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S&P 500 closes week at another all-time high

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Strong third-quarter results from technology companies drove investors into stocks on Friday, giving the market its third straight weekly gain.

After reporting results that topped expectations, Microsoft shares rose 6 percent and Amazon.com rose 9 percent. The Standard & Poor's 500 index hit a record. The NASDAQ composite is the highest it's been in 13 years.

The gains were broad. All 10 industry groups in the S&P 500 rose, led by telecommunications with an increase of 1 percent.

Most companies that have reported third-quarter earnings are beating financial analysts' estimates. Even so, earnings for companies in the S&P 500 index are expected to grow just 4.5 percent over the same period a year ago, according to S&P Capital IQ, a research firm. At the start of the year, earnings were expected to rise at more than twice that pace.

Some market watchers are calling for caution, saying that a significant part of the profit growth has come from cutting expenses, not increasing revenue, as the global economy remains sluggish.

"The question is: What is the outlook for earnings?" Steven Ricchiuto, chief economist at Mizuho Securities, said. "There is only so much you can do with cost-cutting."

Major U.S. stock indexes have soared this year. The S&P 500 is up 23 percent, the Nasdaq composite 31 percent. In addition to higher earnings, investors have been encouraged by continued economic stimulus from the Federal Reserve. Many had expected the Fed to pull back from its stimulus before the end of year, but now think the central bank will hold off until next year, possibly until March.

The Fed is buying $85 billion worth of U.S. government and other bonds with the aim of keeping interest rates low.

The stimulus program has helped investors brush aside a few warning signs about the market. Stocks look fully priced by some measures comparing them to earnings, for instance. And revenue growth is slowing. Revenue for S&P 500 companies is expected to grow just 2 percent for all of 2013, half the growth of the year before.

Economic news Friday suggested they may struggle to increase sales for a while yet.

The U.S. government that reported orders for long-lasting factory goods, excluding aircraft and military-related products, fell 1.1 percent.

Also, the University of Michigan said its index of U.S. consumer sentiment fell in October as concern grew that the partial government shutdown this month and the political fight over the nation's borrowing limit would slow growth.

The Dow rose 61.07 points, or 0.4 percent, to close at 15,570.28. The S&P 500 rose 7.70 points, 0.4 percent, to 1,759.77. The S&P also closed at a record high Tuesday.

The NASDAQ composite rose 14.40 points, or 0.4 percent, to 3,943.36. That was its highest close since September 2000.

Three stocks rose for every two that fell on the New York Stock Exchange.

Microsoft beat analysts' forecasts for revenue and earnings, giving hope to investors that its shift to devices and services from PC-based software will be successful. Microsoft rose $2.01, or 6 percent, to $35.73 after reporting a 17 percent increase in third quarter net income late Thursday.

Amazon.com was up $31.18, or 9 percent, to $363 as investors continue to shrug off its losses. The online retailer reported late Thursday that its revenue surged 24 percent to $13.8 billion in the third quarter, more than financial analysts had expected.

Zynga rose 19 cents, or 5 percent, to $3.73 after the Internet gaming company reported it had cut its losses in the third quarter. The maker of "Farmville" and "Mafia Wars" is trying to appeal more to users of smartphones and tablet computers under a new CEO.

In bond trading, the yield on the 10-year Treasury note, a benchmark for mortgages and many other kinds of loans, edged down to 2.51 percent from 2.52 percent. The yield has fallen sharply since Sept. 5, when it hit 3 percent, and is the lowest it's been in three months.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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