Stock Market Update - Tue Oct 16 12:05:01 EDT 2007

[BRIEFING.COM] 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 underperforming 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.

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