Despite loss, Dow ends April with a tiny gain
Stocks weaken after Spain falls back into recession. Barnes & Noble soars as Microsoft invests $300 million in its Nook business. Sunoco will merge with Energy Transfer Partners. Chicago purchasing managers see growth slowing.
Stocks ended very modestly lower today but finished April with small losses at worst.
The Dow Jones industrials ($INDU) actually finished up about 2 points for the month, while the Standard & Poor's 500 Index ($INX) and the Nasdaq Composite Index ($COMPX) were off 0.8% and 1.5% for the month, respectively.
Blame Spain for the market's 's decline. The European nation has slipped back into recession as it struggles to gain control of its debt and economy. In addition, Standard & Poor's downgraded 11 Spanish banks today. The worries over Europe have pushed the dollar higher against the euro and other major currencies. Treasury yields were lower. So were gold (-GC) and crude oil (-CL) in New York.
At the same time, a Midwestern gauge of the economy fell to its lowest levels in 29 months as the U.S. economic recovery appears to be slowing down. A national report on manufacturing, due Tuesday, and Friday's jobs report will be critical measures of the recovery's strength.
Barnes & Noble (BKS) shares jumped $7.07 to $20.75 after Microsoft (MSFT) agreed to invest $300 million in Barnes & Noble's Nook business. The move gives the Nook more backing in its competitive battle with Apple's (AAPL) iPad and Amazon.com's (AMZN) product lines. But skepticism remains about the Nook's progress, particularly with the Nook tablet. Barnes & Noble had risen to as high as $26 right after the open. Microsoft, the publisher of MSN Money, closed up 3 cents to $32.02.
The Dow closed off 15 points to 13,214. The S&P 500 was off 5 points to 1,398, and the Nasdaq had dropped 23 points to 3,046. The Nasdaq-100 Index ($NDX), heavily influenced by Apple, was off 18 points to 2,724.
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Apple was down $19.02 to $583.98 after The New York Times reported on all the legal loopholes the tech giant uses to minimize its corporate income tax bill. The company had an overall tax rate of less than 10% in 2011, vs. about a 24% average for non-tech companies, the Times reported.
Apple shares have fallen more than $26 from their $610-a-share close on Wednesday after reporting blowout earnings after Tuesday's close. They finished April down 2.6% and down 9.4% from their all-time intraday high of $644, reached on April 10.
Ahead on Tuesday
Tuesday's market faces earnings from oil-giant BP (BP), natural-gas producer Chesapeake Energy (CHK), pharmaceutical giant and Dow component Pfizer (PFE) and broadcaster CBS (CBS).
The economic reports are important, starting with the Institute for Supply Management's April report on manufacturing. Next up are auto sales for April. And last is the Commerce Department's report on construction spending in April.
Futures trading suggests a flat open for U.S. stocks.
Crude oil, gold recover most of early losses
Light sweet crude oil in New York settled up 6 cents to $104.87 a barrel. It had been as low as $103.88. Brent crude, the benchmark North Sea crude, was off 29 cents to $119.54. It had been as low as $118.73.
For the month, light sweet crude was up 1.8% and is up 6.1% for the year. Brent is off 2.7% but is still ahead 11.3% on the year. Natural gas (-NG) was up 9.9 cents at $2.285 per million British thermal units after bottoming at a 10-year low of $1.1991 on April 19.
The national average price of gasoline at the pump was $3.816 a gallon, down from $3.826 on Friday and down 2.8% for the month, the first monthly decline in 2012. It is still up 16.5% on the year.
Gold slipped 60 cents to settle at $1,664.20 an ounce. For the month, gold was down 0.5% and is up 6.2% for the year. Silver (-SI) settled off 36.5 cents to $31.016 an ounce. Silver finished down 4.5% for April but is up 11% for the year. Copper (-HG) was up a half penny to $3.8295 a pound. It was up 0.1% for the month and is up 11.5% for the year.
Interest rates were lower, with the 10-year Treasury yield falling to 1.915% from 1.933% on Monday. So far the yield is off 13.6% for the month and is up 2.4% for the year. The dollar was higher against major currencies.
|Energy prices -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|Crude oil (-CL)||$104.87||$104.93||1.80%||6.11%|
|Heating oil (-HO)||$3.1842||$3.1835||0.44%||9.26%|
|Natural gas (-NG)||$2.2850||$2.1860||7.48%||-23.55%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$3.1246||$3.1445||-5.55%||17.58%|
|(per gallon; AAA)|
Despite Dow's gain, April was not a great month
Down for most of April, the Dow on Friday had pushed very slightly into the black for the month. The blue-chip index was able to stay in the black today thanks to late buying that trimmed the day's losses. The tiny gain -- just 0.01% -- means the index has risen for seven straight months. Only 14 of the 30 Dow stocks finished with gains for the month.
The S&P 500's loss for the month was its first after four gains in a row and five out of the last six months.
The Nasdaq's decline was its first after three straight monthly gains. The Nasdaq-100 finished off 1.2%, largely because Apple is down about 2.3%.
For the year, the Dow is up 8.2%, with the S&P 500 sporting a gain of 11.2%. The Nasdaq is up 16.9% for the year, while the Nasdaq-100 is up 19.6%.
Much of the gains for the Nasdaq and Nasdaq-100, again, are due to Apple, which is still up 44.7% on the year.
Groupon's board changes
After the close, Starbucks (SBUX) CEO Howard Schultz stepped down as a director of Internet deal site Groupon (GRPN). A second director, Kevin Efrusy of Accel Partners, won't be standing for election at the company's annual meeting, according to The Wall Street Journal's All Things Digital blog.
Groupon has suffered a recent series of missteps around its financial reporting that have hurt its reputation and its stock. Shares are off 41.5% since March 30 and are off 48% this year. Today, shares slid $1.27 to $10.71.
Groupon will replace Schultz with Daniel Henry, the chief financial officer of American Express (AXP). Robert Bass, vice chairman of Deloitte LLP, will stand for election at the annual meeting.
Chicago purchasing managers see growth slowing
New data showed that business activity is declining in the U.S. Midwest, and Americans are becoming more cautious about spending.
The Institute for Supply Management of Chicago also said its purchasing managers index fell to 56.2 in April from 62.2 in March, a bigger drop than expected.
Economists had expected the index to fall only to 61, according to a Thomson Reuters survey. The barometer has now fallen for a second straight month, with production at its lowest level since Sept. 2009.
But a reading above 50 still means that the economy is growing.
Production was at its lowest levels since September 2009, the report said, with prices paid lower than in March. Supplier deliveries were at their lowest level since September 2011, and the lead times for getting raw materials were the lowest since June 2010.
Employment, however, is still growing.
Separately, the Commerce Department said personal spending rose 0.3% in March, less than the 0.4% economists polled by Thomson Reuters had expected. Incomes climbed 0.4%, exceeding the 0.3% forecast. In February, incomes rose by an upwardly revised 0.3% and spending increased by an upwardly revised 0.9%.
Spain falls back into recessionSpain's gross domestic product fell 0.3% during the first quarter after dropping by the same amount during the fourth quarter, putting the country in recession. The nation, like others in the eurozone, has been struggling to cut its budget deficit.
A total of 12 European nations are now in recession, including seven in the eurozone -- countries that use the euro as their currency.
Others include Italy, Portugal, Ireland, Greece, Belgium, Slovenia and Holland.
Spain's 0.4% economic decline in the first quarter wasn't as bad as expected. But Louise Cooper, a market analyst at BGC Partners in London, told The Guardian newspaper don't get optimistic about its prospects. "I believe that Spain is close to imploding under austerity and a property bust," she said. "It is following Ireland but without the benefits of a reformed and pro business economy."
Last week, Standard & Poor's reduced Spain's credit rating, citing its debt problems.
S&P today cut its credit ratings for 11 Spanish banks, including Banco Santander (STD) and Banco Bilbao VizcayaArgentaria (BBVA), citing “potentially negative implications” from the nation’s downgrade last week.
S&P said it may also downgrade six other lenders. Santander, Spain’s biggest bank, had its long-term debt rating cut by two levels to A- from A+, and BBVA , the second-largest, had its rating cut to BBB+ from A, the ratings company said. The outlook for those ratings is negative. Banco Santander shares fell 14 cents to $6.33 in New York. BBVA shares fell 12 cents to $6.75.
European stocks were generally lower after the Spanish downgrade and ahead of France's presidential runoff between incumbent Nicolas Sarkozy and Socialist candidate Francois Hollande. Spain's Ibex 35 Index ($ES:IB) fell 135 points to 7,011, not far from its March 9, 2009, bottom of 6,817.
Leaders and laggards
NYSE Euronext (NYX), down $1.32 to $25.75. The parent of the New York Stock Exchange said first-quarter adjusted earnings declined 32%. The company said trading at its exchanges slowed, particularly in its derivatives trading unit, and incurred costs associated with its failed merger with Germany's Deutsche Boerse. Adjusted profit in the quarter was 47 cents a share, falling short of estimates of 48 cents.
Drugmaker Warner Chilcott (WCRX), up $3.02 to $21.81, is considering selling itself after it received interest from strategic and private-equity buyers, Bloomberg News reported. Takeover speculation has surrounded the stock for the last week.
Gen-Probe (GPRO), up $12.84 to $81.55. The developer of testing for sexually transmitted diseases agreed to be bought by Hologic (HOLX) for about $3.7 billion in cash. Hologic slipped $2.11 to $19.12.
Sunoco (SUN), up $8.38 to $49.29, tops among S&P 500 stocks. The Philadelphia-based refinery agreed to be acquired for $5.3 billion in shares and cash by Energy Transfer Partners (ETP), which is adding oil transportation and distribution assets. ETP was up $1.71 to $49.63.
VeriFone Systems (PAY), down $6.80 to $47.64. The largest maker of credit-card terminals was cut to "sell" from "hold" by Deutsche Bank.
Winners after the close include Kona Grill (KONA), up 14.4% to $7.70 after hours on a big earnings beat; Anadarko Petroleum (APC), up 1% to $73.90 because of an earnings beat; and chip-equipment maker Veeco Instruments (VECO), up 14.3% to $34.50.
|Short hits from the markets -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0900%||0.090%||28.57%||800.00%|
|5-year Treasury note||0.811%||0.822%||-22.24%||-2.29%|
|10-year Treasury note||1.915%||1.933%||-13.58%||2.35%|
|30-year Treasury bond||3.109%||3.115%||-7.06%||7.62%|
|U.S. Dollar Index||78.848||78.757||-0.37%||-2.08%|
|(in U.S. $)|
|U.S. $ in pounds||£0.616||£0.614||-1.39%||-4.30%|
|Euro in dollars||$1.32||$1.32||-0.77%||2.20%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.755||€ 0.755||0.77%||-2.15%|
|U.S. $ in yen||80.00||80.32||-3.60%||3.76%|
|U.S. $ in Chinese||6.30||6.31||-0.30%||-0.39%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$104.87||$104.93||1.80%||6.11%|
Why is the market so worried over foreign deficits, when ours over shadows them like a total eclipse. ? Is it because the Fed can just print more money any time it wants? Hey,
great country America, especially if you're in the 1%
So, now you have a negative feedback loop, and a guarantied crash and bankruptcy.
Todays business is all about a business just making as much money as they can for the few at the top. They all have these waste and lean programs within the business to eliminate costs, which effects jobs, no jobs means no hiring= no buying of good by the out of work. Where does this cycle of end, are we going to continue to do as much as we can without labor?
We have all had a hand in our problems!!!!!!! Ttrusting our elected officals to do the right thing!!!!!!! Look what we got in return- everything going up but our income !!!!! All congress wants to do is cut programs an raise taxes. " Put a cieling on TERM limits an what they get , them run thier office as it was supposed to be" For the people by the people" not to line the pockets of themselves an thier contributors. If this isn't done get rid of them.
Both parties have an equal hand in our problems not just one. WE AS VOTERS NEED TO TAKE BACK THE CONTROL OF OUR DESTINY not just the top percenters as it is now!!!!!!!!
Crude oil in New York was off 3 cents to $104.90 a barrel. It had been as low as $103.88. Brent crude, the benchmark North Sea crude, was off 26 cents to $119.57. It had been as low as $118.73.old rose slipped 60 cents to settle at $1,664.20. For the month, gold was down 0.5% and is up 6.2% for the year.
I personally think QE money found a home in commodities. I don't mind people dumping money in gold and silver... very few things I buy on a regular basis comes from those two things. But as for food and especially oil which powers food, is irritating. People employed stinks and economy is sluggish yet oil stays high. That makes no sense other than to say the QE found a home in pumping the price up via margins. No where else to put money to make a fat return besides commodities. So that's where all the money goes. And when you only have to put 5% down and 95% of it is credit to leverage your return, you get yet another bubble in commodities. Only problem, this excess cost in commodities hurts everyone else immediately more so than just bubbling homes or the other tech bubble.
I hope things turn around.
HAPPY VIEW: Pure free market people would say production on all the commodities would increase given their increase price. Let's see this happen, I hope. And this may increase jobs in areas of mining, refining, harvesting, etc. Production should shoot up in the commodity sector, not decrease.
Pessimistic view: If prices climb too high, the demand will taper off way before more quantity produced occurs so supply curve wouldn't shift out-- you need both demand and supply curves to shift out to actually grow an economy. If demand deteriorates because of excess prices, companies may not invest in trying to produce more knowing the forecast is less demand (lower prices for their goods) outcome no supply increase to stable prices and no increase in jobs to stable/grow demand.
Only the wealthy or speculators or idiots play the stocks anymore. The blue collars are all ruined and gone.
Occupy Wall Street
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[BRIEFING.COM] The major averages spent the entire session in a steady downtrend, but despite persistent selling pressure, today's losses were limited in scope. The Dow, S&P 500, and Nasdaq shed between 0.2% and 0.3% while the Russell 2000 lagged, falling 0.9%.
The underperformance of the Russell 2000 was likely owed in part to tax-loss selling, which tends to pick up this time of year. Small-caps often feel that pinch in a stronger fashion than large-cap issues since individual ... More
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