Market Update

4:20 pm : It was a bit of deja vu on Tuesday as rising oil prices and a weak financial sector (-1.9%) combined to knock the stock market for another loss. The difference from Monday was that the losses weren't as severe.

The latter point notwithstanding, the bulls didn't have a lot to cheer about on Tuesday. Oil prices topped $88 per barrel at their highs for the day before closing at $87.61 (+1.7%). Concerns about Turkey invading northern Iraq to strike the Kurds fueled the uptick in oil prices.

Once again, the surge in prices enabled the energy sector (+0.3%) to outperform. It didn't have any company on the winning side of things, though, as the remaining economic sectors finished with a loss.

Like Monday, the most influential drag was the financial sector, which was sent reeling following disappointing earnings reports from the likes of Wells Fargo (WFC 34.55, -1.40), KeyCorp (KEY 30.44, -1.91) and Regions Financial (RF 28.53, -0.60) that were accented with rising credit losses. Asset manager State Street (STT 74.68, +5.75) bucked the trend after easily surpassing analysts' consensus estimate for the third quarter, but its strength wasn't enough to overcome losses in the heavily-weighted banking complex.

Overall, the earnings reporting on Tuesday failed to live up to the market's expectations.

Dow component and Briefing.com Active Portfolio holding Johnson & Johnson (JNJ 65.07, -0.58) topped estimates by $0.07; however, investors were unimpressed that net earnings actually slipped 7.7% in the third quarter.

Separately, LM Ericsson (ERIC 31.33, -9.60) issued a nasty earnings warning that hit its stock hard and took down many other technology issues ahead of a key batch of reports Tuesday night from IBM (IBM 119.60, +1.57), Intel (INTC 25.48, -0.27) and Yahoo! (YHOO 26.69, -1.17).

Homebuilding was again cast in a negative light as a report noting homebuilder confidence fell to a record low in October and an update from D.R. Horton (DHI 12.86, -0.72) indicating net sales orders plunged 48% for the fourth quarter ended September 30th led to further selling of homebuilding stocks. Cautious commentary on the state of the housing sector from Fed Chairman Bernanke didn't help much either.

There wasn't a lot of economic data Tuesday. The Industrial Production report for September was the featured item. It showed a modest 0.1% increase for the month, but the trend in production is consistent with 2% real GDP growth and didn't change economic expectations.

In another release, it was reported that net foreign purchases of U.S. securities dropped by $69.3 billion in August, which marked the height of the credit market crisis. With the market rebounding sharply after the Fed rate cut in September, this number should show some solid improvement when the September report is released. It certainly didn't hurt the dollar Tuesday, which gained ground against a basket of other major currencies.DJ30 -71.86 NASDAQ -16.14 SP500 -10.18 NASDAQ Dec/Adv/Vol 1900/1063/2.07 bln NYSE Dec/Adv/Vol 2336/916/1.28 bln

3:30 pm : The major indices continue to trade in negative territory. The financial sector (-2.0%) is the main laggard, while the energy sector (+0.4%) stands alone in positive territory.

As a reminder, IBM (IBM 119.33, +1.30 ), Intel (INTC 25.39, -0.36) and Yahoo! (YHOO 26.83, -1.03) are set to report their earnings after the close today.

Tomorrow brings a number of economic releases. The Consumer Price Index report, the most widely cited inflation indicator, will be released at 8:30 ET. Briefing.com expects September's Core CPI reading to rise 0.2%. The Housing Starts and Building Permits, and Fed's Beige Book reports will also be released.

Dow components that are reporting their earnings before the open include Altria (MO 70.88, -0.51), Coca-Cola (KO 57.97, +0.33), JP Morgan Chase (JPM 44.78, -1.49) and United Tech Corp (UTX 79.45, -0.42).

Per usual, the weekly energy report will be released at 10:30 ET. DJ30 -77.06 NASDAQ -13.12 SP500 -10.42 NASDAQ Dec/Adv/Vol 1930/1012/1.67 bln NYSE Dec/Adv/Vol 2295/929/935 mln

3:00 pm : The stock market continues to trade in a tight range, as it has since 11:30 ET.

The small-cap Russell 2000 Index is performing on par with its large-cap counterparts. The S&P 400 Mid-Cap Index is performing slightly worse.

Separately, the dollar index has gained 0.21% this session. DJ30 -73.49 NASDAQ -13.75 R2K -0.5% SP400 -0.8% SP500 -9.17 NASDAQ Dec/Adv/Vol 1844/1070/1.55 bln NYSE Dec/Adv/Vol 2253/960/847 mln

2:30 pm : The major indices are largely unchanged since the last update as they trade in a tight range.

The homebuilding group (-2.6%) has been underperforming this session in part due to a dismal homebuilder sentiment report released at 13:25 ET, and comments made by U.S. Treasury Secretary, Henry Paulson.

The National Association of Homebuilders Index of builder sentiment fell to a record low in October. The reading came in at 18, which is less than the consensus estimate of 20. Any reading below 50 indicates negative sentiment.

Paulson said the housing decline is still unfolding, and sees it as the "most significant current risk" to the U.S. economy. DJ30 -70.72 NASDAQ -8.99 SP500 -8.97 NASDAQ Dec/Adv/Vol 1763/1142/1.44 bln NYSE Dec/Adv/Vol 2159/1040/791 mln

2:00 pm : The major indices have been choppy this session since 11:30 ET, but their ranges have been limited. The stock market continues to trade in negative territory.

The Amex Airline Index (flat) is outperforming the market despite the all-time high oil prices. Delta Air Lines (DAL 20.28, +0.28) is providing support after reporting better than expected third quarter earnings of $0.56 per share, compared with the consensus estimate that expected $0.41.

The Dow Jones Transportation Average is underperforming today. High crude prices typically weigh heavily on the Average. DJ30 -68.04 DJTA -0.9% NASDAQ -7.75 SP500 -7.77 NASDAQ Dec/Adv/Vol 1751/1140/1.33 bln NYSE Dec/Adv/Vol 2151/1022/720 mln

1:30 pm : The stock market has retreated a bit since the last update. Only the Nasdaq Composite has made it to positive territory this session, and that was short-lived.

Apple (AAPL 168.57, +1.66) is in the green today after announcing that its new operating system, Mac OS X Leopard, will go on sale Friday, October 26 at 6:00 p.m. at Apple's retail stores and Apple Authorized Resellers. DJ30 -75.27 NASDAQ -8.59 SP500 -10.51 NASDAQ Dec/Adv/Vol 1813/1037/1.22 bln NYSE Dec/Adv/Vol 2194/956/652 mln

1:00 pm : The major indices are trading near their best levels of the session, but remain in the red.

Only twelve of the thirty Dow components are in positive territory. IBM (IBM 115.53, +0.50) and McDonald's (MCD 56.67, +0.47) are currently leaders. IBM was initiated with a Buy at Amtech with a price target of $150. Amtech believes IBM is positioned to show greater than expected growth and margin. Meanwhile, Merrill Lynch raised McDonald's price target to $63 from $56.

General Motors (GM 39.98, -1.13) is the main Dow laggard after Bear Stearns downgraded the company to Underperform from Peer Perform because the new UAW contract's 2008-2009 benefits to EPS and cash flow appear to be less than firm had expected. DJ30 -51.46 NASDAQ -4.75 SP500 -5.48 NASDAQ Dec/Adv/Vol 1698/1129/1.10 bln NYSE Dec/Adv/Vol 2084/1052/586 mln

12:30 pm : The recovery effort has faded as the stock market moves downward. The energy sector (+0.4%) is the only sector in positive territory as it benefits from the high crude oil prices.

Amazon (AMZN 89.74, -0.79) is underperforming this session after being downgraded to Sell from Hold at Stifel. Stifel believes the market is now overly optimistic on margin expansion and growth projections.DJ30 -67.31 NASDAQ -6.65 SP500 -6.98 NASDAQ Dec/Adv/Vol 1704/1097/1.01 bln NYSE Dec/Adv/Vol 2117/998/529 mln

12:05 pm : The stock market has spent the session in negative territory, but has managed to pare a good portion of its early losses by the East Coast lunch hour. Record high oil prices, a tempered third quarter earnings outlook at LM Ericsson (ERIC 31.30, -9.63), and mixed earnings reports have weighed on stocks.

Crude oil futures reached an all-time high on concerns about the growing risk of a military strike by Turkey on the Kurds in northern Iraq. Crude oil futures are in record territory at $87.87 a barrel.

LM Ericsson's stock has been a notable underperformer today after the company issued a third quarter earnings warning "due to a shortfall in sales in mobile network upgrades and expansions which resulted in an unfavorable business mix."

Johnson & Johnson (JNJ 65.62, -0.03), a stock that is in Briefing.com's active portfolio, reported third quarter earnings of $1.06 per share, which beat the consensus estimate by $0.07. The company also raised its FY07 earnings guidance above the consensus estimate. Currency and strong growth rates overseas across all three of its major segments drove the performance this quarter.

Wells Fargo (WFC 34.69, -1.26) reported third quarter earnings of $0.68 per share, which is less than the consensus estimate expectations of $0.70. The company stated, "Losses have increased on a linked-quarter basis as the softness in the residential real estate market continued to impact consumers."

Meanwhile, US Bancorp (USB 32.39, -0.12) reported third quarter earnings of $0.67 per share, which is a penny better than the consensus estimate.

Separately, the Census Bureau reported that in September industrial production increased 0.1% and capacity utilization came in at 82.1%. The readings met the consensus estimate, so they had a muted effect on the stock market.

The materials (-1.3%) and financial (-1.2%) sectors are currently the main laggards. The energy (+0.4%) and telecom (+0.1%) sectors are leaders. DJ30 -51.78 NASDAQ -2.26 SP500 -5.98 NASDAQ Dec/Adv/Vol 1654/1121/911 mln NYSE Dec/Adv/Vol 2014/1070/467 mln

11:30 am : Since the last update, the major indices have had modest gains that have helped reduce some of their intraday losses.

Bear Stearns (BSC 122.87, +2.18) is a notable outperformer in the financial sector today. Reportedly, China Citic Bank wants to buy a stake in the company. DJ30 -68.61 NASDAQ -6.00 SP500 -6.48 NASDAQ Dec/Adv/Vol 1761/1000/768 mln NYSE Dec/Adv/Vol 2139/924/393 mln

11:00 am : The major indices have had a slight gain since the last update, but are still trading near their session lows.

Wells Fargo (WFC 34.45, -1.50) reported third quarter earnings of $0.68 per share, which is less than the consensus estimate expectations of $0.70. The company stated, "Losses have increased on a linked-quarter basis as the softness in the residential real estate market continued to impact consumers."

Crude oil futures are back over $87.00DJ30 -73.83 NASDAQ -12.43 SP500 -7.81 NASDAQ Dec/Adv/Vol 1826/859/599 mln NYSE Dec/Adv/Vol 2240/770/274 mln

10:30 am : After a bit of choppiness, the major indices have extended their losses. The financial sector (-1.8%) is the main drag. Briefing.com recently reiterated an Underweight rating for the sector. We had downgraded the sector to Underweight in April.

The utilities sector (+0.06%) now stands alone in positive territory with minute gains.

LM Ericsson's (ERIC 31.07, -9.86) stock, which is listed on the Nasdaq, is getting pummeled after the company tempered its third quarter outlook "due to a shortfall in sales in mobile network upgrades and expansions which resulted in an unfavorable business mix." DJ30 -97.95 NASDAQ -19.84 SP500 -11.29 NASDAQ Dec/Adv/Vol 1666/915/397 mln NYSE Dec/Adv/Vol 1981/928/169 mln

10:00 am : The major indices continue to trade in negative territory.

Seven of the ten major economic sectors are in the red. The materials (-1.3%) and financial (-1.2%) sectors are currently the laggards. The telecom (+0.7%) and utilities (+0.2%) sectors are leaders.

Crude oil is in record territory, but has eased off its early highs. A barrel of crude for November delivery is now up 0.5% to $86.55. DJ30 -36.8 NASDAQ -10.21 SP500 -5.76

09:40 am : The stock market opened lower. All-time high oil prices and a third quarter profit warning from LM Ericsson (ERIC) are weighing on the market.DJ30 -40.40 NASDAQ -11.58 SP500 -6.30

09:18 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -12.5. Futures do not immediately react to the industrial production report. The reading met the consensus estimate.

09:00 am : S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -9.0. Futures get a slight boost, but still point to a negative opening. Needham raised Google’s (GOOG) price target to $690.

08:30 am : S&P futures vs fair value: -5.9. Nasdaq futures vs fair value: -13.0. Wells Fargo’s (WFC) third quarter income missed the consensus estimate due to “softness in the residential real estate.” Crude oil is now up 1.6% to $87.54

08:00 am : S&P futures vs fair value: -6.0. Nasdaq futures vs fair value: -13.3. Futures point to a lower opening. Crude oil futures are continuing yesterday’s rally, prices are up 1.4% to $87.37. KeyCorp (KEY) and Stanley Furniture (STLY) came up short of consensus estimates and issued warnings for the fourth quarter. Meanwhile, Johnson & Johnson (JNJ) and US Bancorp (USB) beat their consensus estimates.

06:17 am : S&P futures vs fair value: -5.8. Nasdaq futures vs fair value: -11.5.

06:16 am : FTSE...6613.40...-31.10...-0.5%. DAX...7941.48...-27.99...-0.3%.

06:16 am : Nikkei...17137.92...-220.23...-1.3%. Hang Seng...28954.55...-586.23...-2.0%