Is the so-called “Bernanke Put” really coming out of the market already? QE3 is still just beginning. And earnings season is now living up to the fears that many of us had even as the market rallying on hope up until early this month. The chatter is growing that Ben Bernanke will not seek another appointment as the Chairman of the Federal Reserve. Does this mean that the easy money will come to an end immediately? It seems unlikely. The real problem for the broader market is that earnings season is bringing more and more bad news from the major companies in America.
24/7 Wall St. wanted to give an earnings season report card. The good news is that if this was a school grade it would not get an “F” for failing. The bad news is that it is a “D” for sure, and that “D” may really only be because of a bell-curve grade. The DJIA appears to have peaked in 2012 as you will see here. With a 200 point drop on Tuesday, the 13,125 level is now down over 500 points from the DJIA’s peak earlier this month. We have given a blow-by-blow of the earnings and carnage for this earnings season.
DuPont (NYSE: DD) and its lower earnings being met with layoffs is the most recent carnage. What happens when the great chemicals and ag company is doing so poorly that it has to announce layoffs? Well, shares are down over 8% at $45.50 against a 52-week range of $43.06 to $53.98. Another issue that is damning the market today is the earnings report from conglomerate 3M Co. (NYSE: MMM). With the DJIA being a price weighted index, 3M is acting as a big drag. Earnings were $1.65 per share on revenues of $7.53 billion, versus $1.52 per share on revenues of $7.53 billion a year ago and versus the Thomson Reuters consensus estimates for EPS of $1.65 and $7.63 billion in sales. 3M shares are down 3.5% at $89.30 against a 52-week range of $75.49 to $95.46.
Even General Electric Company (NYSE: GE) has been unable to avoid the earnings trap as the earnings pressure took out almost 4% on Friday, but a sell-off of almost 1.5% on Monday has been followed by a sell-off of 2% more on Tuesday. GE shares are now at $21.28 and a 10% correction from its recent multi-year high would be $20.86. Apparently its digital market efforts are not really hiding the ongoing challenges.
The fall from grace by the prior market darling Google Inc. (NASDAQ: GOOG) caused a real issue for investors. It was not just that its earnings report was sub-par at best. The way that Google “accidentally” released the data during the middle of the day caused a market fiasco and broad sell-off. Investors had been betting that Google was going to be a bright spot as its shares had recently hit an all-time high. Now Google shares are trying to find their footing but the 0.8% gain on Tuesday still has shares down at $684.00 against a 52-week range of $556.52 to $774.38.