The Joplin Globe, Joplin, MO

October 24, 2012

Stocks stabilize on Wall Street after a sell-off

From The Associated Press

NEW YORK — The stock market stabilized Wednesday after one of its biggest sell-offs of the year. Major indexes rose modestly.

In the first half-hour of trading, the Dow Jones industrial average climbed 21 points to 13,124. The Standard & Poor’s 500 index rose four points to 1,416 and the Nasdaq composite index rose 15 to 3,005.

Facebook appeared poised for its best day since its stock market debut in May. The company said late Tuesday that 14 percent of its advertising revenue came from mobile devices, allaying some investor concerns.

The stock climbed $4.01, or 21 percent, to $23.51. Facebook has swung widely since its IPO at $38 a share, and has traded as low as $17.55.

Boeing, one of the 30 stocks in the Dow, raised its profit expectation for the year. It said it expects to earn $4.80 to $4.95 per share, up from a previous estimate of $4.40 to $4.60. The stock rose $1, or 1.4 percent, to $73.82.

Another Dow stock, AT&T, said it added the fewest wireless customers since 2003, far behind Verizon Wireless. AT&T still made 63 cents per share in the last quarter, beating the estimates of financial analysts. The stock fell 36 cents to $34.64.

Lower corporate revenue and lower expectations for the rest of the year drove a big decline in stocks Tuesday. The Dow fell 243 points, its third-biggest decline of the year. DuPont, 3M, UPS and Xerox all reported lower revenue than a year ago.

A measure of manufacturing in China, the world’s second-largest economy after the United States, improved this month to a three-month high. China’s white-hot economic growth has been slowing.

The higher open on Wall Street followed gains in European stock markets. Benchmark indexes rose 0.5 percent in Germany, 0.7 percent in France and 0.3 percent in Britain.

In the U.S., bond prices inched lower, sending yields up. The yield on the benchmark 10-year Treasury note climbed to 1.79 percent from 1.76 percent late Tuesday.

Among other stocks in the news:

— Netflix plunged $9.53 a share, 14 percent, to $58.69. Late Tuesday, it slashed its prediction for how many U.S. video-streaming subscribers it would add this year to 4.7 million to 5 million. It had predicted it would add as many as 7 million.

— Dow Chemical rose $1.33, or 5 percent, to $29.88. The company announced a wide-ranging restructuring plan late Tuesday that includes cutting 2,400 jobs and closing 20 manufacturing facilities. The company cited slowing economic growth in Europe and elsewhere.

— Tempur-Pedic plunged $7.13 to $24.74, a loss of 22 percent. The maker of premium memory foam mattresses reported revenue that was well below the estimates of Wall Street analysts. The company also cut its estimates for full-year profits and revenue.