Stocks opened down this morning following the earnings report Apple Inc. (NASDAQ: AAPL) after markets closed yesterday. Moody’s downgrade of Spain’s sovereign debt also weighed on the opening.  The Consumer Price Index for urban consumers rose by 0.3%, and just 0.1% excluding energy and food costs. Housing starts rose by an unexpected 15% as condos and apartment construction was prompted by more demand for rental units to push markets to a mid-morning gain, but by noon share prices had given a lot of that back on continuing uncertainty about what’s really happening in Europe.  The Federal Reserve Beige Book was released at 2 p.m. ET, and its uninspiring reports sent markets sharply lower, from about 25 points up on the Dow to more than 70 points below yesterday’s close.

The unofficial closing bells put the DJIA down nearly 72 points to 11,504.70, the NASDAQ fell more than 53 points (2.01%) to2,604.04, and the S&P 500 fell 1.26% or more than 15 points to 1,209.89.

Today’s top analyst upgrade and downgrade calls were numerous and included Wal-Mart Stores Inc. (NYSE: WMT) and Whole Foods Markets Inc. (NASDAQ: WFM), and about a dozen other companies.

Morgan Stanley (NYSE: MS) reported better than expected earnings for the quarter, following  yesterday’s positive report from Bank of America Corp. (NYSE: BAC).  Morgan Stanley got a big lift from an accounting gain that lowered the value of its debt by $3.4 billion, thus boosting the bank’s revenue to $9.9 billion. Even without the gain, MS posted EPS of $0.02, There has been a turnaround from the indicated loss in Bank of America Corporation (NYSE: BAC) after its earnings showed that book value managed to actually grow and the stock was up almost 10% at $6.63 late in the session.

As far as the other big earnings report reactions today (prices within 20 minutes of the closing bell): Apple is down more than -5.5%, at $398.78; Morgan Stanley up 0.3%, at $16.68; Intel Corp. (NASDAQ: INTC) is up about 3.5%, at $24.22; Yahoo is up 2.78%, at $15.90.

Several other standouts from today are as follows…

Williams Companies, Inc. (NYSE: WMB) rose again by another 1.7%, to $29.55, after investors are considering it a cheap merger alternative to the El Paso buyout by Kinder Morgan this week.

Human Genome Sciences, Inc. (NASDAQ: HGSI) had another big day on merger speculation up, up nearly 8%, at $13.83, and here is how it ranks with analysts other price targets for biotechs ahead of the biotech earnings floodgates.

Abbot Laboratories (NYSE: ABT) rose 1.62%, to $53.29, following the announcement of the company’s intention to split its branded drug business from its other product lines.

Oxigene, Inc. (NASDAQ: OXGN)  got a nice boost of about 12.55%, to $1.59, following good data on the survival benefits of its anti-thyroid cancer drug.

Powerwave Technologies, Inc. (NASDAQ: PWAV) warned of a revenue shortfall of more than 50% for its third quarter. The shares lost nearly -42% of their value, to fall to $0.85, after posting a new 52-week low of $0.68 earlier in the day.

Agnico-Eagle Mines Ltd. (NYSE: AEM) has suspended operations indefinitely at its mine in Val d’Or, Quebec, due to unstable ground and inflows of water. The stock has fallen by -19%, to $46.21.

Stay tuned for Thursday.  We have speeches to watch from Lockhart and Kocherlakota on the docket as well as a 30-year TIPS auction.  Here are some economic releases due in the morning and throughout the day:

• 8:30 Unemployment Benefits Claims for last week
• 8:30 Existing Home Sales
• 10:00 Conference Board’s Index of Leading Economic Indicators
• 10:30 Natural Gas Report
• 4:30 PM Federal Reserve Balance Sheet

Paul Ausick

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