This post is from CNBC producer Robert Hum.
October has spooked the markets once again. The Dow and S&P are poised to have their worst month since the crash in October 1987. This month, the Dow is down 15% and the S&P is down 18%.
The markets have just turned positive, despite weakness overseas and disappointing Chicago PMI data. Keep in mind, the Dow hasn’t posted 2 consecutive days of gains in over a month.
Japan’s benchmark Nikkei 225 index fell 5% overnight, as the Bank of Japan decided to cut interest rates only by 0.2%, which disappointed many investors. The Nikkei had surged 10% on Thursday on hopes that interest rates would be cut by 0.25%
Good news: 3-month U.S. Dollar Libor continues to fall. The rate is just above 3%, a far cry from the near 4.9% level it was at a couple of weeks ago.
Some earnings highlights:
Chevron’s Q3 net income came in at $7.9 billion, as earnings beat estimates. Just like ExxonMobil, higher crude oil prices helped Chevron’s upstream earnings rise 82% from last year. .Its downstream business also improved from last year, since margins increased as oil prices fell over the past couple of months.
Shares of telecom BT Group are sharply lower, as the company warned its second quarter earnings will miss estimates due to weakness at its global services unit. In a conference call, the company’s CEO said the earnings disappointment is due to “an internal BT operational matter” and was not a result of the current economic crisis.
Q3 earnings for engine maker Cummins miss analysts’ estimates. Despite strength in its power generation division, the company noted that the slowing economy had hurt its consumer lines. It continues to see weakness in Europe and in the U.S. in the fourth quarter. As a result, it has lowered its revenue guidance for 2008. The company also noted that 61% of its total sales comes from international markets, up from 52% last year.
In other corporate news:
Barclaysshares are down nearly 20% after it raised $12 billion in capital from Middle East investors
Carnival Corp.has suspended its dividend for at least the next quarter to preserve cash. Furthermore, it says it “intends to maintain the dividend suspension” throughout next year, but will continue to reevaluate the policy throughout the year. The company also announced it’s increasing its 2008 guidance due to favorable fuel prices and currency exchange rates offsetting slowing cruise bookings.
Brazilian miner Companhia Vale do Rio Doce plans to cut production in response to slowing global demand. The company seeks to immediately cut steel production by 20%.
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