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)










 

155Comments
Aug 28, 2012 3:51PM
avatar
Headline should read Fed Policy Keeps Stocks Propped Up Until Election!
Aug 28, 2012 3:51PM
avatar
If traders don't show confidence and move the market ... they will be out of a job ... he market is tiring. dying!!!
Aug 28, 2012 3:48PM
avatar

This just in, Mega Bank Wells Fargone fires Jean Valjean for past offense. Mr. Valjean, who admitted to having stolen a loaf of bread to feed his starving family some 50 years ago, said in his defense that he had not committed any crimes since that lapse of judgement. A spokesman for Wells Fargone said that despite the enormous time lapse it just wouldn't be right to have a former socialist bread stealer on the payroll. Adding, they must avoid even the appearance of impropriety at all costs.

 

In other news, Mitt "Trust Me" Romney refused to release his Federal Tax Returns, adding that he too must avoid the appearance of impropriety at all costs.

Aug 28, 2012 3:42PM
avatar
Wall Street banksters and brokerages patiently wait in line at Bernanke's Federal Welfare Department for their next "free" fix. 
Aug 28, 2012 3:30PM
avatar
Take a look around and it is not that difficult to see.  Certainly, there is polarization as seen right here.  Another shooting .... and, crime is down.  The comments I get, other than a few, are hardly deserving of a response.  It is what is is, I gather.  It is impossible to change liberal mindset. It will not happen.  Why the name-calling here is beyond me.  It just makes the board less valid in voicing opinions.  Many very intelligent people, here ... there are others' that need this venue for whatever reason.  This should stop.  Just my opinion. 
Aug 28, 2012 3:21PM
avatar
wow the abject absurdity of the lame-stream commie obamazombie media, to equate the Republican Convention and hurricane Issac together is the height of desperation of the "inthetankfor" media, how pathetic, split screens of people in dispair and the Reupblicans having "fun" a "grand ol time" at the convention, now are we going to see the "grand ol fun" that pig black muslim false messiah at his fleecing, I mean fundraising efforts?? cavorting with the pathetic hollywood lackies that kiss his ****, too stupid to realize that the only reason their rich is because of the private equity in this free market capitalist society?? oh right, certain "rich" people can get away with being rich, God forbid it's anybody else!! is that all you've got you liberal vermin? is this what it's come down too? reveling in the fact that a hurricane is bearing down on New Orleans and you just can't wait for the destruction to come, and the headlines - Republicans Covorting while New Orlean citizens homeless- , heh nice try! don' t you ****s in the lamestream media realize that your done, over, kaput? no matter what you say, your black muslim messiah is finished in Nov, the public is not living the utopia promised by that black bastard, so who the hell do you think is going to get rid of this nightmare the public is living? THE PUBLIC! that's who!
Aug 28, 2012 2:47PM
avatar
Obumer's out fundraising while Isaac takes aim at New Orleans.  
avatar

China is in a sweet spot right now. It's central banks can print monies that it can use to create jobs for the rural Chinese who can then have enough money to buy the goods targeted for the US and Europe right now.

 

Problem solved -- why does China have to slow down yuan spends even better than dollars in China.

 

QUOTE

China -- and this should come as no surprise, given the history of other centrally controlled economies -- is really, really bad at shrinking supply when demand falls. The current supply-side disaster is so bad, in fact, that the Chinese government has been obviously falsifying economic data to hide the extent of the problem. (And the extent of the problem is one reason I think that the People's Bank of China will move relatively soon to cut interest rates and step up its efforts to stimulate the Chinese economy.)

END QUOTE

Aug 28, 2012 2:40PM
avatar
Another bailout with worthless dollars will be the death knell of the US economy; China and other large holders/investors in the dollar and treasuries have about had it with the Fed printing wholesale amounts of money to fund the US debt binge, rather than taking our lumps, understanding that the economy is contracting, and that growth will not return at any where near the levels we've known. Ever. If we do  not manage contraction, contraction will manage us
Aug 28, 2012 2:22PM
avatar

Barack Obama in 2012!

 

Chris Van Hollen in 2016 & 2020!

 

God bless and protect the United Christian Socialist States of America!

Aug 28, 2012 2:19PM
avatar

Thank God we caught 4 more Neo-Nazi Republican/Libertarian/Teabager/ military anarchist wackos trying to blow up the U.S. and assassinate Mr. Obama. Fry these homegrown treasonous terrorists and any others that follow in their footsteps.

 

This is the kind of dangerous, demented and delusional weak minded fools FOX news and the Republican extremists prays upon and indoctrinates. BAN FOX NEWS! Exterminate all these violent radical Republican/Libertarian/Teabagger Neo-Nazi extremists ASAP!

 

God bless and protect the United Christian Socialist States of America!

Aug 28, 2012 1:58PM
avatar

Wall Street seems to be waiting for another bailout from Ben. Unfortunately, low consumer confidence; gas price; a terrible housing market; and above all, a socialist president are making just too much headwind for this boat to move forward.

The only thing that the Fed has been doing for the past 5 years is devaluing the dollar. The latest estimates are that inflation will be well over 5%, and possibly as much as 6% over the next year. All of this tinkering with the dollar is finally catching up with us in the form of inflation that is going to run wild.

With real unemployment and underemployment at 17+% and high inflation, we are getting ourselves deeper and deepar in a hole.

Great job Ben-YOU MORON!!

avatar

Hmmm anyway to bet on the levies failing again in New Orleans. Last time it was a Cat 2 hurricane that missed to the right this time it's a Cat 1 pretty much just off to the left the most damaging to all things right of it.

 

Hmmm 6-12 foot storm surge --- having like three or four canals for the water to concentrate could generate like 30 foot storm surges in the canals again as the water piles up with no where to go.

 

What are those force equations again 50 foot wide wall of water 30 feet high moving at like 70 miles an hour hitting an underfunded canal fix done by work crews who had no idea what they were doing.

 

This could get very interesting.

 

Hmmm seems like we are about ready to see if the levis got rebuilt correctly or not.

 

 

Aug 28, 2012 1:53PM
avatar
Notice how they did not even print what the Consumer Confidence Index numbers were!  Just that they were "unexpectedly" lower.  Liberal Spin.
Aug 28, 2012 1:43PM
avatar
Consumer Confidence is DEAD  !  DOA !  See you ALL at the Cemetery !
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