(CAT) Stock Market News for October 26, 2012 – Market News

Benchmarks added paltry gains following a batch of mixed earnings releases and positive domestic and international economic data. This was only the second day this week that benchmarks managed to register modest gains. Meanwhile, the U.S. Labor Department said the number of American filing for unemployment benefits has decreased. However, homebuilders stocks had a bad run following a decline in growth of home sales last month.

The Dow Jones Industrial Average (DJI) rose 0.2 % to close the day at 13,103.68. The Standard & Poor 500 (S&P 500) gained 0.3% to finish yesterday’s trading session at 1,412.97. The tech-laden Nasdaq Composite Index edged up 0.2% to end at 2,986.12. The fear-gauge CBOE Volatility Index (VIX) dropped 1.2% to settle at 18.12. Total volumes on the New York Stock Exchange were roughly 3.51 billion shares. Advancing stocks outpaced the decliners on the NYSE; as for 57% stocks that rose, 37% stocks moved lower.

The street began yesterday’s trading session on a positive note thanks to positive domestic and international economic data. The early part of trading saw the Dow climb by as much as 87 points. But the index fell in the later part of the day and managed only modest gains at the close. Investors remained cautious after a recent round of weak corporate earnings and lower profit and revenue projections from many blue-chips companies like Caterpillar Inc. (NYSE:CAT), 3M Co (NYSE:MMM) and Google In (NASDAQ:GOOG).

Meanwhile, the U.S. Department of Labor released initial claims data which revealed that initial claims decreased from the previous week. According to the report, the advance figure for seasonally adjusted initial claims decreased by 23,000 to 369,000 from the prior week’s 392,000 for the week ending October 20. This was below consensus estimates of 375,000.

Additionally, China’s Ministry of Industry and Information Technology said growth in factory output should pick up in the last three months of 2012. Speaking at a news conference, Zhu Hongren, ministry spokesman and chief engineer, said higher output growth will help China achieve its annual growth economic growth target of 7.5%.

Separately, most homebuilders stocks were down following news that the speed of growth in housing sales decreased last month. Pending home sales data released by the National Association of Realtors revealed that September pending home sales data increased slightly from the previous month. Pending home sales data increased by 0.3% to 99.5 in September from 99.2 in August. This was way below consensus estimates of 3.0. Lawrence Yun, National Association of Realtors’ chief economist said: “Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range. This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013.”

As a result, The SPDR S&P Homebuilders slipped 1.2% and to some extent eroded the broader markets’ gains. Stocks such as PulteGroup, Inc. (NYSE:PHM), Lennar Corporation (NYSE:LEN), KB Home (NYSE:KBH), D.R. Horton, Inc. (NYSE:DHI) and Meritage Homes Corporation (NYSE:MTH) tumbled 2.5%, 1.8%, 1.4%, 1.4% and 8.2%, respectively.

Meanwhile, the Consumer Staples sector had a couple of good earnings. The Procter & Gamble Company (NYSE:PG) reported better-than-expected results. The company’s shares surged 2.9% following the release. Procter & Gamble maintained its key earnings forecast for the year by cutting costs and focusing on key markets, products and countries.  Ingredion Inc (NYSE:INGR) shares jumped 7.9% after the company’s strong quarterly report.

The Consumer Staples Select Sector SPDR surged 0.6% boosted by these results.  Stocks such as Revlon, Inc. (NYSE:REV), Avon Products, Inc. (NYSE:AVP), Bunge Limited (NYSE:BG) and Seaboard Corporation (NYSEAMEX:SEB) rose 1.1%, 0.5%, 2.8% and 1.6%, respectively.

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