Stocks End Higher in October

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Stocks rallied after an expected quarter point rate cut by the Federal Reserve Board, but not after serious see-sawing, as the earnings season started in earnest.

December 01, 2007

Stocks rallied after an expected quarter point rate cut by the Federal Reserve Board, but not after serious see-sawing, as the earnings season started in earnest. As of Oct. 31, a report showed the economy growing at a 3.9 percent clip over the summer.

Some analysts cautioned investors not to expect another rate cut any time soon. "I think that the market finally realized after the initial drop-off that the Fed is saying, 'Look, we're going to be data-dependent,'" said Quincy Krosby, chief investment strategist at The Hartford.

U.S. Commerce Department figures showed an increase in new home sales in September, and this positive news was reflected in an uptick in both the Builders' Index and Product Manufacturers' Index. Builders rose 21.63 points, or 3.08 percent, to end at 723.82. Advancing issues outpaced declining issues at a 20–15 count. Product manufacturers rose at a more modest 0.10 points, or 0.01 percent, hampered by a slightly negative General Electric and its massive footprint in the index, and Whirlpool, which dropped almost 10 points. However, advancing issues still reigned in the Product Manufacturers' Index by a 3-1 margin.

In the Product Manufacturers' Index, Black & Decker jumped after the company's third quarter results bested Wall Street's expectations. BDK reported a net income of $104.6 million, or $1.59 per share, off from the $125 million, or $1.74 per share earned in the same quarter last year. Even though the results were lower than last year, they blew past the $1.44 per share anticipated by analysts polled by Reuters Estimates. Black & Decker rose 6.61 points, or 7.94 percent, and was the top dollar and percentage gainer in October.

Third quarter profits rose for Whirlpool, but their shares were beaten down on news of weak results in the U.S. Whirlpool reported net income of $175 million, or $2.20 per share, up from $117 million, or $1.47 per share, in the same quarter last year. Analysts were expecting earnings of $2.13 per share. North American revenue dropped 8 percent. Whirlpool shed 9.92 points, or 11.13 percent, and was the top dollar and percentage loser. Whirlpool closed at 79.18.

Despite turning to a loss in the third quarter, builder Ryland Group rose 7.00 points, or 32.66 percent, this session. Ryland closed at 28.43, and was the top dollar gainer in the Builders' Index.

AvalonBay stumbled this session despite an upturn in its third quarter results. AvalonBay slipped 5.41 points, or 4.58 percent, and was the top dollar loser this session. AvalonBay closed at 112.65.

Shares of Beazer rose after the builder's lenders said they would not hold Beazer in default because it did not file its financial reports in time. Earlier in the month, Beazer announced that it will restate its financials back to fiscal 2004, saying an audit found errors in lending standards and other accounting regulations. Beazer added 2.98 points, or 36.12 percent, and was the top percentage gainer for the Builders' Index this month. Beazer closed at 11.23.

PRODUCT MANUFACTURERS' BUILDERS'
Price 10/2007 Price 9/2007 Net Change Percent Change Price 10/2007 Price 9/2007 Net Change Percent Change
Index 1,091.80 1,091.70 0.10 0.01% 723.82 702.19 12.63 3.08%
Dow Jones Industrial Average 13,930.01 13,895.63 34.38 0.25% 13,930.01 13,895.63 34.38 0.25%
S&P 500 Index 1,549.38 1,526.75 22.63 1.48% 1,549.38 1,526.75 22.63 1.48%
NASDAQ Composite 2,859.12 2,701.50 157.62 5.83% 2,859.12 2,701.50 157.62 5.83%
Source: Trade Trends, 509.327.1279

GAINERS

9

BLACK & DECKER: $6.61

BLACK & DECKER: 7.94 %

DECLINERES

WHIRLPOOL: -$9.92

WHIRLPOOL: -11.13%

3

GAINERS

20

RYLAND GROUP: $7

BEAZER HOMES: 36.12%

DECLINERES

AVALONBAY COMMUNITIES: -$5.41

TECHNICAL OLYMPIC USA: -54.66%

15

Source: Trade Trends, 509.327.1279

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