largest U.S. discount retailer posted net income for the second quarter ended July 28 of $704 million, or $1.06 a share. That mirrored last year's results of $704 million, or $1.03 EPS, and analysts on average were expecting earnings per share of $1.01.

Revenue for the quarter rose 3.3% to $16.78 billion, beating projections of $16.45 billion.

Looking ahead, Target forecasts full-year 2012 earnings to range from $4.65 to $4.85 per share, which would easily beat analysts' estimate of $4.30 per share for the year.

"The company is well positioned to deliver value to increasingly cost conscious consumers," Robert Summers, an analyst at Susquehanna Financial Group in New York, told Bloomberg News. "The fresh food and discount card programs will remain sales drivers."

Target stock has had a great run in 2012, up over 25% and on top of that it pays a dividend of 2.25%. Today TGT stock rose 1.85% in early trading.

Staples Inc. (Nasdaq: SPLS) cited weaker international demand as the reason its earnings fell 32% from the year-ago period and missed analysts' estimates.

The largest U.S. office supply chain announced second-quarter net income fell to $120.4 million, or 18 cents a share in the second quarter compared with $176.4 million, or 25 cents a share, a year earlier. That was below the 25 cents a share analysts had expected.

Revenue dropped 5.5% to $5.50 billion in the second quarter ended on July 28, well below analysts' average estimate of $5.72 billion. Same-store sales declined 2% in North America.

CEO Ron Sargent said customer traffic fell, average order size was flat, and sales of computers and core office supplies were particularly weak.

Staples said Wednesday it expects per-share earnings to rise in a low single-digit percentage on flat sales this year. That outlook is lower than the previously forecast high single-digit rise in per-share earnings on low single-digit sales growth.

The company cited stiffer competition from discount retailers and other office suppliers and overall weaker demand in North America, Europe and Australia.

"The weakness in Europe was not a surprise, but the deterioration in the U.S. was more significant than anticipated," Janney Capital Markets David Strasser told Reuters.

SPLS stock slipped more than 16 % in early trading.

The Dow Jones today was down 3 points, or 0.02%, and the S&P 500 was up 1.02 points, or 0.07% as of 11:30 a.m.

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