Tech weakness, Europe fears keep stocks in check

The Dow and S&P 500 produce tiny gains, but stocks of multi-nationals slide on worries about Europe. NetApp is a big loser, but Apple, Amazon.com and Google also drop. Hewlett-Packard is an exception. Jobless claims drop. Gold and oil move higher.

By Charley Blaine May 24, 2012 1:04PM
Charley BlaineUpdated: 6:31 p.m. ET.

After Wednesday's big rebound, one might have hoped for a big day Thursday.

Didn't happen, although the Dow Jones Industrials ($INDU) and the Standard & Poor's 500 Index ($INX) scratched out small gains.

There was weakness in some key technology stocks, especially storage company NetApp (NTAP) and Apple (AAPL). Hewlett-Packard's (HPQ) results and announcement of 27,000 job cuts over the next 18 months did cheer Wall Street. So did Facebook (FB), whose shares ended up $1.03 to $33.03, its second straight gain.

At the same time, Europe -- and the potential of a messy Greek departure from the eurozone -- was a check on markets. The dollar rose against major currencies and trimmed rallies in crude oil (-CL) and gold (-GC). A Wednesday meeting exposed a growing rift among eurozone nations on how to encourage growth in Greece, Spain and Portugal in particular. There probably won't be any big decisions before Greece's June 17 election and a June 30 meeting. At the same time, a series of economic reports suggested the European economy is contracting. The one exception: Germany, buoyed by export growth.

The European uncertainty, political and economic, depressed five stocks with big exposure to international markets: JPMorgan Chase (JPM), Boeing (BA), IBM (IBM), Caterpillar (CAT) and United Technologies (UTX). The four subtracted 16 points from the Dow by themselves.

Despite the losses suffered by those five stocks, the Dow closed up 34 points to 12,530. The S&P 500 was up 2 points to 1,321. But the Nasdaq Composite Index ($COMPX) shed 11 points to 2,839. On Wednesday, the market had come back strongly from a steep sell-off that saw the Dow down as many as 191 but end with just a 7-point loss. 

Article continues below.

The Nasdaq-100 Index ($NDX) was off 16 points to 2,531. Apple (AAPL), down $5.24 to $565.32, is responsible for 4.3 points of the loss. Oracle (ORCL), Google (GOOG), Qualcomm (QCOM), Microsoft (MSFT) and Amazon.com (AMZN) contributed an additional seven points to the index's decline. (Microsoft publishes MSN Money.)

May has been a nasty month
The S&P 500 actually enjoyed its fourth gain in a row; the Nasdaq was up for a second straight day. The Dow has not risen two days this month.

The Dow is off 5.2% for May, with the S&P 500 down 5.5% and the Nasdaq off 6.8%. Potentially, the averages are facing their worst monthly decline since September and the worst May performance since May 2010.

Still, the Dow is up 2.6% for the year, with the S&P 500 up 5% and the Nasdaq up 9%.

NetApp shares slump
The biggest loser among Nasdaq-100 stocks today was NetApp, down $4.05 to $28.81. The data-storage company offered a disappointing forecast that sparked at least a number of analyst downgrades. Rival EMC (EMC) is off $1.23 to $24.23.

Excluding one-time items, NetApp expects to earn 34 cents to 39 cents a share on revenue of $1.4 billion to $1.5 billion. The consensus Street estimate was for earnings of 59 cents on $1.61 billion in revenue for the quarter. 


Research In Motion (RIMM) was at $10.71, down 38 cents, after dropping to as low as $10.63. The move was in reaction to the resignation of Patrick Spence as head of global sales. The company has been struggling to sell older-generation products and is hoping for success with a new smartphone later this year.


Another issue for the market today has been upscale jeweler Tiffany (TIF), down $4.98 to $56.82. Revenue for the fiscal-first quarter rose 8% to $819 million. Earnings were up 1 cent to 64 cents a share. Revenue was boosted mostly by sales in Asia and Japan. In the Americas, revenue was up 3%. Its flagship New York store saw sales decline 4%.


Shares of oil-and-gas producer Chesapeake (CHK) were up 49 cents to $15.58. Just about all of the gain came in the last 30 minutes of trading after a Bloomberg News report that activist shareholder Carl Icahn has purchased at least a 4% stake in the company.


Icahn has played around in Chesapeake before. In December 2010, he held a 5.8% stake. In his most recent filing with the Securities and Exchange Commission, Icahn's holdings showed no Chesapeake holdings.


Comcast to buy out Microsoft stake at MSNBC.com?

Maybe. Adweek reported today that Comcast wants to buy out Microsoft's shares of the MSNBC.com site. The story suggested negotiations are serious.


Comcast's NBC Universal subsidiary bought out Microsoft's share of the MSNBC cable network, starting in 2005 and finishing in 2007. The two had started the network and its website in 1996. Microsoft has always kept a 50% interest in the Web site.


A sticking point is whether MSNBC would continue to maintain a presence on Microsoft's MSN site.


Crude and gold move higher

Crude oil (-CL) settled up 76 cents to $90.66. Brent crude was up 91 cents to $106.47. The national price of gasoline dropped to $3.676 a gallon, according to AAA's Daily Fuel Gauge Report.


Gold (-GC) settled up $9.10 to $1,5570 an ounce. Silver (-SI) added 63.8 cents to $28.157 an ounce. Copper (-HG) settled up 3.25 cents to $3.4285 a pound.


Interest rates were higher, with the 10-year Treasury yield rising to 1.769% from 1.721% on Wednesday. The dollar was higher against the euro and other major currencies. 


The dollar, in fact, is up 5.7% against the euro in May alone and up 3.4% for the year. It up 1% against the British pound.


No charges in Lehman failure?

The Securities and Exchange Commission investigators have concluded their probe of possible financial fraud at Lehman Brothers and probably won't recommend any enforcement action against the firm or its former executives, Bloomberg News reported.

The report cited a draft of an internal memo. The agency has been grappling with the case for more than three years amid questions from lawmakers and investors as to whether Lehman misrepresented its financial health before filing the biggest bankruptcy in U.S. history in September 2008.

Senior officials have been reluctant to formally close the matter even though investigators found a lack of evidence of wrongdoing, according to people with direct knowledge of the matter.


Hewlett-Packard leads the Dow; Southwest Air tops the Dow

Twenty-one of the 30 Dow stocks were higher, led by Hewlett-Packard, up 69 cents to $21.77, and Home Depot (HD), up 97 cents to $49.71.


Meanwhile, 289 S&P 500 stocks were higher, led by Southwest Airlines (LUV), Lowe's Companies (LOW) and Family Dollar Stores (FDO). NetApp, F5 Networks and Tiffany were the laggards.


Monster Beverage (MNST) and Alexion Pharmaceuticals (ALXN) were the top Nasdaq-100 performers; NetApp and F5 Networks were the laggards. Only 34 Nasdaq-100 stocks were higher.


Energy prices -- New York close



Thurs.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$90.66

$89.90

-13.55%

-8.27%
(per barrel)











Heating oil (-HO)

$2.8257

$2.8155

-11.26%

-3.04%
(per gallon)











Natural gas (-NG)

$2.6470

$2.7370

15.84%

-11.44%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8193

$2.8015

-9.77%

6.09%
(per gallon)











Brent crude 

$106.55

$105.56

-10.87%

-0.77%
(per barrel)











Retail gasoline

$3.6760

$3.6780

-3.67%

12.21%
(per gallon; AAA)












Jobless claims slip; durable good orders disappoint

The economic reports didn't excite. Jobless claims were down 2,000 to 370,000 in the latest week. That met estimates. The four-week moving average also was 370,000. The good news is that claims have been under 400,000 for 30 weeks. The bad news is that the claims haven't dropped little since the first of the year.


A little perspective. Weekly claims since 1990 have averaged 374,000. 


Meanwhile, durable goods orders were up 0.2% in April, compared with expectations for a 0.5% gain. If you take out transportation orders (basically airliners), orders were off 0.6%. Defense and communications orders were down the most.


Short hits from the markets -- New York close



Thurs.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%     0.080%

0.00%     800.00%
5-year Treasury note 

0.773%     0.728%

-4.69%     -6.87%
10-year Treasury note

1.759%     1.721%

-8.15%     -5.99%
30-year Treasury bond

2.847%     2.794%

-8.43%     -1.45%
Currencies











U.S. Dollar Index

82.487     82.235     4.62%     2.44%
British pound

1.5659     1.5699     -3.59%     0.78%
(in U.S. $)

                   
U.S. $ in pounds

£0.639     £0.637     3.72%     -0.78%
Euro in dollars

$1.25     $1.26     -5.39%     -3.27%
(in U.S. $)

                   
U.S. $ in euros

€ 0.798     € 0.794     5.70%     3.38%
U.S. $ in yen 

79.81     79.46     -0.24%      3.51%
U.S. $ in Chinese

6.36     6.33     0.90%     0.50%
yuan

                     
Canada dollar

$0.973     $0.976     -3.96%     -0.80%
(in U.S. $)

                   
U.S. dollar 

$1.028     $1.024     4.13%     0.81%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,557.50

$1,548.40

-6.41%

-0.59%
(per troy ounce)











Copper (-HG)

$3.429

$3.396

-10.47%

-0.22%
(per pound)











Silver (-SI)

$28.1570

$27.5190

-9.22%

0.87%
(per troy ounce)











Wheat (-ZW)

$6.6300

$6.6550

1.30%

1.57%
(per bushel)











Corn (-ZC)

$5.7850

$6.035

-8.79%

-10.52%
(per bushel)











Cotton 

$0.7249

0.7041

-18.91%

-20.93%
(per pound)











Coffee

$1.6920

1.6915

-5.76%

-26.32%
(per pound)











Crude oil (-CL)

$90.66

$89.90

-13.55%

-8.27%
(per barrel)










 
81Comments
May 24, 2012 2:27PM
avatar
Wouldn't it be nice if these Politicians would stop blaming the opposite Party & just get the job done & try to make things better.  The finger pointing & lies are like asking a bunch of school yard kids who threw the rock & broke  the window. ..the typical response is "not me" or "point the finger as the weakest link"....GROW UP WASHINGTON and stop being a bunch of worthless cry babies!!!
May 24, 2012 1:39PM
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could we stand 4 more years of listening to obame talking about Bush     It will have been 8 years and obame will stilll be blaming Bush      Dang he is worthless
May 24, 2012 3:03PM
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I could stand 4 more years of Obama talking about Bush.
Yes, please, but as the host of the view.
May 24, 2012 3:15PM
avatar
Hey but look on the bright side, the economy is getting better and improving, so are the jobs, oh wait, HP is laying off 27,000 people and how much do they charge for there PC'S, Printers, Etc.? Job fair is coming to town, need 4 year degree just to enter the fair, what a joke!!!!!!!!!!!!!!
May 24, 2012 3:43PM
avatar

With all the negative news here and abroad the market should be down to around 10,000.  If not for the "prop up" bail out money it would be.  Such a fricking joke.

May 24, 2012 1:52PM
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 So-- was Europe Bush, Barney or Obama's fault? I'd say it was the people who made lousy loans to countries with a lousy business plan just to make a quick buck by quickly flipping the loan before the caca hit the whirling blades. You can't GET a loan unless someone is willing to give it to you
May 24, 2012 2:24PM
avatar

A little perspective. Weekly claims since 1990 have averaged 374,000. 

 

A little perspective: 1990 population as of 4/1/1990      248,709,875

                                   2012 population as of 5/24/2012   314,000,000

May 24, 2012 3:50PM
avatar
I can't wait until the election because only then will this falsely propped up market be corrected.  Just wait and see but I am confident it will drop before it goes up.  A downward correction is long overdue.
May 24, 2012 3:34PM
avatar
Obama's on his knees facing the bankers on wall street to get some more campaign funds.
May 24, 2012 3:42PM
avatar
i see a article there are concerned  baby boomers are not saving for retirement  could be they put all there saving in  SS  AND THE GOVERNMENT   spent it  al. saving .05% if your  lucky  house is worth  noting  taxes on  house  are  higher then the  house  payment   bernake  got the dollar down to where its  worth  nothing banks won;t lend  any  money  because they can't  charge  10 %  on money they  borrow  and pay  no interest on. boomers are putting there money  away  but the stock market  and  banks will never see it . the goverment  has us in debt up to are  neck  and do they really  think  boomers are going to put  money  where they can get there hands  on it . there are a lot ways to invest  that goverment  and  banks  and stock  market  can't get there  hands on it
May 24, 2012 1:53PM
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1966 to 1982 was just like this. Stock market was at 1,000 in the late 1960's and at 850 in 1982!!!!!
May 24, 2012 2:35PM
avatar
Past defaults: 
Spain (1557, 1575, 1596, 1607, 1627, 1647, 1809, 1820, 1831, 1834, 1851, 1867, 1872, 1882, 1936-1939)
Greece (1826, 1843, 1860, 1893, 1932)
 What's one more
May 24, 2012 2:18PM
avatar
Stock Market now completely schizophrenic!
May 24, 2012 5:08PM
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Well, lets see.  Oil is down almost 14% for the month and retail gas is down almost 4%  for the month.  You think oil companies are taking in a little extra profit?  How does everybody feel about that?
May 24, 2012 3:27PM
avatar
No, I'm not a 1%er till next year. The IRS makes sure I stay low on funds.

Next year I get to go negative.

Marc if I was in the 1%, I wouldn't be paying 35% tax - I would be able to hide it like GE...
May 24, 2012 2:17PM
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I blame Greece for everything-including global warming and the rise of the lycans.
May 24, 2012 1:57PM
avatar
 Why is it Greece's fault if they did not live up to their obligations as expected by German banks.  A hard nosed banker SHOULD have known better than to give out a loan to some dip with a Pollyanna Payback Plan
 
 If I were Greece I'd take the Germans for one last bailout payment and THEN get the hell out! Call it sour grapes
May 24, 2012 5:18PM
avatar
hp layed off how many people to save stockholders? and this is a good thing? greed, If americans would grow a backbone we would buy from companies that do the right thing for our country not stockholders or china..this is bull! look at labels calculate how much that $50 dollar all in one printer is gonna cost you in ink a year! wake up america,you are tossing your money in the trash! one more greedy **** company that has increased there bottom line by screwing us! they are selling america to china and getting rich at a fast rate doing it!
May 24, 2012 3:20PM
avatar
Will the real Barack Obama please stand up.............

"Look! You'll have to wait! I'm still on my knees facing East!"
May 24, 2012 5:34PM
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JohnB, Ray Irani , CEO of Occidental Petroleum makes $35,000 dollars per hour or about $76 million per year, 1,777 times what a derrick hand makes. How many gallons and at what profit margin does Occidental have to make just to pay Ray?
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