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Market Wrap: Economists Still Grim on Growth; Jobless Claims Show Improvement; RIM's New Open Device Policy; Icahn Bidding for Defense

October 11, 2012 5:20 PM EDT
Market wrap-up for October 11th

End of the Day: S&P 500 up 0.3 to 1,432.84; Dow Jones down 18.6 to 13,326.39; Nasdaq down 2.4 to 3,049.41

The following is a brief summary of events moving markets today:
  • According to a WSJ poll of 48 economists, the grim reality is that unemployment will still be unnervingly high into the middle of next year, hanging somewhere around 7.8 percent in June. Most of the reasoning behind the outlook is the economic growth outlook, which will be below 2 percent at least in the first-half of 2013.

    Slow growth is expected to last through 2014, respondents stated.

    At least the holidays are coming up.

  • Another piece in the "Mysterious Unemployment Drop" puzzle revealed: Initial claims were 339,000 for the week ended October 6th, down from 369,000 apps in the prior week and expectations of 370,000 apps. The 4-week moving average was 364,000, a decrease of 11,500 from the previous week's revised average of 375,500.

    Those receiving continuing benefits was just about flat at 3.273 million.

  • Activist investor Carl Icahn has a new target in his sights, and investors are saying "Oh my B'Gosh!": Earlier in the session, Icahn said he was making a hostile bid for Oshkosh Corp. (NYSE: OSK) shares at $32.50 each. According to the release, "Mr. Icahn sought board representation at last year’s annual meeting in an effort to correct what we consider to be long standing problems facing Oshkosh, problems that we believe have contributed to a value gap between the stock price and the value of the assets. After the proxy campaign last year, management of Oshkosh has made lofty promises reminiscent of a politician’s campaign promises. However, it appears to us that instead of any true progress towards unlocking shareholder value, the company has only presented a combination of slogans and aggressive long term projections showing that profitability will increase over the next several years, assuming the economy in the U.S. totally recovers. In our opinion, management has repeatedly refused to take any strategic alternatives seriously, claiming only to quietly “study” options internally."

    (Note: we understand that the childrens clothing company and defense systems giant are not related.)

  • Buy, buy, buy!: Freddie Mac said mortgage rate rose over the past week, with 30-year fixed-rate loans averaging 3.39 percent from 3.36 the prior week and 4.12 percent in the last year. 15--year fixed-rate rose from 2.69 percent to 2.70 percent.

  • Also, bring a dish to pass: Research In Motion (Nasdaq: RIMM) is throwing a wireless party and the only condition is that its BYOD (bring your own device). RIM's new Mobile Fusion effort will allow devices from competitors, including Apple, to run on its network as it looks to retain a core showing of business customers into the broader roll out of its BlackBerry 10 operating system and devices next year.

  • At the Nexus of the universe: Apple (Nasdaq: AAPL) ended up slipping most of the session and ending lower following reports that a U.S. Court of Appearls reversed an earlier injunction preventing sales of Samsung's Galaxy Nexus. The Court of Appeals said that the judge in the original case, Lucy Koh, abused her discretion in barring the Nexus sales.

  • Gasoline price index? It's always higher: Crude ended higher on the session as tensions in the Middle East continued to mount. Turkey forced a Syrian passenger jet to land on Wednesday on suspicion it was ferrying military equipment from Russia to Syria. The move caused outcry from Russia, which said it endangered Russian lives, as well as from Syria, who said it was an act of piracy.

    Either way you look at it, crude ended up 92 cents higher to $92.07 per barrel on the Comex.

  • Is it gassy in here?: Speaking of commodities, nat gas hit a high price for 2012 today on the back of new data. The Energy Information Administration (EIA) said stockpiles rose 72 billion cubic feet last week, lower than analyst estimates calling for a rise of 79 bcf. Stockpiles rose 108 bcf in the same period last year. Overall, stocks are at 3.725 trillion cubic feet, a high for the year.

    November contracts rose 12.9 cents to $3.604 per mmBtu on the Comex.
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