Dow falls 163 on European fears and Intel warning
But US stocks rebound from early lows after Moody's says last week's eurozone summit solved nothing. Intel cuts its revenue outlook. Gold drops below $1,700. The Fed meets Tuesday.
Updated: 10:13 p.m. ETInvestors spent the weekend thinking about the European debt deal and liked it a lot less than they did on Friday.
So, stocks gave up much of their gains from Friday. The euro fell to its lowest level against the dollar in two months as many investors sought safety. Gold (-GC) tumbled below $1,700 an ounce for the first time since Nov. 25; crude oil (-CL) settled below $98. If you wanted some holiday cheer, you got it in a rebound that cut the losses for stocks by about a third.
The European problem came into sharp focus when Moody's Investor Service said over the weekend that last week's agreement by all European Union countries to stricter fiscal controls doesn't solve their problems.
Adding to the gloom was a profit warning from Intel (INTC), down $1.01 to $24. The chip giant now expects fourth-quarter revenue of $13.4 billion to $14 billion, down from a prior forecast of $14.2 billion to $15.2 billion. Analysts had expected $14.65 billion. Personal computer sales will be lower than expected because of hard-drive shortages, the result of heavy flooding in Thailand earlier this year.
The Dow Jones industrials ($INDU) closed down 163 points, or 1.3%, to 12,021. The blue chips had been down as many as 243 points. The Standard & Poor's 500 Index ($INX) was off 19 points, or 1.5%, to 1,236 after falling nearly 28 points. The Nasdaq Composite Index ($COMPX) was off 35 points, or 1.3%, to 2,612.
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The Dow's decline marks the third straight day of gains or losses of 160 points or more. The index fell 199 points on Thursday and gained 187 points on Friday.
Futures trading suggests the market may open higher on Tuesday.
For the technically minded, the S&P 500 in the morning fell through important support at 1,233 -- a level that should have generated new buying. But the index found support at 1,227 and ended the day back above 1,233.
The sell-off was broad, though volume was light. Only 522 million shares changed hands on the floor of the New York Stock Exchange.
Only two of the 30 Dow stocks finished higher: McDonald's (MCD), up 45 cents to $98.48, and WaltDisney (DIS), up 9 cents to $36.65.
Meanwhile, 36 S&P 500 stocks were higher, led by Vulcan Materials (VMC), a hostile takeover target, up $5.15 to $38.70
Only 17 stocks in the Nasdaq-100 Index ($NDX) were higher, led by Netflix (NFLX), up $4.37 to $75.26. Netflix was rising on speculation that Verizon Communications (VZ) might make a bid for the video streaming company.
The index, however, was down 24 points, or 1.1%, to 2,294. Intel was among the biggest problems. All of the stocks in the Philadelphia Semiconductor Index ($SOX) were lower. The index was down was down 13 points, or 3.4% to 363.
Meanwhile, the dollar was up 1% against the euro and by small amounts against the British pound and the yen. U.S. interest rates moved lower as a result. The 10-year Treasury yield was 2.009%, down from Friday's 2.05%.
Crude oil settled down $1.64 to $97.77 a barrel. Silver (-SI) dropped $1.251 to $31.002 an ounce. Copper (-HG) dropped 9.35 cents to $3.464 a pound. It's off 22.1% for the year, a price drop that has worried many economists about global economic prospects in 2012. Gold settled down $48.60 to $1,668.20 an ounce.
| Energy prices -- New York close | ||||||||||||
| Mon. | Fri. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $97.77 | $99.41 | -2.58% | 6.99% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $2.8961 | $2.9125 | -4.26% | 13.85% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $3.2540 | $3.3170 | -8.34% | -26.13% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.5636 | $2.5961 | 0.20% | 4.50% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $107.26 | $108.62 | -2.95% | 13.20% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.2740 | $3.2790 | -0.64% | 6.58% | ||||||||
| (per gallon; AAA) | ||||||||||||
Dowgrades ahead for European bonds
Because of the uncertainty after last week's summit, most European countries face downgrades on their government bonds in the next few months. Moody's is expected to decide on downgrades in the first quarter of 2012.
Standard & Poor's is expected to follow up soon on its rating decision for the sovereign debt of eurozone countries. The ratings firm put a negative credit watch on the region last week, saying it would conclude its review after the EU summit.
Yields on Italian and French bonds moved higher.
A big week with the Fed, earnings, Zynga's IPO
The sell-off comes at the start of a week that has the potential for a fair amount of drama.
The Federal Reserve will meet Tuesday to discuss interest rates and monetary policy. There is an important report on retail sales for November due on Tuesday, along with reports on wholesale and consumer inflation on Thursday and Friday.
Plus, Congress is wrangling over the terms of a new spending bill to keep the government running beyond Friday.
General Electric (GE) will holds its annual business outlook conference Tuesday afternoon. Plus, there are earnings due from Best Buy (BBY) on Tuesday, Joy Global (JOYG) on Wednesday and FedEx (FDX) and Research In Motion (RIMM) on Thursday.
Zynga is expected to price its initial public offering after Thursday's close. The social-gaming company plans to offer as much as $1 billion of stock, selling 100 million shares for $8.50 to $10 each.
Also expected to go public is Michael Kors Holdings, a Hong Kong-based luxury apparel retailer. Kors Holdings is seeking as much as $792 million on Wednesday, offering 41.7 million shares at $17 to $19 apiece on behalf of existing stockholders. Kors is trimming his personal stake from 12% to 8.6%.
Banks and energy are the weak links
All 10 sectors of the S&P 500 are lower, with energy, financial and materials stocks the weakest groups.
Energy shares slumped on concerns grow that Europe's debt crisis could lead to "a recession that could significantly inhibit oil demand," independent oil trader and analyst Jim Ritterbusch said in a research note.
Oil services giant Halliburton (HAL) was down $1.52 to $32.56. Exxon Mobil (XOM) dropped $1.29 to $80.05. But refiner-and-marketerTesoro (TSO) rose 13 cents to $21.92.
Bank of America (BAC) was the weakest Dow stock, down 27 cents to $5.45. JPMorgan Chase (JPM) dropped $1.14 to $32.04. Citigroup (C) fell $1.55 to $27.22.
Among the day's movers:
Vulcan Materials, which produces construction aggregate materials, was hit with a hostile takeover bid valued at $4.7 billion from Martin Marietta Materials (MLM). Vulcan had broken off talks with Martin Marietta. The offer is for a half-share of Martin Marietta Materials for every Vulcan share. Martin Marietta Materials shares were up $1.24 to $74.61.
Amazon.com (AMZN) shares were off $3.51 to $189.52. The company will roll out a Kindle Fire update within the next two weeks, The New York Times said today, aimed at fixing problems that have concerned many early users. The update will bring improved performance and multitouch navigation, says the Times. Furthermore, users will be able to erase recent activity for improved privacy.
Diamond Foods (DMND) shares were down $9.26 to $31.30. The company won’t file its quarterly financial statements on time because its audit committee isn’t done with an investigation on how the company accounted for payments to walnut growers in light of several class-action lawsuits last month. The audit committee plans to finish its investigation by February 2012. The controversy is holding up its deal to buy Pringle's from Procter & Gamble (PG).
Media and entertainment company Time Warner (TWX) has approached Endemol, the Dutch producer of the "Big Brother" TV shows, with a revised, all-cash offer of $1.3 billion, The New York Post said. The bid comes as Endemol tries to agree on a debt reorganization plan with creditors. Time Warner shares dropped 36 cents to $34.24.
| Short hits from the markets -- New York close | ||||||||||||
| Mon. | Fri. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0400% | 0.010% | 300.00% | -66.67% | ||||||||
| 5-year Treasury note | 0.859% | 0.881% | -9.77% | -57.39% | ||||||||
| 10-year Treasury note | 2.009% | 2.052% | -2.85% | -39.21% | ||||||||
| 30-year Treasury bond | 3.046% | 3.100% | -0.52% | -30.17% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 79.58 | 78.681 | 1.39% | 0.37% | ||||||||
| British pound | 1.5588 | 1.5649 | -0.61% | -0.11% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.641 | £0.639 | 0.61% | 0.11% | ||||||||
| Euro in dollars | $1.32 | $1.34 | -1.85% | -1.40% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.758 | € 0.748 | 1.88% | 1.42% | ||||||||
| U.S. $ in yen | 78.06 | 77.63 | 0.31% | -4.06% | ||||||||
| U.S. $ in Chinese | 6.38 | 6.36 | -0.08% | -3.49% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.975 | $0.000 | -0.63% | -2.84% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.026 | $1.020 | 0.64% | 2.93% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,668.20 | $1,716.80 | -4.69% | 17.36% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.464 | $3.558 | -3.12% | -22.10% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $31.0020 | $32.2530 | -5.49% | 0.21% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $5.9425 | $5.9600 | -3.22% | -25.18% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $5.9400 | $5.94 | -2.30% | -4.58% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.8716 | 0.9043 | -4.12% | -39.81% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $2.2105 | 2.2775 | -6.69% | -8.09% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $97.77 | $99.41 | -2.58% | 6.99% | ||||||||
| (per barrel) | ||||||||||||
Big investors get the market moving up hundreds of points a day until the little guy jumps in and then they sell, reap a profit and start the crap all over again.
The global economy is nothing but a bunch of garbage to screw the little people.
Obama’s staunchest supporters, Progressives for Obama, is “a Who’s Who of 60s radicals” who were forced to testify before the House Committee on Un-American Activities. His core values were formed by a close relationship with communist mentor, Frank Marshall Davis. Socialist, Barack Hussein Obama Sr., also influenced his current world view. When placed in perspective with an “almost criminally negligent” handling of American fiscal policy, one begins wonder if there is an agenda at work.
Our best hope is to remove the Democrats from office, especially Obama!
I think it time for me to take a brief break from this site. I have observed childish prattle mostly from folks that do not take the time to do any research.
- Politicians - all are crooks and ALL including the anointed one are on someone's payroll and don't care about the citizens who elect them.
- Europe - realize that Europe is a consumer of the products and services we make. They are in the toilet which means they can not purchase the products and services we have. It is a MARKET.
- Debt - some debt is good (this is called investment) but extreme debt is bad because there is no return on investment.
Good by for now...Vote for the best choice and DO YOUR HOMEWORK...RESEARCH
Some ideas
1) No more lifetime politicians- Total power = total corruption. Shorter Term limits.
2) Campaign contributions - This should be banned. Unions, Companies, Schools, etc should NOT be given money to a politician so they can return the favor when they are elected. No party should get money from anyone. Not the right gun lobbyist and not the Unions for the left. No one.
The system is skewed towards corruption.
This is EXACTLY how we get screwed.
3) Why can't we VOTE on some of these bills submitted and/or passed?
Why can't we have some say as to what they are doing to our country?
4) what about a watchdog for both parties that works for the people?
Someone to look at these shady deals before they go down?
“This country succeeds when everyone gets a fair shot, when everyone does their fair share and when everyone plays by the same rules,”
The same rules???????, like GM, like Chrysler, like the UAW, like ACORN, like the black panthers, like SEIU, like congressional insider trading, like the banks, like the 2200 "special exceptions" to Otardcare, like 53% paying ALL the federal taxes, like THE ILLEGALS THAT THE AMERICAN PEOPLE ARE FORCED TO PROVIDE FOR, WHO ARE A DIRECT RESULT OF HIGHLY PAID REPRESENTATIVES THAT REFUSE TO ACKNOWLEDGE, AND ENFORCE..............THE LAW........ AND MORE IMPORTANTLY SET THE EXAMPLE THAT THEY THINK THAT THEY ARE ABOVE THE LAW!
OOOH,.......... T H O S E ...........KIND OF "SAME RULES"!
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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