Dow falls 59 as late-day gloom kills a rally
The selling offsets decent earnings from Cisco Systems and Home Depot. Techs fall, led by Microsoft and Intel. Michael Kors rises. Gold and oil slip. The major averages have fallen more than 6.6% since mid-September.
(Reuters) Stocks fell back in late trading today as continuing worries about the effects of the fiscal cliff on the domestic economy pulled the major averages lower and offset strong earnings from Home Depot (HD).
Cisco Systems (CSCO) shares were up 7.4% after hours to $18.12. Fiscal-first quarter earnings of 48 cents a share were up 11.6% from a year ago and beat Street estimates by 2 cents. Revenue was up 6% to $11.9 billion, beating the Street estimate of $11.8 billion.
But it was the kind of sell-off you don't like to see. The Dow Jones industrials ($INDU) were up as many as 83 points on the Home Depot news -- and lost all of the gain and then some. Financial and technology shares led the market lower. Also weighing on the market: a rising dollar against the euro, which pushed commodity prices and interest rates lower.
Microsoft (MSFT), down 90 cents to $28.14, weighed heavily on technology stocks after the company announced that Steven Sinofsky, who led the development of its Windows 8 operating system, is leaving the company. Sinofsky had been considered a front runner to succeed Steve Ballmer as CEO. (Microsoft is the publisher of MSN Money.)
The Dow fell 59 points to 12,756, its fourth loss in five sessions. The Standard & Poor's 500 Index ($INX) was off 5.5 points to 1,375, its third loss in the last five days. The Nasdaq Composite Index ($COMPX) dropped 20 points to 2,884, its fourth loss in five sessions.
The Nasdaq-100 Index ($NDX), heavily influenced by Apple (AAPL) fell 21 points to 2,562. Apple was up 7 cents to $542.90.
Futures trading suggests a decent open for stocks on Wednesday, much like today. The big question will be if a rally will hold.
|Energy prices -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|Crude oil (-CL)||$85.38||$85.57||-1.00%||-13.61%|
|Heating oil (-HO)||$2.9608||$2.9992||-3.31%||1.60%|
|Natural gas (-NG)||$3.7390||$3.5700||1.27%||25.09%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.6538||$2.6763||0.89%||-0.14%|
|(per gallon; AAA)|
The Dow has fallen 6.2% since peaking at 13,597 on Sept. 20. The S&P 500 has fallen 6.2% since peaking at 1,466 on Sept. 14. The Nasdaq has drooped 9.4% since its Sept. 14 high. Apple has fallen $22.7% since peaking on Sept. 19.
The pullback has trimmed the Dow's gain for the year to 4.4%. The S&P 500 is still up 9.3%, while the Nasdaq is up 10.7%. It had been up 22% for the year as of Sept. 14.
Intel (INTC) continued to sag on worries about the future of personal computers, hitting a new 52-week low of $20.18 before closing at $20.28, down 48 cents. Rival Advanced Micro Devices (AMD) said it has hired J.P. Morgan to look at strategic alternatives. An outright sale, however, doesn't seem likely.
Home Depot led the Dow and was the second-best performer among S&P 500 stocks (after Advanced Micro Devices), rising $2.22 to $63.38. The retailer reported earnings that beat expectations and raised its outlook.
Shares of TJX Cos (TJX) shot up $1.09 to $42.06 after the operator of the Marshalls and T.J. Maxx discount chains said its quarterly profit beat Street estimates by a penny a share. The S&P Retail Sector Index ($RLX) rose 6.3 points to 643.
Energy stocks finished lower as crude oil in New York settled down 19 cents to $85.38. Brent crude, traded in London, was off 88 cents to $108.19 a barrel. Gold (-GC) fell $6.90
was also lower in New York.
Technology shares came under pressure after Microsoft announced the departure of Sinofsky. Microsoft shares slid 90 cents to $27.09.
The euro debt crisis and the fiscal cliff weigh on markets
The market was held back in part by the continuing euro zone debt crisis. There were also those concerns about the "fiscal cliff" in the United States, and the debt crisis in the euro zone.
The fiscal cliff is a series of budget cuts and tax hikes that begin to take effect in the new year. Market participants worry that if no deal is reached to avoid going over the cliff, the economy could fall back into recession.
The Dow is down 2.6% this month, with the S&P 500 is 2.7%. The Nasdaq is off 3.1%.
Concerns over the fiscal cliff contributed to the Dow's and S&P 500's worst week since early June last week, with no sign of a bottom despite a drop of almost 3% over the past two weeks.
"The attention in the equity markets has shifted more noticeably to the possibility that the U.S. fails to properly handle the so-called fiscal cliff," Ari Wald, an analyst at PrinceRidge Group, told Reuters.
Wald said equities in developed countries have been outperforming U.S. stocks despite worries about the euro zone's financial health.
In other earnings news, AK Steel (AKS) shares fell 96 cents to $4.50 after forecasting a fourth-quarter loss.
But shares of Michael Kors Holdings (KORS) gained 43 cents to $51.01 after the fashion designer's company raised its outlook.
Charley Blaine contributed to this report.
|Short hits from the markets -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0900%||0.090%||-18.18%||800.00%|
|5-year Treasury note||0.620%||0.643%||-13.29%||-25.30%|
|10-year Treasury note||1.589%||1.611%||-5.75%||-15.07%|
|30-year Treasury bond||2.721%||2.745%||-4.56%||-5.82%|
|U.S. Dollar Index||81.14||81.106||1.44%||0.77%|
|(in U.S. $)|
|U.S. $ in pounds||£0.630||£0.630||1.63%||-2.14%|
|Euro in dollars||$1.27||$1.27||-1.94%||-1.91%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.787||€ 0.787||1.98%||1.94%|
|U.S. $ in yen||79.55||79.55||-0.31%||3.18%|
|U.S. $ in Chinese||6.25||6.23||0.33%||-1.13%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$85.38||$85.570||-1.00%||-13.61%|
Check out one of todays participants comments. He only had 2 understandable phrases-2 % and FAIR SHARE. He thinks taxes will sustain his unions bloated pensions. He apparently doesnt know tax revenues result from wealth, not the reverse.
We are definitely not on course for wealth generation much less wealth redistribution.
HEY LIBS and PROGRESSIVES-youve been had.
Those gathering at the White House today would make Stalin proud. Keep a daily tally of planned layoffs, workweek reductions, plant closings and store closings for 2013 and obvious priority being given to the group meeting at WH today, you are delusional if any thing points to recovery under this admin. Even Obamas reflection, NBC is announcing layoffs.
YOU AINT SEEN NOTHING YET.
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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