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From Briefing.com: Weekly Recap - Week ending 21-Oct-11After another volatile week, stocks are closing the week out with a strong +1.9% gain, bringing the S&P 500 +1% vs. last Friday's close. Although earnings season picked up this week, the market remains preoccupied with Europe and the steady stream of back-and-forth headlines from various "officials" that flow out of the region. While a definitive plan remains to be seen, market participants seem to be giving policymakers the benefit of the doubt that they are making progress towards one. This weekend brings the first of two upcoming EU summits, although EU leaders have managed to lower expectations for this meeting and a plan is not expected until the follow-up summit midweek next week.

This week's swings have been heavily influenced by Europe. The markets sold off Monday and early on Tuesday, with weak Chinese data and a Goldman (GS) earnings miss weighing. However, late Tuesday stocks rallied on reports that Germany and France were looking to increase the size of the EFSF. Wednesday was less eventful, and then yesterday stocks saw another late-day rally. That strength is continuing today after reports indicated that Germany and France are on the same page with regard to a European bailout plan.

Outside of Europe, earnings remained the next most important topic of interest during the week. Overall the Q3 earnings season has gotten off to a decent start, with about 70% of companies beating EPS estimates. However, the stock reactions to the reports have been more mixed. It is reasonable to expect the percentage of companies beating expectations to decline somewhat as we progress through earnings season, as the size of companies reporting tends to decline.

Some earnings highlights from the week include the following:

Monday afternoon IBM (IBM) beat and raised EPS expectations but also reported a slight miss on the top line. The stock fell 4% on Tuesday and is down 3.5% on the week vs. a 1.2% gain in the S&P 500. Apple (AAPL) surprised the Street on Tuesday afternoon when it missed Q3 EPS estimates and issued an upside Q4 outlook. The company usually blows out estimates and gives very conservative guidance. iPhone 4 sales came up short as consumers held off for the iPhones 4S, released late last week.

Looking at the financials, Monday was a tale of two banks. Citi (C) reported a solid quarter which sent the stock 7% higher, while Wells Fargo (WFC) missed and fell 8%. On Tuesday morning, BofA (BAC) reported a noisy quarter while Goldman Sachs (GS) missed expectations and reported its second ever quarterly loss as a public company. Ironically, both stocks rallied and the financial sector led the broader market higher that day with a 4.8% gain. In general, forward estimates have come down for the money center banks, but seasonal loan growth and continued favorable loss trends have allayed some fears.

Industrial companies have further eased fears that we are on the verge of a recession. W. W. Grainger (GWW), Parker Hannifin (PH), CSX (CSX), Union Pacific (UNP) and this morning Honeywell (HON) all provided relatively upbeat outlooks.

There are hundreds of earnings reports due out next week, including results from Caterpillar (CAT), Netflix (NFLX), Amgen (AMGN), United Steel (X), UBS (UBS), F5 Networks (FFIV), Rightnow Technologies (RNOW), Broadcom (BRCM), Novellus (NVLS), Aflac (AFL), Akamai (AKAM), Triquint Semi (TQNT), Visa (V), Moody's (MCO) and Potash Corp (POT), among others. Please view our earnings calendar for a full schedule of dates/times and related expectations.

 
 Index	   Started Week   Ended Week   Change	%Change  YTD % 
 DJIA	     11644.49	  11808.79     164.30	  1.4	 2.0 
 Nasdaq	      2667.85	   2637.46     -30.39	 -1.1	-0.6 
 S&P 500	      1224.58	   1238.25	13.67	  1.1	-1.5 
 Russell 2000   712.38	    712.42	 0.04	  0.0	-9.1

8:01AM Jabil Circuit authorizes a repurchase of up to $100 mln shares of common stock (JBL) 19.30 :

10:57 am Seagate Tops First Quarter Earnings Expectations (STX)
Seagate (STZ $20.19 +0.09) reported first quarter earnings of $0.34 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.31.

Revenues rose 4.2% year/year to $2.81 billion versus the $2.9 billion consensus.

The company announces the European Commission announced on October 19, 2011 that they have approved under the EU Merger Regulation, Seagate's proposed acquisition of Samsung's hard disk drive assets. The company will continue to work with other regulatory bodies to secure additional approvals in the coming weeks. Seagate believes the transaction will close by the end of calendar year 2011.

10:15 am General Electric Reports In-line Earnings (GE)
General Electric (GE $16.33 -0.30) reported third quarter earnings of $0.31 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.31. During the quarter, GE gave notice of redemption for the preferred stock held by Berkshire Hathaway, and subsequently redeemed the shares on October 17, 2011 for $3.3 billion. As expected, the redemption resulted in a $0.08 per share one-time impact. GAAP EPS was $0.22.

Revenues were unchanged from the year-ago period at $35.37 billion (+12% ex-NBCU).

For its fiscal year 2012, the company expects operating EPS growth in the double digits versus estimates calling for growth of 15.2% over fiscal year 2011 consensus.

Industrial orders grew 16% year/year, which is the fourth straight quarter of double-digit growth. GE also announced more than $3 billion in new customer wins across its Energy business during the quarter. GE's third quarter Industrial segment revenues were $23.4 billion, up 19%. GE's Industrial segments experienced double-digit revenue growth both domestically and internationally with international revenues up 25% driven by strong double-digit growth in Brazil, Russia, China, India, Canada, Mexico and the Middle East.

"GE Capital executed across all of its businesses, earning $1.5 billion after tax, an increase of 79% year/year. We grew GE Capital volume to $43 billion, up 15%. GE Capital's margins remained strong at 5.4% year-to-date and the business continues to benefit from the credit cycle recovery. GE Capital continued to strengthen its capital ratios and liquidity during the quarter. GECC and GECS Tier 1 common ratios were up to 11.0% and 9.6% and we have reduced leverage across the portfolio."

Total segment profit was up 15% to $4.7 billion. Margins declined from a year-ago primarily driven by Wind pricing in Energy. GE expects Industrial margins to improve sequentially in fourth quarter. At quarter-end GE had $91 billion of consolidated cash. GE's cash position enabled the co to repurchase $1 billion of common stock during the third quarter and has enabled $3.7 billion in stock repurchases since the buyback program was restarted in the third quarter 2010.

10:10 am Microsoft Reports In-line Earnings for the First Quarter (MSFT)
Microsoft (MSFT $26.82 -0.22) reported first quarter earnings of $0.68 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.68.

Revenues rose 7.3% year/year to $17.37 billion versus the $17.19 bln consensus.

The Microsoft Business Division reported $5.62 billion in first quarter revenue, an 8% increase from the prior year period which included the launch of Office 2010. The Server & Tools segment posted $4.25 billion in first quarter revenue, a 10% increase over the prior year period and the sixth consecutive quarter of double-digit revenue growth. Windows and Windows Live Division revenue was $4.87 billion, a 2% increase over the prior period, in line with the PC market.

The company offers updated fiscal 2012 operating expense guidance, including Skype and the associated acquisition-related expenses, of $28.6 billion to $29.2 billion. "We saw customer demand across the breadth of our products, resulting in record first-quarter revenue and another quarter of solid EPS growth."

Last night, Altera (ALTR $36.31 +3.28) reported third quarter earnings of $0.57 per share, $0.02 worse than the Capital IQ consensus of $0.59, while revenues fell 4.7% year/year to $522.5 million versus the $542.8 mln consensus. The company issued downside guidance for the fourth quarter with revenues of down 7-11% QoQ to apporxmately $465.0-485.9 million versus the $532.90 million consensus and gross margin 69.5-70.5%. "Customer reaction to changing global macroeconomic conditions reduced industry demand. Despite this near-term deceleration we saw further growth from our 40-nm products and are very pleased with the successful launch of our 28-nm FPGAs."

Aixtron (AIXG $12.75 -0.53) was downgraded to Hold from Buy at Kaufman Bros and the firm lowered their tgt to $14 from $22 to reflect demand weakness and competitive challenges. The firm says, while most analysts have adjusted forecasts for the GCL order cancellation, some estimates have not been revised. They believe these outliers are artificially elevating consensus estimates and they don't expect the stock to move higher until these expectations have been reset at lower levels.