STOCKS GO NOWHERE, IBM TANKS: Here's What You Need To Know

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Earnings announcements are coming out in droves. And we got a monster housing report.First the scoreboard:

Dow: 13,557, +5.2, +0.0 per cent
S&P 500: 1,460, +5.9, +0.4 per cent
NASDAQ: 3,104, +2.9,+0.1 per cent

And now the top stories:

  • It seems people have grown accustomed to evidence supporting a housing market recovery, because today’s huge report barely moved markets.  According to the Census Bureau, housing starts surged 15 per cent to an annualized rate of 872k in September.  Economists were looking for it to increase just 2.7 per cent to 770k.  This is the highest level for starts since 2008.  Also, building permits crushed expectations, soaring 11.6 per cent to 894k.  Economists were only looking for 810k.
  • However, Wall Street Examiner’s Lee Adler waved a caution flag after the report.  He noted that housing starts were growing faster than new home sales, which means supply may be beginning to outpace demand.  Next week’s new home sales report will be crucial.
  • For now, the housing starts report just adds to a pile of bullish U.S. consumer and housing data, which BI’s Joe Weisenthal describes as the biggest economic story in the world.
  • However, the other side of that big economic story is U.S. businesses, which are at a standstill due to intensifying policy uncertain especially considering the unresolved fiscal cliff.  Last night, Morgan Stanley reported that its proprietary Business Conditions Index collapsed in October.  “Optimism surrounding supportive monetary policy has faded while fiscal cliff and election uncertainty have steadily risen,” wrote Morgan Stanley economist Dane Vrabac. “The stronger than expected employment report did little to boost enthusiasm.
  • CSX also confirmed this theme in its Q3 earnings announcement. The railroad giant noted that it benefited from strength in autos and housing.  However, CFO Fredrik Eliasson told us that fiscal cliff uncertainty is preventing purchasing managers from building inventories and senior executives from executing growth plans. Here’s What The Economy Looks Like From A Railroader’s Perspective >
  • Tons of companies announced quarterly earnings since yesterday’s closing bell.  IBM announced earnings right in line with expectations, but analysts seemed to be disappointed when management only reiterated its full-year guidance.  The stock fell 4.9 per cent today.  Intel was another tech giant with a good Q3 earnings, but a weak stock today.
  • Don’t Miss: 7 Ways Your Brain Is Making You Lose Money >

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