MarketView for October 22

Summary

Both the Dow Jones Industrial Average and the S&P 500 indexes ended the trading day mostly unchanged on Monday after a late-day rally brought the indexes out of a major slump, as worries about slower global growth hitting corporate sales were offset by earnings that beat expectations. Technology shares led the day's gains and pushed the Nasdaq up 0.4 percent, as shares of Apple ended the day up 4 percent to close at $634.03. Apple is scheduled to report results on Thursday.

The S&P 500 closed on Monday just below its 50-day moving average of 1,434, which is considered my technical traders to be a strong support level, - after trading well below that level for much of the trading day.

Caterpillar is the latest company to exceed earnings expectations. However, at the same time the company fell short in its revenue forecast. The shares were down early in the trading day but the recovered in the rally to end the day up 1.5 percent, closing at $85.08. Caterpillar also reduced its 2012 forecast for the second time this year due to slowing global demand.

Earnings have generally been beating lowered expectations, but revenues are weak and profit warnings remain frequent. Of the 123 S&P 500 companies that have reported results so far, 60.2 percent have topped analysts' expectations for earnings, but 61 percent have missed revenue forecasts, according to Thomson Reuters data.

Third-quarter earnings are expected to fall 2.4 percent from a year ago, according to Thomson Reuters data.

In after hours trading, shares of Yahoo gained 4.2 percent to $16.43. The Internet company's quarterly earnings beat expectations and its CEO said it is economically attractive to repurchase the stock at current price levels. Yahoo's stock ended regular trading at $15.77, down 0.4 percent.

Shares of Texas Instruments fell 0.04 percent to $27.78 after the bell. The company posted a decline in revenue and forecast more weakness this quarter. The stock ended regular trading at $27.79, down 0.1 percent.

During the regular session, shares of mining company Freeport-McMoRan lost 1.5 percent to $40.58 after it said third-quarter profit fell sharply, missing Wall Street's estimates, because of a big drop in gold production in Indonesia.

On the up side was coal miner Peabody Energy. Its shares closed up 11.8 percent at $28.95 after the company reported a third-quarter earnings that exceeded analysts' expectations due to improved margins and higher Australian sales volumes that offset price declines.

Ancestry.com rose 7.8 percent to $31.44 after the company said it will be acquired by a group led by European private equity firm Permira in a $1.6 billion deal. Meanwhile approximately 5.8 billion shares changed hands on the major equity exchanges, as compared with the year-to-date average daily closing volume of 6.52 billion shares.