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Minyanville's Market Recap: Markets Remember 1987 Anniversary in a Bad Way


Markets remember 1987 by selling off stocks. Drillers lead the way to the downside. Stocks fell.

Twenty years after the Dow fell 22% in one day, the markets fell in a similar fashion today, albeit on a much smaller scale. The Dow Industrials fell almost 400 points to close -2.66% to 13,519, the S&P 500 lost -2.5% to 1500, and the Nasdaq Composite fell -2.6% to 2725.

Investors were concerned with the direction of the economy as a number of companies reported less-than stellar results for the third quarter. Wachovia (WB) missed analyst estimates by $0.14 with results coming in at $0.90 per share. Wachovia shares closed down -3.6% for the day. The performance was in-line with other financials. Morgan Stanley (MS) and Merril Lynch (MER) lead the banks to the downside both losing over 5%. Bear Stearns (BSC) lost -2.4%, and Goldman Sachs (GS) lost -4.4%. Read Toddo's Random Thoughts today as he talks about the irony in the financials.

Earnings from other companies may have spooked investors as well. Caterpillar (CAT) missed expectations reporting earnings for the third quarter at $1.40, $0.03 less than estimates. Revenues rose 8.4% year-over-year to $10.67 bln versus estimates of $10.33 bln. In addition the company issued downside guidance for the 2007 year.

Schlumberger (SLB) reported 3Q results above expectations $0.03 above analyst expectations. Earnings per share came in at $1.09 versus estimates of $1.06. Revenues rose 5.1% year-over-year to $5.93 bln versus $5.89 bln consensus. Toddo cautioned Buzz readers on the drillers yesterday. Drillers proceeded to be among the worst performers. The Oil Service Sector (OSX) fell -6.4%. Notable stocks included National Oilwell Varco (NOV) losing -9.14%, Baker Hughes (BHI) -5.8%. SLB proceeded to fall -11.02% to $99.32. Toddo warned of combination of earnings season and expiration day. Read his thoughts in Metric Test. Also read Professor Michael's Crude Update.

In other parts, tech stocks also fell victim to the overall sentiment even as Google (GOOG) reported last night with positive results. Although GOOG shares rose +0.50%, other tech stocks were hit hard. Apple (AAPL) lost -1.6%, Research In Motion (RIMM) fell -1.8%, and Garmin (GRMN) fell -4.4%. For more on the tech plays, read Professor Udall's Revisiting 21 Bullish Predictions For Tech.

Commodities were mixed today as crude fell -1.07 to 88.40. Gold lost -0.10 to 764.00, and Silver fell -0.158 to 13.553. Copper gained +0.0065 to 3.54.

The radar is light on Monday with no economic events scheduled.

Here are a few notable names along with analyst estimates for Monday, October 22nd.

Before Market Open:
HAL: $0.64 EPS; $3.8 bln revenues
HAS: $0.71 EPS; $1.14 bln revenues
JAKK: $1.30 EPS; $300 mln revenues
WFT: $0.84 EPS; $1.99 bln revenues

After Market Close:
AXP: $0.85 EPS; $7.31 bln revenues
AAPL: $0.83 EPS; $6.01 bln revenues
NFLX: $0.18 EPS; $286 mln revenues
TXN: $0.50 EPS; $3.65 bln revenues

Click here for the full trading radar.

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: GOOG, NYX, AMZN, LCC, DELL, SCHW, AMX, HAL, NAV, KO, JPM, WFC, BSC, HGX, SNDK, DUG, SMN

Some bearish trade or investment ideas: OSX, AAPL, SLB, SII, HAL, HOG, RIG, GS, QQQQ, SMH, XLE, EEM, GLD, EXM, MAN, BKX, OIH

We're at the Bull and Bear tonight. Feel free to stop by if you're in town. Have a great weekend!
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No positions in stocks mentioned.

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