Working Hard, or Hardly Working?

We all know people who like to brag about how many hours they put in at work: Fifty hours a week, or sixty, or even seventy or more, which means they're putting in ten hours a day, seven days a week. It's almost more than normal humans can bear.

It should come as no surprise that a recent study conducted by researchers at the University of Maryland confirms what we've always suspected: These people are lying. People who claim they work 55 to 64 hours a week, the study found, tend to exaggerate that number by about 10 hours. Those saying they work 65 to 74 hours a week are generally off by more like 20 hours.

In general, people overstate their work hours by about 5 to 10 percent. So if you're not working his weekend, don't feel guilty: Your colleagues probably aren't working as much as they claim to be, either.

A Big Day for Earnings

Today may be the biggest day of the current earnings season, with three Dow components slated to report, as well as two other hugely important stocks: Google and Morgan Stanley. Here's what to watch for:

Morgan Stanley While other banks have surprised on the upside this quarter, Morgan Stanley looks like it will be a disappointment. The analysts' consensus for earnings of $1.14 a share would be a 79 percent decline from the same quarter a year earlier.

Verizon This Dow stock is forecast to post earnings of 65 cents a share, up 15 percent from a year earlier. It will also provide a hint as to how Apple will do, since so more than 3 million iPhones rely on the Verizon network.

Travelers Its third quarter earnings forecast of $1.54 a share would be double the figure from a year earlier. Travelers has been one of the Dow's top performers, up 21 percent so far this year.

Microsoft Its earnings are expected to be just 56 cents a share, down 17 percent from the year before. Microsoft's fortunes may turn on October 26, when it introduces its Surface tablet.

Google Quarterly earnings are expected at a whopping $8.74 a share, although that's an increase of just 9 percent from a year earlier.



 

The Good News in Housing

In a welcome bit of good news for the economy, housing starts surged forward in September, according to figures released today by the Commerce Department. The 15 percent gain in new home construction for that month put housing starts overall at their highest level since 2008.

And there are signs that this housing recovery could have some legs. Commerce also reported that new building permits increased by 12 percent, signaling that the boom in construction could continue for some time. And the third quarter of 2012 marked the sixth consecutive quarter in which housing starts improved.

Remember, the Fed's latest round of quantitative easing involved buying up mortgage-backed bonds. All this activity seems to be putting the still-shaky housing market back onto much more stable footing.

Closing In on a Record

This week's issue of Barron's magazine celebrates the fact that the Dow Jones industrial average is closing in on its all-time high, which it reached just over five years ago on October 9, 2007. The Dow closed that day at 14,164.53; it closed yesterday at 13,424.23, or 5.5 percent short of the record. That puts it around one really strong week away from setting a new record.

The S&P 500 also peaked on October 9, 2007, reaching its all-time high of 1565.15. The closest it has come to reaching those heights again was on September 14 of this year, when it peaked at 1465.77, or 6.8 percent short of the record. Yesterday's close of 1440.13 left it needing a gain of about 11 percent to get back to that all-time high.

The Nasdaq, on the other hand, is still a long ways away from its record highs, achieved during the dot-com days. It peaked way back on March 10, 2000, when the index closed at 5048.62, but it hasn't even been above 4000 since September of 2000. Yesterday's close of 3064.18 left it a whopping 65 percent shy of its all-time high.

Scary Doings in October

Coming up this Friday is the 25th anniversary of the single-biggest drop in the history of the stock market: the infamous Black Friday, October 19, 1987. On that day, the S&P 500 lost more than 20 percent of its value, which is more than twice as much as it's fallen on any other day in history, except one.

That one exception also happened in October - the crash on October 28, 1929, that kicked off the Great Depression. The S&P 500 lost 12.3 percent of its value that day. While we saw some bounceback in the market back in 1987, on the next trading day in 1929, on October 29, the S&P dropped another 10.2 percent, marking the third-worst day in market history.

Also among the top ten biggest market drops is yet another October day; back in 1937, on October 18, the S&P dropped by 9.3 percent. So four of the worst ten single-day losses happened in October. Let's hope we avoid that fate in the next three weeks.

A Big Day for IPOs

The IPO market got a bit of a black eye earlier this year after the over-hyped, underperforming Facebook offering. But it appears to be coming back to life now. Yesterday there were four brand-new stocks that came to the market, and all four of them increased by more than 20 percent right out of the box.

If you lived through the dot-com-mania of the late 1990s, that might not seem so impressive. But according to research done by Dealogic, there haven't been four IPOs with that kind of pop on the same day in 12 years.

The big four are:

Shutterstock, up 29 percent
Intercept Pharmaceuticals, up 26 percent
Realogy, up 23 percent
Kythera Biopharmaceuticals, up 20 percent

And lest you think these are all microcaps, the Realogy offering raised $1 billion, making it the third-largest IPO of 2012.

The Rise - and Fall - of Stocks

It's startling to take a step back and realize that it wasn't so long ago that owning stocks was considered a rare and privileged thing.In 1980, according to figures compiled by the Investment Company Institute, just 19 percent of all U.S. households owned equities. By 1999, fueled by the rise of 401(k)s, nearly half of American households – 48.2 percent – held equities in one form or another, whether that was stocks, mutual fund or annuities.

But it wasn’t just retirement plans; 35.5 percent of households owned stocks outside of an employer-sponsored retirement plan. The bull markets of the 1980s and 1990s brought a huge number of small investors into the equity markets.

Those numbers have been pared back over the past decade, though. Equity ownership climbed to 53 percent of American households in 2001, but has since fallen back to 46.4 percent. The crash of 2008-2009 seems to have scared a lot of people away for good.