24/7 Wall St. Closing Bell -- October 8, 2012: Markets Open Lower, Can’t Overcome Expected Weak Earnings (ALU, LNKD, BBBY, HMC, BLK, DNN, AA, YUM, VRNG, REGI, GDOT, WMT, AXP, TPCG)

The three major U.S. stock indexes opened lower this morning as banks and bond markets were closed in the U.S. The World Bank cut its forecast for Chinese economic growth in 2012 to 7.7% and its outlook for 2013 GDP growth to 8.1% this morning (more coverage here). In Asia, Japanese carmakers have slashed production for China sales as a result of the current tensions between the two countries (more coverage here). U.S. markets never approached the break-even mark today as guidance cuts continue to deaden investors’ appetite for risk. The European Stability Mechanism (ESM) officially opened for business today (more coverage here).

The U.S. dollar index rose today, now up 0.31% at 79.583. The GSCI commodity index is down 0.8% at 659.63, with commodities prices mixed today. WTI crude oil closed down 0.6% today, at $89.33 a barrel. Brent crude trades down 0.12% at $111.88 a barrel. Natural gas is up 0.27% today to $3.405 per thousand cubic feet. Gold closed at $1,775.70 an ounce, down 0.3%.

The unofficial closing bells put the DJIA down more than 26 points to 13,583.58 (-0.20%), the NASDAQ fell nearly 24 points (-0.76%) to 3,112.35, and the S&P 500 -0.35% or about 5 points to 1,455.88.

There were several analyst upgrades and downgrades today, including Alcatel-Lucent S.A. (NYSE: ALU) cut to ‘sell’ at Goldman Sachs; LinkedIn Corp. (NYSE: LNKD) maintained as ‘hold’ but 2012 earnings target cut by 20% at Argus; Bed Bath & Beyond Inc. (NASDAQ: BBBY) reiterated as ‘buy’ with a target price of $80 at BofA/ML; Honda Motor Co. Ltd. (NYSE: HMC) cut to ‘neutral’ at Credit Suisse; and Blackrock Inc. (NYSE: BLK) raised to ‘buy’ at Citigroup.

There have been no earnings reports of note since the markets closed on Friday. After the markets close today we are scheduled to hear from uranium miner Denison Mines Corp. (NYSEMKT: DNN). Earnings season gets off to its “official” start tomorrow, when we hear from Alcoa Inc. (NYSE: AA) and Yum! Brands Inc. (NYSE: YUM).

Some standouts from today include the following stocks:

Vringo Inc. (NYSEMKT: VRNG) is up 19.1% at $5.41 after posting a new 52-week high of $5.57 earlier today. The intellectual property firm has filed a patent infringement suit against the U.K. subsidiary of Chinese handset maker ZTE.

Renewable Energy Group Inc. (NASDAQ: REGI) is down 21.6% at $5.58. The biodiesel maker cut its third quarter earnings guidance sharply today.

Green Dot Corp. (NYSE: GDOT) is down 19.5% at $10.35. The pre-paid credit card issuer is being threatened by a new agreement between its largest customer, Wal-Mart Stores Inc. (NYSE: WMT), and American Express Co. (NYSE: AXP) to launch a new pre-paid card. More coverage here.

TPC Group Inc. (NASDAQ: TPCG) is up 12.3% at $45.69. The chemicals company has received a competing offer as it seeks to sell itself. More coverage here.

Stay tuned for Tuesday. We have also noted the following events on the schedule (all times Eastern):

  • 7:30 a.m. – National Federation of Independent Businesses small business optimism index
  • 7:45 a.m. – ICSC-Goldman store sales
  • 11:30 a.m. – 3- and 6-month bill auctions
  • 1:00 p.m. – 3-year note auction

Paul Ausick

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