Stocks Positive as Earnings Buoy Investor Optimism on Economy

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Stocks are higher in mid-day trading as mostly positive earnings news overshadowed new economic data that showed industrial production down-shifted in September while still matching analysts' estimates.

Industrial production slipped 0.2% compared with August, but it was up 5.4% from September 2009, according to the Federal Reserve. Economists were looking for a 0.2% increase, according to a MarketWatch poll. The September slip was the first in six months. For Q3, industrial production rose at an annualized 4.8% rate, below the 7% growth rate during the first and second quarters this year.

Capacity utilization slipped to 74.7% from a 74.8% in August well below the 80.6% average between 1972 and 2009, according to MarketWatch.

Meanwhile, Citigroup ( C ) shares are higher after it reported Q3 earnings of $0.07 per share, a penny better than the Street view. Revenue was $20.7 billion, just shy of the analyst consensus of $21 billion on Thomson Reuters.

Also, Hasbro Inc. ( HAS ) is higher after it reported strong earnings results for the third quarter. The toymaker expects full-year earnings and revenue to increase from a year ago. The company posted net income of $155.2 million, or $1.09 a share, from $150.4 million, or 99 cents a share from a year ago. Sales rose 3% to $1.31 billion. Analysts polled by Thomson Reuters had expected earnings per share of $1.04 a share on revenue of $1.29 billion.

In other company news, AGA Medical ( AGAM ) shares are sharply higher and St. Jude ( STJ ) shares are modestly higher after the two companies announced that the companies have approved a definitive agreement under which St. Jude Medical will acquire all of the outstanding shares of AGA Medical for $20.80 per share in a cash and stock transaction valued at approximately $1.3 billion, including the assumption of approximately $225 million in outstanding debt.

Apple Inc. ( AAPL ) is higher ahead of its latest earnings results after the bell today, which most analysts expect to be strong. The maker of iPhones and iPads is also up on a report in the Los Angeles Times that the company will not be listed on the Dow Jones Industrial Average unless it splits its share price. Apple is currently listed on Nasdaq, but it is the third-largest U.S. company by market value.

Allergan ( AGN ) shares are higher after U.S. health regulators approved its anti-wrinkle treatment Botox for chronic migraine headaches, a move that could doble the annual sales of the drug to $2.3 billion, according to a Bloomberg report. "This is the most meaningful market expansion that the product has had since it was approved for cosmetic use," said David Amsellem, an analyst for Piper Jaffray, as quoted in the Bloomberg report.

Shares of News Corp ( NWSA ) and Cablevision Systems ( CVC ) are lower on news the two companies will resume talks over program fees to restore Fox signal to Cablevision's viewers in New York and Philadelphia. "No material progress was made" in recent talks between the two companies and they ""continue to remain far apart," said a Fox spokesman, as reported by Bloomberg, citing an emailed statement from the company.

H&R Block ( HRB ) declined after saying it might not be able to provide customers refund anticipation loans next year for tax season due to a dispute with HSBC Holdings ( HBC ), Bloomberg reported. The U.S. Internal Revenue Service said it cannot help banks underwrite tax refund loan, which have interest rates that lawmakers and certain consumer groups say are too high, the report said.

JC Penney ( JCP ) is down after its board adopted a stockholder protection rights agreement and declared a dividend of one right on each outstanding share of the company's common stock. The move comes 10 days after Pershing Square Capital Management said that it is the biggest investor in the department store chain.

BP plc ( BP ) ADRs are higher following news the British oil major sold assets in Venezuela as well as Vietnam to TNK-BP Holding OAO, a joint venture between the British oil giant and Russian business executives, for $1.8 billion. The money raised from the sale will be used by BP to deal with costs to clean up and compensate for the Gulf of Mexico spill.

In other earnings news, Halliburton Co ( HAL ) is down after the oilfield services provider reported that revenue outside of North America remained flat from the previous quarter. The company said overseas activity should pick up incrementally. Halliburton reported third quarter earnings rising to $544 million, or 64 cents a share, compared to $262 million, or 29 cents a share, a year ago. Revenue rose to $4.67 billion from $3.59 billion. Analysts polled by FactSet Research had expected earnings of 56 cents a share on revenue of $4.63 billion.

Commodities are mixed. December gold contracts fell $2, or 0.14%, to $1,370 an ounce while November crude contacts are up 1.63%, or $1.33, at $82.58 a barrel.

In energy ETFs, the United States Oil Fund ( USO ) is up 1.69% to $36.07 and the United States Natural Gas fund ( UNG ) is down 0.86% to $5.63.

In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.11% to $133.83. Market Vectors Gold Miners ( GDX ) is down 0.66% to $57.03. iShares Silver Trust ( SLV ) is up 0.25% to $23.81.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities


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