Futures were pointing towards a strong open when we hit the rack last night as it appeared the market would rally after getting word that European finance leaders were working towards a solution to the debt crisis and plan to have something on the table by the end of the week. However, Germany came out this morning and calmed the bulls’ enthusiasm by saying this weekend’s European Union (EU) meeting will not be a miracle cure and that it will not fix all of the eurozone’s financial woes.
Here at home, economic news was better-than-expected but not all that great. The Empire State Manufacturing Index for October came in at -8.5, up from -8.8 in September, but still came in short of expectations for a print of -4.
In M&A news, a major merger between Kinder Morgan (KMI, $28.65, up $1.76) and El Paso (EP, $24.25, up $4.66) has also failed to lift the market. We said a few weeks ago with distressed stock prices we could see some action as Kinder will pay $38 billion in cash and stock, or nearly $27 a share, to acquire El Paso.
Turning to earnings, Halliburton (HAL, $35.02, down $2.41) is down nearly 7% despite reporting a blowout revenue quarter.
The company reported profits rose 25% to $683 million, or $0.74 a share, on record quarterly revenue of $6.54 billion. The results included a write-off of $0.18 a share for discontinued operations or they would have posted 92 cents share. Wall Street was looking for $0.92 a share on sales of $6.39 billion.
After the bell, International Business Machines (IBM, $187.35, down $3.18) will report their earnings along with VMWare (VMW, $89.50, down $3.58). We were able to close our 14th winning trade this morning and we have profits to take on 3 more trades making it 17-in-a-row!
As we head to press, the Dow is down 187 points to 11,457 while the S&P is lower by 18 points to 1,206. The Nasdaq is off by 47 points to 2,620. Subscribers, check the Members Area for the updates.