While Project Runway crowned its new top designer, the Dow turned heads while it hit new, fashionable levels.

The market opened its show on Monday with renewed optimism over earnings season pushing stocks up, and the Dow setting another record-setting high.

Stocks couldn't fashion a winning style on Tuesday after stronger-than-expected producer price index data sparked concerns about inflation. The Dow fell almost 100 points before rebounding to close down only 30 points.

The market put on a better performance the next two days. On Wednesday, the Dow even hit a high of 12,049.51 before losing ground because of mixed housing and inflation data. The Dow closed above 12,000 for the first time on Thursday amid mixed earnings reports.

On Friday, the major indexes closed narrowly mixed after a disappointing earnings report from Caterpillar weighed on the Dow.

The Federal Open Market Committee meeting beginning Tuesday and culminating with an announcement Wednesday afternoon will grab attention this week. Other economic data that will be released includes the State Street Investor Confidence Index on Tuesday, existing home sales on Wednesday, durable goods orders and new home sales on Thursday, and third-quarter (advance) gross domestic product and consumer sentiment on Friday.

Companies reporting earnings Monday include American Express, AT&T, Ford,Halliburton, Kimberly Clark, and Xerox, and Tuesday's lineup includes Amazon, BellSouth, Centex, Chicago Mercantile, Coach, Corning, JetBlue, KLA-Tencor, Level 3, PaneraBread, and Cheesecake Factory. On Wednesday, we'll hear from Anheuser-Busch, Applebee's, Boeing, Celera Genomics, DaimlerChrysler, Estee Lauder, General Motors, Harrah's, Intralase, P.F. Chang's, RadioShack, TASER, Timken, Unisys, Weyerhaeuser, and Wright Medical. On Thursday, it's Aetna, Bristol-Myers, Goodrich, Kellogg, Millennium Pharmaceuticals, NYSE Group, Sepracor, Sony, SprintNextel, Starwood Hotels, St. Paul Travelers, Tim Hortons, and Wendy's. Finally, Avon, Cardinal Health, and Chevron will report on Friday.

Stay market-tuned and Foolish!

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Foolish Quiz

1. The Dow's 1,000-point advance to 12,000 occurred over:

(a) three years (b) five years (c) seven years

2. True or false: S&P 500 stocks have recorded double-digit earnings growth for the past 12 consecutive quarters.

3. True or false: News of the Chicago Mercantile Exchange (NYSE:CME) acquiring CBOT (NYSE:BOT) sent shares of both companies higher last week.

4. True or false: A strong earnings report from IBM (NYSE:IBM) accounted for more than half of the Dow's advance on Wednesday.

5. Which investment bank posted stronger earnings: JPMorgan Chase or Merrill Lynch (NYSE:MER)?

6. Which big pharma reported healthier earnings: Merck or Pfizer?

7. Which Internet search engine's earnings disappointed investors: Google or Yahoo! (NASDAQ:YHOO)?

8. Shares of which company rose Tuesday after it announced an acquisition: Eli Lilly or Level 3 (NASDAQ:LVLT)?

9. Who had better watch his diet: Dick Grasso or Disney's (NYSE:DIS) Winnie the Pooh?

10. True or false: Project Runway's finale benefited the share prices of its benefactors last week.


1. (c). The Dow first closed above 11,000 in May 1999.

2. True. And it looks like a 13th consecutive quarter of double-digits earnings growth is on tap.

3. False. While Tuesday's news about the Chicago Mercantile Exchange's $8 billion purchase of CBOT, the parent of the Chicago Board of Trade, sent shares of both companies higher that day, the mercantile exchange's gains were lost the next few days. For the week, shares of the Merc dropped 2.1%, while those of CBOT rose 7.3%. The transaction will create the world's largest futures exchange.

4. True. Big Blue's 3.3% gain accounted for 23 of the Dow's 42-point rise on Wednesday. The company reported after Tuesday's closing bell that its third-quarter profit rose 47%, beating expectations and showing gains from the global services division.

5. Merrill Lynch. Its third-quarter profits more than doubled because of a one-time gain from the merger with the money management division of Black Rock, as well as fees from fixed-income trading and merger advisory services. Shares advanced 0.5% on Tuesday.

The next day, JPMorgan Chase reported a 32% increase in its third-quarter earnings, attributed to investment banking and market activity. The retail banking and credit card divisions did not perform as well. The company said its fourth-quarter results might be lower, and shares slipped 1.6%.

6. Pfizer. Third-quarter profits rose, helped by a 9% increase in revenues, which was boosted by a 15% increase in sales of cholesterol-lowering drug Lipitor. The company did, however, cut its revenue forecast for 2007 and 2008.

Merck's net profit fell 34% in the third quarter because of a 65% drop in sales of Zocor, Merck's cholesterol-lowering agent, legal expenses from the Vioxx trials, and restructuring.

7. Yahoo! Shareholders cried as shares fell 4.8% on Wednesday after the company reported a 38% drop in third-quarter net income and reduced its full-year outlook.

Google shareholders celebrated the company's better-than-expected 70% growth in third-quarter revenues and the near-doubling of profits by sending the shares up 7.9% on Friday. International sales and advertising growth contributed to the higher figures.

8. Shares of Level 3 rose 13% after it announced that it will acquire Broadwing for $1.4 billion. Shares of Broadwing were up 19.7%. Eli Lilly shares slipped 0.2% after the company said it will take over Icos for $2.1 billion to gain full ownership of the drug Cialis. Shares of Icos rose 16%.

9. Pooh Bear. No one is telling former Big Board leader Dick Grasso what to eat, but a New York judge ruled that he will have to repay the New York Stock Exchange "tens of millions of dollars" of his retirement compensation package. Grasso plans to appeal the ruling.

Walt Disney announced that its characters can no longer be associated with marketing unhealthy foods to children. The company will begin serving healthier meals at its parks and extend new guidelines to licensing deals with fast-food restaurants. Maybe Pooh will share from his honey pot.

10. False. Although the show's finale set a viewership record for Bravo and was the top-rated cable show on Wednesday, it did not cheer the shares of either General Electric, the majority owner of NBC Universal (which owns Bravo), or Federated, the owner of Macy's (one of the show's sponsors). GE shares fell 1.4% for the week, while those of Federated slipped 1.3%. Last week, GE announced job cuts at NBC Universal and an increased emphasis on reality TV.


  • 8-10 correct: Foolishly impressive.
  • 6-7 correct: Almost Foolish.
  • 1-5 correct: OK, but just barely.
  • 0 correct: Really?! Keep reading the Fool, and watch your scores improve!

Pfizer and Anheuser-Busch are Motley Fool Inside Value picks. Disney, Yahoo!, and Amazon are Motley Fool Stock Advisor selections. Eli Lilly, JPMorgan, and Level 3 are Motley Fool Income Investor picks, while Millennium, Taser, and NYSE Group are Motley Fool Rule Breakers recommendations. Merck used to be an Income Investor pick. Whatever your investing style, the Fool has a newsletter for you.

Fool contributor S.J. Caplan, a former vice president and assistant general counsel of Goldman Sachs and a former vice president and derivative finance specialist at Lehman Brothers, owns shares of Google and The NYSE Group. She serves as an arbitrator for the New York Stock Exchange and the National Association of Securities Dealers, or NASD. The Fool has a disclosure policy.