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Coming off the worst week of the year, U.S. equities were mixed in the stock market today (Monday) at we kick off a big week for earnings.
In mid-afternoon trading, the Dow Jones Industrial Average was down 14.19, or 0.10%, at 14,533.32. The Standard & Poor's 500 Index gained 2.50, or 0.22%, to 1,558.93.
The Nasdaq was up 20.17, or 0.63%, to 3,226.23.
Gold, which lost 7%, or $105.70 a troy ounce last week, was down 20 cents, to $1,426.30.
Last week was the Dow's worst since June 1, 2012. The benchmark lost 2%, or 317.55 points, at 14,547.51. The S&P shed 33.6 points, or 2.1%, at 1,555.25. The Nasdaq fell 88.89 points, or 2.7%, to 3,206.06. After the Dow and S&P set consecutive records, investors have grown cautious.
Earnings continue to drive markets. Nearly 67% of companies that have reported Q1 earnings beat lowered forecasts, better that the usual 63%. But only 43% beat their revenue marks, well below the regular 62%, according to Thomson Reuters. Cost-cutting is making up for waning revenue growth – a trend analysts warn can't last forever.
Biggest News in the Stock Market Today
- Caterpillar Inc. (NYSE: CAT), deemed a bellwether for the global economy because of its size and scope, missed on both earnings and revenue. Income fell to $880 million, or $1.31 a share, down from $1.59 billion, or $2.37, a year earlier. Analysts were looking for $1.38 a share. The world's largest maker of mining equipment cut its full-year outlook "because our expectations for mining have decreased significantly." CAT shares have declined 10% year-to-date, making it the worst performer on the DJIA. Providing a cushion for shares Monday was the company's announcement it will buy back $1 billion of stock. Shares were trading at $82.50, up 2.57%.
- Microsoft Corp. (Nasdaq: MSFT) jumped 4.10%, to $30.99, after CNBC reported hedge fund ValueAct is set to take a $2 billion stake in the tech company. Such a move would make ValueAct Microsoft's largest shareholder.
- General Electric Co. (NYSE: GE) slid 2.41%, to $21.23, after JPMorgan Chase & Co. (NYSE: JPM) downgraded GE to "Neutral" with a $22 price target. The bank said GE has less visibility, that it no longer considers GE a "safety stock" and sees little upside to shares.
- Halliburton Co. (NYSE: HAL) easily topped estimates, thanks to a robust showing from its international business. Earnings came in at $0.67 a share, 9 cents ahead of forecasts. Shares climbed 5.24%, to $39.16.
- Power One Inc. (Nasdaq: PWER) soared 56.93%, to $6.34, after Swiss company ABB Ltd. (NYSE: ABB) agreed to acquire the solar power company in a $1 billion deal.
- Facebook Inc. (Nasdaq: FB) rose 1.14%, to $26.02, after data showed its new Home version garnered more than 500,000 downloads since its April 16 debut. But with more than 1 billion active Facebook members, the tally doesn't impress many. Big-money investors remain wary of FB shares. More than 70% of mangers who responded to Barron's Spring 2013 Big Money Poll gave Facebook a "thumbs-down."
Earnings on Tap
- Neftlix Inc. (Nasdaq: NFLX) rose 7.48%, to $175.59, ahead of its earnings release after the close. Hopes are the company will show a boost to its bottom line, thanks to its new series "House of Cards." Expectations are for 18 cents a share on $1.01 billion in sales.
- Apple Inc. (Nasdaq: AAPL) was up 1.77% Monday. Shares are trading more than $300 below its peak of $705, hit in mid-September. The iPhone maker reports Tuesday. Analysts expect earnings of $10.07 for the quarter, versus $12.30 earned in the same period a year ago.
- The Procter & Gamble Co. (NYSE: PG), which just boosted its quarterly dividend 7% to 60.15 cents a share, its 57th consecutive increase, reports Wednesday. The consensus is for 95 cents a share, a penny better than the year-ago quarter.
- Exxon Mobil Corp. (NYSE: XOM), the world's most valuable company, will report Q1 earnings Thursday. Analysts are looking for $2.04 a share, compared with $2.00 a year earlier.
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