Dow off 22 as stocks struggle for gains

Consumer confidence takes a dive as worries about job prospects grow. But home prices appear stronger. Stocks end little changed as investors wait for Fed Chairman Bernanke's Friday speech. Oil tops $96 as Isaac nears Louisiana.

By Charley Blaine Aug 28, 2012 1:01PM
Charley BlaineUpdated: 7:31 p.m. ET

Stocks were down slightly today as investors looked toward Federal Reserve Chairman Ben Bernanke's Friday speech in Jackson Hole, Wyo., and listened in on the Republican convention in Tampa.

Trading volume was quite light, and while the market was quiet, the economy gave off some strongly divergent signals. Consumer confidence fell to its lowest level in nine months, according to The Conference Board. But home prices are rising, according to the Standard & Poor's/Case-Shiller Home Price Index. That suggests confidence measures don't always translate into consumer action.

Crude oil (-CL) settled up 86 cents to $96.33 a barrel. But it had fallen back from a high of $96.54 as traders bet that Hurricane Isaac would cause only modest damage to the oil-and-gas infrastructure in the Gulf of Mexico and the oil refineries along the Mississippi River. The storm was upgraded to a hurricane early this afternoon with winds of 75 mph. It is expected to make landfall south of New Orleans around 8 p.m. ET.

Apple (AAPL) shares were off slightly today, perhaps because of profit-taking. But its fight with Samsung continues. Apple asked a federal court in San Jose, Calif., to ban sales of eight Samsung smartphones cited in its patent violation lawsuit. Samsung vowed today to fight the move "with all necessary measures."

The Dow Jones industrials ($INDU) finished down 22 points to 13,103, the blue chips' sixth loss in the last seven sessions. The Standard & Poor's 500 Index ($INX) was off 1 point to 1,409. But the Nasdaq Composite Index ($COMPX) gained 4 points to 3,077.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was essentially unchanged at 2,783. Apple, the biggest influence on the index, was off 88 cents to $674.80.

The market has been trading in a very narrow range for the past few weeks. The major averages have seen no daily gains or loss of more than 1% since Aug. 3, when the Dow closed at 13,096. It's up less than 7 points since -- a whopping 0.05%.

On Wednesday, the market faces earnings from H.J. Heinz (HNZ), Brown-Forman (BF.B), retailer Coldwater Creek (CWTR), construction-equipment-maker Joy Global (JOY) and Tivo (TIVO). Heinz officials said today that the quarter's results have been strong as the company expands into emerging markets.

The big economic report is the first revision to the nation's second-quarter gross domestic product. The original estimate, released in July, was 1.5% on an annualized basis. Many economists believe the new estimate will show slightly stronger growth. Also due: the weekly report on oil inventories.

Futures trading suggests a modestly higher open.

The waiting continues
A big reason why the markets are flat -- aside from August vacations -- is that many traders are simply waiting to see what moves the Fed may make, what Europe will do to fix its debt problems and how the U.S. elections turn out. Most polls suggest a tightening race.

The Bernanke speech at the Fed's annual retreat in Jackson Hole, Wyo., is expected to be examined closely for clues on if and when the Fed will engage in a new round of quantitative easing. That's the jargon for purchases of Treasury securities. The Fed has been selling short-term securities and buying long-term notes and bonds to keep rates low and ensure maximum cash in the economy.

Many expected the program to be larger, but there is big disagreement among the governors of the Federal Reserve system and the presidents of the 12 regional banks. Many don't believe the economy needs any help.

The new wrinkle at the Fed's retreat is that Mario Draghi, the president of the European Central Bank, canceled his plans to speak on Saturday. He's too busy, the ECB said. The ECB is expected to announce plans on Sept. 6 for its own bond-buying plan to support Italy, Spain and Greece.

Another reason for his declining to speak may be, as Morgan Stanley's David Darst told CNBC today, that Draghi doesn't want to commit to anything before Germany's highest court rules on whether Germany can legally participate in some bailout plans. That ruling comes on Sept. 12.

While some believe the market is simply waiting to fall apart, the signals for a truly big decline aren't there. In August 2008, before the great crash erupted, the Dow closed up or down more than 100 points 11 times. There have been just three such days in August 2012.

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$96.33

$95.47

9.39%

-2.53%
(per barrel)











Heating oil (-HO)

$3.1285

$3.1195

9.85%

7.35%
(per gallon)











Natural gas (-NG)

$2.6140

$2.6530

-18.54%

-12.55%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9333

$2.9500

5.73%

10.38%
(per gallon)











Brent crude 

$112.58

$112.26

7.30%

4.84%
(per barrel)











Retail gasoline

$3.7560

$3.7500

7.31%

14.65%
(per gallon; AAA)












GM suspends Volt production
General Motors
(GM) shares were off 28 cents to $20.94. The auto giant said today that it plans to temporarily suspend production of the battery-powered Chevrolet Volt due to high inventory levels.

The shutdown at the company's plant at Hamtramck, Mich., will be the second this year for the Volt, which suffered from weaker-than-expected demand. 

In the first half of the year, GM was only able to sell 10,666 Volts in the United States. While this is up nearly 300% compared to last year, the company is still far from meeting its yearly goal. For the full year, the company hopes to sell 45,000 of these cars in the U.S. and 60,000 globally.

The stock is up 3.3% this year but is off nearly 39% since going public in November 2010. The company has had problems with the Volt but much larger problems and losses in its European operations.

AS GM fell, so did Polypore (PPO), maker of critical components that make the lithium ion batteries in the Volt work. Shares were off $2.60 to $31.39.

Consumer confidence sags -- but could be worse
Consumer confidence unexpectedly weakened in August to a 10-month low as Americans turned more pessimistic about the short-term outlook, according to The Conference Board. There is "a high degree of pessimism on job prospects and the overall economic outlook," according to IHS Global Insight economist Chris Christopher. "Adding fuel to the fire is rising pump prices."

But things could be worse, he added. Last summer, as the debt-ceiling debacle unnerved markets around the world, confidence plunged even more.

The big question is if this is a lasting trend. The surveys used to calculate the index are two weeks old, noted Jim O'Sullivan, chief economist at High Frequency Economics. Some daily surveys suggest consumer moods have improved.

Home prices start to show strength
Home prices in 20 U.S. cities climbed in June for the first time since a tax credit boosted sales in 2010, the S&P/Case-Shiller report said. The report was another signal that the housing industry is starting to rebound.

The Case-Shiller index increased 0.5% from June 2011 after falling 0.7% in the 12 months that ended in May. The last 12-month increase took place in September 2010. Nationally, prices jumped last quarter by the most in more than six years.

The lowest mortgage rates on record and a decline in sales of distressed properties may help the market contribute to the economic expansion that is now in its fourth year.

Homebuilding stocks were mixed on the day. PulteGroup (PHM) was up 4 cents to $13.28; D.R. Horton (DHI) fell 12 cents to $18.62.

Leaders and laggards
Lexmark International
(LXK), up $2.61 to $21.62 after announcing it will get out of the inkjet printer business and cut 1,700 jobs in a bid to eliminate costs and support profits by concentrating in higher-margin markets. The decision also means shutting a factory in the Philippines. The stock was the top S&P 500 performer.

Molycorp (MCP), up $1.23 to $10.75. Late Monday, the company said it had begun operations to produce rare-earth elements from ore mined in California.

Discovery Laboratories (DSCO), up 41 cents to $3.22. Stiffel Nicolas started coverage on the company with a buy rating.

Movado Group (MOV), up $5.25 to $35.26. The watch maker reported better-than-expected results for the fiscal second quarter and lifted its forecast for the full year.

Brown Shoe Co. (BWS), down $1.13 to $14.27. The footwear retailer reported a narrower second-quarter loss.

KLA-Tencor (KLAC), down $1.32 to $51.66. Deutsche Bank cut its rating on the semiconductor-equipment maker to "sell" from "hold."

Only 10 of the 30 Dow stocks were higher, led by Intel (INTC), Chevron (CVX) and Exxon Mobil (XOM). Hewlett-Packard (HPQ) and Bank of America (BAC) were the laggards.

A total of 201 S&P 500 stocks were higher, led by Lexmark and Tyson Foods (TSN). Salesforce.com (CRM) and Hudson City Bancorp (HCBK) were the laggards.

Forty-two Nasdaq-100 stocks were up led by Baidu (BIDU) and Autodesk (ADSK). KLA-Tencor and Dell (DELL) were the laggards.
 
Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.100%

0.00%

900.00%
5-year Treasury note 

0.675%

0.683%

12.69%

-18.67%
10-year Treasury note

1.630%

1.649%

9.25%

-12.88%
30-year Treasury bond

2.743%

2.757%

6.44%

-5.05%
Currencies











U.S. Dollar Index

81.381

81.691

-1.61%

1.07%
British pound

1.5830

1.5798

0.95%

1.88%
(in U.S. $)

 








U.S. $ in pounds

£0.632

£0.633

-0.94%

-1.85%
Euro in dollars

$1.26

$1.25

2.17%

-3.00%
(in U.S. $)

 








U.S. $ in euros

€ 0.796

€ 0.800

-2.13%

3.10%
U.S. $ in yen 

78.68

78.76

0.71%

2.05%
U.S. $ in Chinese

6.37

6.36

0.26%

0.77%
yuan











Canada dollar

$1.013

$1.010

1.57%

3.23%
(in U.S. $)

 








U.S. dollar 

$0.988

$0.990

-1.47%

-3.13%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,669.70

$1,675.60

3.68%

6.57%
(per troy ounce)

 








Copper (-HG)

$3.4625

$3.477

1.32%

0.77%
(per pound)

 








Silver (-SI)

$30.875

$31.048

10.61%

10.60%
(per troy ounce)

 








Wheat (-ZW)

$8.7550

$8.8125

-1.44%

34.12%
(per bushel)

 








Corn (-ZC)

$7.9550

$8.0075

-1.21%

23.05%
(per bushel)

 








Cotton 

$0.7562

0.7614

6.00%

-17.52%
(per pound)

 








Coffee

$1.6795

1.6735

-3.70%

-26.87%
(per pound)

 








Crude oil (-CL)

$96.33

$95.47

9.39%

-2.53%
(per barrel)










 

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