Stocks ended in slightly positive territory Tuesday after seesawing throughout the session, as investors weighed readings on consumer confidence and housing against a slew of earnings reports.
The Dow Jones industrial average (INDU) ticked up 5 points, the S&P 500 (SPX) rose less than a point, and the Nasdaq (COMP) gained 6 points.
Stocks climbed to six-month highs Monday, propelled higher by a stronger-than-expected report on existing home sales. But with so much uncertainty underlying the daily economic and corporate reports, volatility will continue to dominate.
"We’ve had a big run-up, so I don’t see how they can go much higher," said Karl Mills, president and CIO at Jurika Mills & Keifer.
With the Nov. 2 elections approaching and the Federal Reserve’s next policy meeting on tap early next month, the possibility of quantitative easing is also in the back of investors’ minds.
"The belief is that quantitative easing is a done deal, and to a great extent that’s why the market has been as buoyant as it has despite the fact that many leading indicators have stalled or gone down," said Ryan Atkinson, vice president of Balestra Capital. "But it’s now late October, so a lot of players are sitting on the sidelines until the elections and FOMC meeting."
Economy: The Case-Shiller 20-City index of home prices in major metropolitan areas indicated that the housing market remained sluggish in August, with prices falling 0.2% from July. From a year earlier, prices edged up a modest 1.7%, missing the 2% rise economists had been expecting.
"[The report] is consistent with what we’ve been seeing," said Mills. "Housing isn’t going to be coming back robustly any time soon here. We’re going to have a long recovery period."
After the start of trading, the Conference Board released a report showing that consumer confidence inched up in October, but remained at historically low levels. The index rose to 50.2 from 48.6 in September, coming in slightly higher than the reading of 49 economists had forecast.
"Confidence may be improving, but with the housing market still real early in what may be a turnaround and unemployment running so high, there are still a whole lot of people out there not feeling so confident," said John Wilson, chief technical strategist at Morgan Keegan.
Companies: After the market close Tuesday, Barnes & Noble (BKS, Fortune 500) unveiled a new full-color, touchscreen version of its Nook e-reader. The company did not immediately announce the price of the new Nook Color.
Shares of Coach Inc. (COH) jumped 12% after the company posted a 34% rise in first-quarter profit and earnings of 63 cents a share — topping analysts’ estimates.
Ford (F, Fortune 500) reported third-quarter earnings that beat analysts’ expectations. The automaker reported a profit of $1.7 billion, or 43 cents per share. Ford also announced plans to further pay down its debt. Shares rose 1.5%.
DuPont (DD, Fortune 500) exceeded forecasts by reporting quarterly earnings of 40 cents per share early Monday, despite a decline in pharmaceutical income related to patent expirations. Shares of the company slipped 1%.
Shares of Sony (SNE) rose 1% Tuesday, on media speculation that the electronics maker might be a takeover target for Apple (AAPL, Fortune 500).
Shares of Lexmark (LXK) tumbled 21% after the printer-maker’s CEO Paul Curlander announced that he will retire in the spring of 2011.
Late Monday, insurance giant AIG (AIG, Fortune 500) disclosed that its chief executive, Robert Benmosche, has been diagnosed with cancer and is undergoing "aggressive" treatment. AIG shares jumped 2.3%.
World markets: European stocks finished with losses. Britain’s FTSE 100 dropped 0.8%, and the DAX in Germany was down 0.4%. France’s CAC 40 slipped 0.5%.
Asian markets ended the session lower. The Shanghai Composite was off 0.3%, while the Hang Seng in Hong Kong was 0.1% lower. Japan’s Nikkei fell by 0.2%.
Currencies and commodities: The dollar strengthened against the euro and the Japanese yen, but fell against the British pound.
Oil for December delivery added 3 cents to settle at $82.55 a barrel.
Gold futures for December delivery fell 30 cents to $1,338.60 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.65% from 2.57% late Monday.
Angelo Mozilo, the former co-founder of Countrywide Financial, agreed Friday to pay $67.5 million to the SEC to settle fraud charges.
Mozilo will pay $22.5 million in the largest penalty ever on a senior executive of a public company, according to the Securities and Exchange Commission. He will also give up $45 million in "ill-gotten gains," the SEC said.
The whopping fine was announced at a court hearing before U.S. District Judge John Walter in Los Angeles.
"Mozilo’s record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite," Robert Khuzami, director of the SEC’s Division of Enforcement, said in a statement.
What Mozilo kept to himself, said Khuzami, was "a looming disaster in which Countrywide was buckling under the weight of increasing risky mortgage underwriting, mounting defaults and delinquencies, and a deteriorating business model."
Mozilo, who has long been the poster boy of the subprime mortgage meltdown, was slated to appear in the federal courthouse on Tuesday.
By settling the SEC charges, Mozilo will avoid a trial that could have provided fodder for future criminal charges.
Former Countrywide President David Sambol also settled, agreeing to give up $5 million and pay a $520,000 penalty. Ex-Chief Financial Office Eric Sieracki will pay a penalty of $130,000. All fines will be returned to "harmed" investors.
The three former executives were charged last year with defrauding investors by hiding the growing risks of the company’s mortgages.
The SEC accused only Mozilo of insider trading, alleging that he sold millions of dollars worth of Countrywide stock after he knew the company was doomed.
The defendants had previously denied the accusations, saying details about Countrywide loans were properly disclosed. In Friday’s settlement, they did not admit or deny the charges.
Sambol’s attorney, Walter Brown, issued a statement defending his client.
"Bank of America will pay the entire disgorgement amount prescribed in the settlement on Mr. Sambol’s behalf," Brown said. "While the agreement with the SEC prevents him from discussing the case, it makes clear that Mr. Sambol does not admit to any of the SEC’s assertions."
Bank of America (BAC, Fortune 500), which acquired Countrywide in 2008 for $8 a share after the deteriorating quality of the mortgage lender’s portfolio was realized, agreed in August to pay $600 million to settle similar charges.
The plaintiff lawyers on the case called the penalty the largest shareholder settlement since the mortgage meltdown started in 2007.
BioCryst Pharmaceuticals shed more than 3 percent in value in Friday trading on Wall Street.
The Birmingham-based drug company (Nasdaq: BCRX) dipped 17 cents or 3.3 percent to close at $5.02. The drop was a theme for most local publicly traded companies.
Hibbett Sporting Goods (Nasdaq: HIBB) was one of the few to post a gain on Friday. The Birmingham-based sporting goods chain rose 70 cents or 2.7 percent to end at $26.64.
Other local stock action included:
HealthSouth Corp. (NYSE: HLS) declined 42 cents or 2.3 percent to finish at $18.17.
Superior Bancorp (Nasdaq: SUPR) decreased 4 cents or 4.3 cents to settle at 90 cents.
Regions Financial (NYSE: RF) slid 11 cents or 1.5 percent to close at $7.06.
Pop and R&B diva Beyonce Knowles ranks among the 20 most powerful entertainers in the world, according to an analysis of revenue and earnings potential by Entertainment Weekly.
The 29-year-old Houston singer and actress was ranked at No. 19 in the listings released this week in the magazine’s Oct. 15 issue.
According to the magazine, Beyonce has sold 11.3 million CDs, 21.2 million digital download tracks and has had 603 million video plays on YouTube during her career as a solo artist and with Destiny’s Child.
Beyonce dominated the 2010 Grammy Awards with six trophies.
Actor Johnny Depp topped the list as the most powerful entertainer, with his films having grossed nearly $6 billion at the box office; followed by pop singer Lady Gaga — who collaborated with Beyonce on the YouTube sensation video “Telephone” at No. 2 and daytime talkshow guru Oprah Winfrey at No. 3, with a net worth of $3 billion.
A two-day internal study mission focused on projects and companies that have earned the Sacramento region bragging rights wraps up Friday in Folsom.
Some of the “firsts” event participants learned about included the region’s status as the top place in the state for green job growth, and its claim to the world’s largest solar power system on the roof of a movie theater. The region can also lay claim two of the largest solar power systems in the country — at Aerojet and Intel Corp.
In addition, Los Rios Community College District will have the first regional education center on a University of California campus — the Sacramento City College Davis Center at UC Davis West Village. The center is expected to open in spring 2012.
The region’s business and community leaders are used to traveling as a group out of state — and at times out of the country — to study what other places have done right in economic development and other topics of interest. The second annual Sacramento Regional Internal Study Mission again invited leaders to stay home to study this region’s assets and opportunities.
The goal is for business and community leaders to look inward, learn more of what the region has to offer and become better able to sell others on Sacramento’s strong points.
This year’s study mission is focused on sustainable communities, energy and agriculture; clean-energy technology; education; agri-tourism; and health care.
Participants from a variety of industries, government, education and nonprofits traveled together by bus to tour a few highlights in Sacramento and El Dorado counties. Destinations included California State University Sacramento, Folsom Lake College, El Dorado Hills Town Center, the American River Parkway, Intel’s Folsom campus and Soil Born Farms.
Some participants fully immersed themselves in the study mission by staying overnight at Lake Natoma Inn in Folsom.
The event is organized by the Sacramento Asian Pacific Chamber of Commerce.
Tens of thousands of low-income workers lost their jobs Thursday as a stimulus-subsidized employment program came to an end.
About a quarter of a million people in 37 states were placed in short-term jobs thanks to a $5 billion boost to the Temporary Assistance for Needy Families program, according to the Center on Budget and Policy Priorities. States used about $1 billion to provide subsidized employment, with the remaining funds going to cash grants, food programs, housing assistance and other aid.
About half the jobs were summer employment for youth and the rest were for disadvantaged parents. Each state configured its initiative differently. Some covered all the workers’ wages for a few months, while others paid for a portion of their salary.
With the program expiring, many of the adults have been told not to report to work anymore. And it won’t be easy for them to find a new position at time when the unemployment rate continues to hover at 9.6%
"They are just joining the millions of other people looking for permanent work," said Elizabeth Lower-Basch, senior policy analyst at the Center for Law and Social Policy, an advocacy group known as CLASP.
The TANF jobs initiative was one of several stimulus initiatives that ended Thursday. Also running out are a $2 billion subsidized child care program and a $2.1 billion boost for Head Start, an early learning program for needy children.
Limping along
State officials and advocacy groups have been lobbying Congress to extend the jobs program and other Recovery Act measures, but federal lawmakers have shown little appetite to do so payday loans.
A handful of states will continue to operate the programs for another few months, but most of those will be downsized considerably.
Illinois announced earlier this week that it will continue the program with state funds for up to two months in hopes that Congress will provide more money for it. The state has placed more than 26,000 workers at more than 5,000 private, non-profit and government employers.
"The best way to make our economy stronger is to put people to work," said Gov. Pat Quinn. "It is good for families, small business owners and businesses."
The TANF jobs program is among the few stimulus initiatives that have been embraced by Republican governors. Mississippi’s Haley Barbour, who headed the Republican National Committee in the mid-1990s, praised the effort.
The "program will provide much-needed aid during this recession by enabling businesses to hire new workers, thus enhancing the economic engines of our local communities," Barbour said when the initiative launched last year.
South Carolina, Texas and Minnesota — all headed by Republican governors — plan to continue their programs either in a smaller form or for a few months, according to the Center on Budget and Policy Priorities.
Baptist Medical Center Beaches on Friday said its new cancer center would be named The Wilson Cancer Care Center at Baptist Medical Center Beaches, in recognition of philanthropic support from Tylee and Pat Wilson.
The center will provide comprehensive services to cancer patients and their families to assist them through the diagnosis, treatment and healing process. It will also serve as a community resource center.
The Wilson Cancer Care Center will house the Baptist Beaches Multidisciplinary Breast Care Clinic, the offices of Hematology Oncology Associates/Integrated Community Oncology Network and the Florida Radiation Oncology Group, a multimedia library that includes computers with access to specialized health and research information and a conference room to host classes and cancer support groups.
The Center will be located on the Baptist Beaches campus on the first floor of the current Medical Office Building B. The current space will be remodeled over the next few months to accommodate the center. The project is expected to be completed in early 2011.
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