U.S. stocks opened sharply lower Tuesday after a plethora of companies have beat earnings estimates, but the quality of earnings are disappointing Wall Street and investors. The Dow Jones Industrial Average fell 126 points to 10,028. The S&P 500 dropped 12 points to 1,058. The Nasdaq Composite declined 30 points to 2,167. Virtually all the companies beating earnings estimates are also missing on revenue estimates which is telling investors that there is little new business, but more cost cuts to beat the estimates. The number of stocks trading lower after beating earnings estimates include IBM, Texas Instruments, Tupperware, J&J, Goldman Sachs, Forest Labs, Biogen, Bank of New York Mellon, Whirlpool, Unitedhealth Group,and Illinois Tools. A few stocks are higher following earnings including Weatherford, Harley Davidson, UAL, MGT Mortgage, and Pepsi. Harley is the diamond of the day up 12% as net income triples. Whirlpool beat estimates by 51 cents and lifted guidance yet the stock is down 4%. Stocks receiving upgrades and trading higher this morning include Halliburton, Wolverine Worldwide, and J Crew. Sherwin Williams is down 2% on a downgrade. RadioShack is down 8% after two firms dropping out of the bidding for the firm. After the first hour the averages bounced a little off the lows. A couple of financials like Citigroup, JP Morgan, and Goldman Sachs have turned positive after opening lower. In the tech sector Google looks good. Apple and Yahoo are higher ahead of earnings tonight. In the commodity space, Freeport McMoRan is up 4.5% ahead of earnings tomorrow. Through the morning the averages slowly improved. In the afternoon the averages continued to slowly improve. By 2 o'clock the averages had made it back to the unchanged level led by rallies in Goldman Sach, Google, Apple, Freeport McMoRan, Walmart, and Caterpillar. Entering the last hour the Dow was up 30 points. The Nasdaq up 5 points. In the last hour the averages accelerated into the close. A nice turnaround. The Dow Jones Industrials Average finished up 75 points at 10,229, rebounding from a triple-digit loss intraday. The S&P 500 closed up 12 points at 1,083, led by 2.9% gain in material stocks including a 8.2% surge in Cliffs Natural Resources and a 7.5% gain in shares of U.S. Steel. The Nasdaq Composite closed up 24 points at 2,222 points.
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