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AIG earnings beat forecasts; Herbalife's big miss

Monday, November 03, 2014 - 02:23

Stocks fall back from intraday highs; After hours hit from AIG, miss from Herbalife. Bobbi Rebell reports.

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AIG earnings coming in strong - after tax income jumping 23 percent. The insurance company beating forecasts thanks to improved performance at their core insurance operations, and adding to their stock buyback program. Herbalife reporting very dissapointing earnings- and guidance - sending shares tumbling in the after hours session. This follows news earlier in the day that Herbalife will pay $15 million to settle a class action suit alleging it was running a pyramid scheme. The major U.S. indexes closed mixed - despite the Dow and S&P 500 hitting new intraday highs. Crude oil closing lower - continuing its downward trend. This all comes before the U.S. midterm election Tuesday. S&P's chief U.S. economist Beth Ann Bovino: (SOUNDBITE) BETH ANN BOVINO, CHIEF U.S. ECONOMIST, S&P, (ENGLISH) SAYING: "The Republicans are a little bit more concerned and certainly want to clip the wings of the Federal Reserve as had been talked about in the past. This may give them more power to do so. I don't think they'll get very far with that, but if that was the case, it does put the economy a little bit more at risk. " Shares of big U.S. automakers like GM and Ford gave ground even though they reported their strongest October sales in years. Kelley Blue Book senior analyst Karl Bauer says GM managed its pricing well. (SOUNDBITE) KARL BAUER, SENIOR ANALYST, KELLEY BLUE BOOK, (ENGLISH) SAYING: "I think General Motors is proud of the fact that they have got one of the lowest incentives levels going on and some of the highest average transaction prices that they have ever had and so that means profit." Sapient rocketed higher on merger Monday. The digital ad specialist is getting married to a Frenchman, ad giant Publicis, in a $3.7 billion deal. But a SunTrust analyst says other bidders may emerge for Sapient. In another deal, shares of medical research firm Covance shot up after it agreed to be bought by the diagnostic services company, Laboratory Corp. of America, for $6.1 billion. Economic news was mixed. Construction spending unexpectedly fell in September. And, while Markit's final reading on manufacturing showed the lowest growth rate since July, the Institute for Supply Management's factory activity index unexpectedly rose last month. In Europe, weakness in utilities stocks and weak manufacturing data dragged the major indices lower.

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AIG earnings beat forecasts; Herbalife's big miss

Monday, November 03, 2014 - 02:23