U.S. Stocks Sideways; Cigna Lifts Outlook; Chevron Net Doubles

Nichole Harper
28 Oct, 2011
New York City

Stocks in New York eased after a sharp rally on Thursday. Consumer spending accelerated and rose 0.6% in September and consumer confidence index was revised higher in October. Whirlpool Corp plans to cut 5,000 jobs and Chevron said third quarter net more than doubled. Cigna lifted annual outlook.

[R]10:55 AM New York – Stocks in New York eased after a sharp rally on Thursday. Consumer spending accelerated and rose 0.6% in September and consumer confidence index was revised higher in October. Whirlpool Corp plans to cut 5,000 jobs and Chevron said third quarter net more than doubled. Cigna lifted its annual outlook.[/R]

Stocks in New York trading eased after a strong surge in yesterday’s trading and mixed batch of domestic earnings affected stocks. In Europe, all eyes were on Italian bond auction and rising tensions in Greece.

The Commerce Department said personal spending increased 0.6% in September after rising at 0.2% in August and income rose less than estimated.

Separately, University of Michigan said its index of consumer sentiment increased in the final review to 60.90 in October from 59.4 in September. The preliminary estimate for the month was 57.5.

European indexes declined a fraction after a surge of more than 5% in Thursday’s trading. All eyes turned to bond markets as yields on Italian and Spanish bonds continue to rise.

Italian Treasury sold less than €8 billion of bonds of 3-, 7-year and 10-year maturities that drew tepid response and yield surged near the highs last seen a week ago.

Italian Prime Minister Silvio Berlusconi yesterday told reporters that the nation will lose its credibility “if we do not respect our commitments” and went on to add “we won’t be credible anymore.”

Italy is struggling with the second largest debt to GDP in the euro zone after Greece and lawmakers failed pass austerity measures that were demanded by the EU leaders.

The growing list of skeptics cautioned that the quick embrace of the plan by the market may lead to disappointments later. There are a number of questions on how Greek debt restructuring will work and if enough people do not sign up for the voluntary exchange the pact could easily unravel.

Investors are still not convinced how the European Union will leverage its rescue fund from the current €440 billion to €1 trillion. French President Sarkozy is expected urge China and Japan to participate in the fund.

Stock Movers

LyondellBasell Industries NV ((LYB)) increased $1.24 to $34.79 after the oil refiner said third quarter net income increased $895 million or $1.51 a share from $467 million or 84 cents a share.

Revenues in the quarter surged 29% to $13.29 and earnings excluding one-time items rose to $1.53 a share.

The commodities chemical and oil refiner said it will pay a special dividend and also buyback $2.8 billion of its debt and the strike at its refinery in Berre, France had “minimal impact” on the quarterly performance.

Cablevision Systems Corp ((CVC)) declined $1.72 to $15.40 after the cable operator said quarterly revenues increased 8% to $1.67 billion and earnings declined to $39.3 million or 14 cents a share compared to $68.4 million or 23 cents a share.

The stock declined 11% after the cable operator reported larger than video customer losses of 19,000 to Verizon, Netflix and others and also added 17,000 net new Internet subscribers.

BMW AG increased 1% to €61.70 after the automaker said it is not planning cut its production and its outlook for the year is as strong as estimated a month ago.

The head of production was quoted by Reuters saying, “We have a great utilization rate right now. It is significantly more than 110%.”

Yesterday, Volkswagen AG and Daimler AG lowered their global outlook.

Cigna Corp ((CI)) declined 44 cents to $46.33 after the health insurance provider said third quarter revenues increased 6% to $5.61 billion and earnings declined to $200 million from $307 million. Earnings per share fell to 74 cents from $1.23 a year ago quarter.

Healthcare insurer lifted its annual earnings outlook to a range between $5.05 and $5.30 a share from its previous estimate of $4.95 and $5.25 a share, excluding the costs related to the acquisition of HealthSpring.