Energy shares drop; techs rise

The Dow slips as Microsoft boosts Nasdaq. Apple CEO Steve Jobs has a liver transplant. Financier Allen Stanford is indicted.

By Charley Blaine Jun 19, 2009 3:07PM

Charley BlaineUpdated: 11:55 p.m. ET.

 

Stocks ended the week lower for the first time in five weeks as declining energy shares offset gains in financial and technology shares.

 

The Dow Jones industrials ($INDU) were off 16 points to 8,540. The blue-chip index had been up as many as 61 points early in the day.

 

The Standard & Poor's 500 Index ($INX) was up 3 points to 921. And the Nasdaq Composite Index ($COMPX) was up 20 points to 1,827, with the Nasdaq-100 Index ($NDX.X) sporting a 17-point gain to 1,471.

 

A Federal Reserve meeting and reports on housing will affect markets in the week ahead.

 

For this week, the Dow was off 2.9%, with the S&P 500 off 2.7% and the Nasdaq down 1.7%. The weak market means that June is looking like a flat month. The Dow is up just 0.4%, the S&P 500 up 0.2% and the Nasdaq up 3%.

 

The Dow's loss this week meant that the index is now down 2.7% for the year. Only a week ago, the index finished ahead of its 2008 close of 8,776.39. The S&P 500 is still up 2% this year, with the Nasdaq up 15.9%.

Exxon Mobil (XOM) and Chevron (CVX) were the big weights on the Dow after crude oil moved lower. Bloomberg News said traders speculated that domestic supplies would rise this summer, forcing prices lower.

 

Crude closed down $1.82 a barrel, or 2.6%, to $69.55 a barrel in New York, down $1.89 or 2.7% from Thursday. Crude has fallen 5% since its June 11 intraday high of $73.23.

 

Wholesale gasoline futures fell even more -- 5.2% to $1.924. That could lead to a break in the rising retail price of gasoline, which has risen for 52 straight days. The national average price Friday was $2.690 a gallon, according to AAA's Daily Fuel Gauge Report, up from $2.685 a gallon on Thursday.

 

Markets for the week
Close for wk.Wk. ago close% chg.2009 YTD chg.
Dow industrials8,539.738,799.26-2.9%-2.7%
S&P 500921.23946.21-2.6%2.0%
Nasdaq 1,827.471,858.80-1.7%15.9%
Russell 2000512.72526.83-2.7%2.7%
Crude oil $69.55$72.04-3.5%55.9%
(per barrel)
10-yr. Treasury3.79%3.79%0.0%68.9%
Gold$936.20$940.70-0.5%5.9%
(per troy ounce)

 

Exxon Mobil, meanwhile, was down 0.6% to $71.05. Chevron was off 0.5% to $68.06. The stocks combined to subtract about 8 points from the Dow.

 

Exxon and Chevron were part of one market at work on Friday. Exxon Mobil

 

One is about commodity stocks like those two getting stressed.

 

Agriculture, fertilizer and metals stocks also have been hit this week. Despite rising 0.9% to $50.93, Freeport-McMoRan Copper & Gold (FCX) fell nealry 13% this week.

 

Seed and agricutural chemical maker Monsanto (MON), down 1.9% to $80.73, was off 6.8% for the week.

 

Energy prices -- New York close
 Fri.Thur.Month chg.YTD chg.
Crude oil $69.55$71.374.89%55.94%
(per barrel)
Heating oil$1.7867$1.83709.14%27.10%
(per gallon)
Natural gas $4.0320$4.09304.16%-28.28%
(per mil. BTY)
Unleaded gasoline$1.9244$2.02950.01%90.87%
(per gallon)
Retail gasoline$2.6900$2.68509.05%66.35%
(per gallon; AAA)

 

The other market was about technology stocks having a strong day.

 

Apple (AAPL) was up 2.7% to $139.48, thanks to the excitement over its new iPhone 3GS, which went on sale for the first time Friday. Microsoft

 

Late on Friday, The Wall Street Journal reported that CEO Steve Jobs had a liver transplant two months ago in Tennessee.

 

Jobs has been on medical leave since January but is expected to return to work later this month.

 

Microsoft (MSFT) was up 2.4% to $24.07, thanks to an upgrade from Goldman Sachs. The close was Microsoft's first above $24 since October. (Microsoft is the publisher of MSN Money.)

 

Goldman upgraded the shares to "conviction buy" from "buy" with a $29 price target on the stock. The Goldman analyst said revenue at Microsoft will help the company top profit forecasts.

 

The market was wrapped in some concern about expected volatility from a quadruple witching day.

Quadruple witching is the expiration of options on individual stocks, index options, single-stock futures and index futures.

 

Typically, this brings additional volatility to the market, with traders frantically selling or buying shares to deliver against their previous bets using futures and options contracts.

 

Friday, however, the volatility failed to emerge.

 

Meanwhile, another story was playing out -- the indictment of Sir R. Allen Stanford and other former executives in his financial company on fraud and obstruction charges.

 

Stanford, who already faces civil charges by the Securities and Exchange Commission, appeared before a federal magistrate judge in Richmond, Va., and will be transferred to Houston for a detention hearing.

 

In February, the SEC charged Stanford with orchestrating a massive Ponzi scheme, but he has denied the charges in several televised interviews.

 

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While Apple was higher, rival Research In Motion (RIMM) was down 4.9% to $72.78 after offering a disappointing forecast late Thursday.

The BlackBerry maker gave a weak revenue outlook for the current quarter late Thursday.

 

Investors worried about increased competition for RIM from Apple and Palm (PALM).

 

"You're only as hot as your latest device. RIM recognizes that," independent analyst Carmi Levy told Thomson Reuters.

 

Palm closed up 6.7% to $13.93.  

Financials were also in the spotlight, in part because of positive comments about Citigroup (C).

 

Rochdale Securities analyst Dick Bove initiated coverage of Citigroup with a "buy" rating and a $4 price target.

 

While Bove conceded that Citigroup was "an unusually controversial company" because of its loan losses, the company is "the only truly international bank in the world."

 

Citigroup shares were up 4 cents, or 1.3%, to $3.17 after rising as high as $3.21.

 

Fourteen of the 30 Dow stocks were higher. Bank of America (BAC) was the leader, up 2.5% to $13.22, followed by Microsoft. Consumer staples stocks Procter & Gamble (PG) and Kraft Foods (KFT) were the laggards.

 

Meanwhile, 282 S&P 500 stocks were higher, but 77 Nasdaq-100 stocks had gains.

 

Interest rates were lower, with the 10-year Treasury yield at 3.79%, down from 3.83% Thursday.

 

Housing and the Fed dominate next week

 

The market faces a fairly busy stretch next week. Events include:

 

The Federal Reserve's interest-rate announcement Wednesday. The Central Bank is expected to leave its short-term rate alone and signal it's not likely to raise rates soon. Critics have charged the Fed's interest-rate policy could reignite inflation.

Bernanke and Merrill. The Federal Reserve chairman will testify before Congress Thursday about the machinations that went on that resulted in Bank of America's purchase of Merrill Lynch. Bank of America CEO Ken Lewis has said he felt pressured by former Treasury Secretary Hank Paulson and Bernanke to buy the brokerage. But Lewis also reportedly turned down  recent offer to sell Merill back to former Merrill executives.

 

Existing-home sales and new-home sales on Tuesday and Wednesday, respectively. Economists expect some gains from April but declines from a year ago. Home builders Lennar (LEN) and KB Home (KBH) report quarterly results on Thursday and Friday, respectively.

 

Additional earnings. Reports are due Monday from Walgreen (WAG), supermarket chain Kroger (KR) and Oracle (ORCL) on Tuesday, Rite Aid (RAD) and Monsanto on Wednesday, and Palm on Thursday.

 

Elizabeth Strott contributed to this report.

 

Short hits from the markets -- New York close
 Fri.Thur.Month chg.YTD chg.
Treasury yields 
13-week Treasury bill0.170%0.170%30.77%47.83%
5-year Treasury note 2.804%2.838%19.47%80.79%
10-year Treasury note3.789%3.834%9.35%68.85%
30-year Treasury bond4.522%4.624%4.24%68.04%
Currencies  
U.S. Dollar Index80.63081.0101.68%-1.85%
British pound$1.6513$1.63481.96%12.07%
(in U.S. $)
U.S. $ in pounds£0.6056£0.6117-1.93%-10.77%
Euro in dollars$1.3961$1.3908-1.42%-0.35%
(in U.S. $)
U.S. $ in euros€ 0.7163€ 0.71901.44%0.35%
U.S. $ in yen 96.2296.560.98%6.14%
Canada dollar$0.882$0.883-3.80%7.79%
(in U.S. $)
U.S. dollar $1.135$1.1323.95%-7.23%
(in Canadian $)
Commodities    
Gold$936.20$934.60-4.50%5.87%
(per troy ounce)
Copper$2.2615$2.28202.91%60.39%
(per pound)
Silver$14.2000$14.2400-9.03%26.07%
(per troy ounce)
Corn$3.9925$4.0325-8.48%-1.90%
(per bushel)
Crude oil $69.55$71.374.89%55.94%
(per barrel)
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