Dow Leads Averages Lower On Big Earnings Letdowns

By DONALD H. GOLD, INVESTOR’S BUSINESS DAILY

Stocks sold off Tuesday on news of some disappointing earnings with the Dow taking the brunt of the damage.

The Dow Jones industrial average slid 1.8%. The bad news there came from DuPont (DD), which swooned 9%, and 3M (MMM), which sank 4%. Both logged fast trade. But the roster of blue chips was riddled with chunky declines.

The Nasdaq fell just 0.9%, while the S&P 500 lost 1.4%. Those losses got as bad as 1.4% and 1.8%, respectively, at the day’s low.

Volume increased on both exchanges, suggesting that big funds were among the aggressive sellers.

Apple (AAPL) tumbled 3% in fast trade after it unveiled the iPad mini, a smaller, less-expensive version of its popular iPad. The stock has fallen 13% from its 52-week high, sinking below its 50-day moving average and undercutting its 619.97 buy point. Apple is expected to announce Thursday that profit for the September-ended quarter rose 25%, up from the prior quarter’s 20% gain.

Monster Beverage (MNST) plunged for a second day, sinking 11% in huge volume. The stock has collapsed 23% this week amid reports citing Monster’s energy drinks in the deaths of five people over the past year.

Auto parts supplier Autoliv (ALV) crashed 10% in huge volume, slicing through its 50-day and 200-day moving averages, after reporting Q3 profit fell 15% from a year earlier, the fifth decline in six quarters. Revenue fell 3% from a year ago, the first drop in 12 quarters.

On the upside, ARM Holdings (ARMH) surged 9% in four times its usual volume, pushing past a 29.29 cup-with-handle buy point. The U.K.-based mixed-signal chip designer posted EPS of 18 cents, as expected, on sales of $233.5 million, which beat estimates. The 29% earnings gain broke a string of subpar results. Sales rose 24%, ARM’s best in five quarters, but still not meeting the levels you want to see in a CAN SLIM stock.

Coach (COH) jumped 7% after it said September-ended quarter earnings grew 5.5% to 77 cents a share, a penny above the consensus forecast but the smallest increase since a 6% increase in the June 2011 quarter. Revenue rose at a faster rate of 11% to $1.16 billion.

The luxury handbag and accessories maker and retailer announced a share buyback of up to $1.5 billion by June 30, 2015.

Shares of mortgage-servicing company Nationstar Mortgage Holdings (NSM) logged a wild session. The stock fell 2% in the morning, then reversed higher and climbed as much as 6% before settling for a 2% win. Volume surged to more than twice its norm. This action follows Monday’s 5% gain in weak volume.

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