Stocks struggle on jobs weakness, economic worries

The Dow sees a small gain; the Nasdaq and S&P 500 are lower. Jobless claims improve slightly. Oracle earnings don't impress. Trulia has a big IPO. Shares of Norfolk Southern and Bed Bath & Beyond sag. Economic reports from Europe and China are weak.

By Charley Blaine Sep 20, 2012 1:09PM
Charley BlaineUpdated: 6:53 p.m. ET

Stocks opened badly today, but the good news was that the major averages recovered nearly all of their losses. The Dow Jones industrials ($INDU) gained 19 points to 13,597.

The market was whacked at the open by disappointing reports on manufacturing in China and Europe, a lackluster report on U.S. initial jobless claims and a profit warning Wednesday from railroad giant Norfolk Southern (NSC) and disappointing earnings from home-furnishings retailer Bed Bath & Beyond (BBBY).

But the market turned after a manufacturing report from the Philadelphia Federal Reserve Bank wasn't as bad as feared. ConAgra Foods (CAG) shares jumped after the company raised its quarterly dividend and boosted its profit forecast.  In addition, an initial public offering from Trulia (TRLA), a real estate data site similar to Zillow (Z), generated lots of excitement. The shares closed at $24, up $7 from their offering price of $17.

After the close, shares of database software giant Oracle (ORCL) were up slightly to $32.36 from a regular close of $32.26. The company reported 53 cents in earnings per share, in line with Street estimates. Revenue of $8.2 billion was down 2% from a year ago and missed the consensus estimate of $8.42 billion by $240 million. 

While the Dow finished higher, the Standard & Poor's 500 Index ($INX) ended down 1 point to 1,460, and the Nasdaq Composite Index ($COMPX) dropped 7 points to 3,176; the index had been down as many as 26 points.

Article continues below.

Even if its gain was small, the Dow was higher for a third straight day; the S&P 500 and Nasdaq were lower for the third time in four days. Again, the declines were small.

The Nasdaq-100 Index ($NDX) was off 2 points to 2,862. Apple (AAPL), the largest influence, was off $3.40 to $698.70. The shares had closed above $700 on Tuesday for the first time and ended Wednesday at a record $702.10.


Futures trading suggests a modestly higher open on Friday. The market will deal with the Labor Department's monthly Consumer Price Index report as well as the University of Michigan's Consumer Sentiment Index.


Oracle hurt by problems with hardware business

Oracle shares were up 2 cents to $32.28 after hours after falling 52 cents to $32.26 in regular trading.

The lack of enthusiasm may reflect guidance for the second quarter: Sales will be unchanged or show an increase of as much as 4%, co-President Safra Catz said on a conference call. Profit, excluding one-time charges, will be 59 cents to 63 cents a share, she said. Analysts has projected 4.6% sales growth to $9.2 billion.

First-quarter net income rose 11% to $2.03 billion, or 41 cents a share, from $1.84 billion, or 36 cents, a year ago. Oracle, the largest maker of database software, said its hardware-systems products revenue declined 24% to $779 million.Brent Thill, an analyst at UBS in San Francisco, had projected only a 14% sales decline, Bloomberg News said.

The company is pushing sales of its high-end Exadata and Exalytics machines, which use Intel (INTC) chips. Sales of high- end "engineered systems" more than doubled, co-President Mark Hurd said in the statement. Sales of servers using Sun’s Sparc chip are falling.

Crude moves higher; gold is flat

Commodity prices were basically flat. Crude oil (-CL) in New York settled up 12 cents to $92.42 a barrel. Brent crude was added $2.31 to $110.50 a barrel.

The national daily average price of gasoline was $3.846, according to AAA's Daily Fuel Gauge Report. That's down from Wednesday's $3.854 and the sixth straight daily decline.

Gold
(-GC) settled down $1.50 to $1,770.20 an ounce. 


Interest rates moved lower as demand for Treasury securities grew and also pushed the dollar higher against the euro. The 10-year Treasury yield was at 1.777%, down from Wednesday's 1.8782%.

 

Energy prices -- New York close (Updated)



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$92.42

$92.30

-4.20%

-6.49%
(per barrel)











Heating oil (-HO)

$3.0975

$3.0440

-2.60%

6.29%
(per gallon)











Natural gas (-NG)

$2.7970

$2.7620

-0.07%

-6.42%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7809

$2.7273

-6.46%

4.65%
(per gallon)











Brent crude 

$110.03

$108.19

-3.96%

2.47%
(per barrel)











Retail gasoline

$3.8460

$3.8540

0.44%

17.40%
(per gallon; AAA)












September looks good, but the transports don't
So far this week, the Dow is off 0.2%, with the S&P 500 down 0.6% and the Nasdaq off .4% But September, historically the worst month for stocks, is bucking the trend. The Dow is up 3.7%, with the S&P 500 up 3.6% and the Nasdaq up 3.4%.

Much of the September gains come from the weeks of Sept. 3 and 10 when the Dow rose 1.7% and 2.2%, respectively. The Federal Reserve announced its economic stimulus plan on Sept. 13. But the fact is the stock market has had just one down month in the last 12 -- in June, when it fell more than 6%.

While the broad measures look solid, they can mask problems.

The Dow Jones Transportation Average ($DJT), a leading indicator for the economy, fell 141 points to 4,962 today, mostly because of Norfolk Southern, which was off down $6.58 to $66.11 -- the worst performer in the index today.


Norfolk Southern cited weakness in coal volume and merchandise shipments -- steel, chemicals and other products.

The railroad's warning has also pulled down shares of Union Pacific (UNP), CSX (CSX) and Kansas City Southern (KSU).

Only small improvement in jobless claims
Jobless claims were a disappointment, falling just 3,000 to 382,000 last week from a revised 385,000 a week before. The four-week moving average, which smooths out week-to-week volatility, was 377,750, up 2,000 from the week before and the fifth straight increase.

The report suggests the September jobs report, due on Oct. 5, will show little improvement.

At the same time, the so-called Philly Fed Index, issued by the Federal Reserve Bank of Philadelphia, neared the break-even level for the first time in six months. The index measures business conditions in Pennsylvania, New Jersey, Maryland and Delaware. The index overall was at -1.9 in September, up from -6.9 in August. In other words: better but hardly great.

Helping the index was a rise in new orders to 1.0 from -5.5. And, a possible signal of things ahead, inventories declined sharply to -21.7 from -6.9. The survey's future indicators rose to 41.2 from 12.5, the highest level since January.

Continued weakness in China and Europe
China's manufacturing activity contracted in September for the 11th straight month. The preliminary HSBC China Manufacturing Purchasing Managers Index rose slightly to 47.8 in September from a final reading of 47.6 in August. A reading below 50 suggests China's economy is stll contracting, but it is showing signs of stabilization.

Chinese stocks stumbled to their lowest level since February 2009 to lead Asian markets lower after the data. It didn't help that Japan's trade deficit widened in August from a month earlier as both exports and imports fell. Japan's data, however, was above expectations.

Private-sector activity also contracted in the eurozone. The Markit September PMI index fell to 45.9 from 46.3 in August, below forecasts for 46.7 and the steepest contraction since June 2009, despite some positive signals recently out of Germany, the region's largest economy.

The biggest concern was an accelerated rate of loss of new business -- the largest monthly fall since May 2009.


J.C. Penney gets socked

Sixteen of the 30 Dow stocks were ahead on the day, led by Kraft Foods (KFT), up 76 cents to $41.60. Kraft leaves the Dow after Friday's close, to be replaced by UnitedHealth Group (UNH).


Microsoft (MSFT), Chevron (CVX) and Exxon Mobil (XOM) were the second-, third- and fourth-best Dow performers.  (Microsoft publishes MSN Money.)


Wal-Mart Stores (WMT) was a winner, up 38 cents to $74.74. The retail giant said it would discontinue sales of Amazon.com's (AMZN) Kindle family of products. Amazon shares were down 87 cents to $260.81.


Meanwhile, 203 S&P 500 stocks were higher, led by Conagra and discount retailer Dollar Tree (DLTR). J.C. Penney (JCP) and Bed Bath & Beyond were the laggards.


J.C. Penney was off $3.26 to $25.83 after the department store chain told analysts it expects its financial struggles to continue during the second half of the year.


Dollar Tree and Adobe Systems (ADBE) were the Nasdaq-100 leaders. Forty-eight stocks in the index were higher. Bed Bath & Beyond and Green Mountain Coffee Roasters (GMCR) were the laggards.


The latter was off $2.97 to $27.84 after Starbucks (SBUX) priced its new Verismo single-cup coffee maker near where Green Mountain sells its Keurig maker. Starbucks was up $1.08 to $51.19.


Short hits from the markets -- New York close (Updated)



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.110%

11.11%

900.00%
5-year Treasury note 

0.693%

0.689%

16.28%

-16.51%
10-year Treasury note

1.777%

1.782%

13.76%

-5.02%
30-year Treasury bond

3.032%

3.032%

12.97%

4.95%
Currencies











U.S. Dollar Index

79.478

79.127

-2.14%

-1.30%
British pound

1.6223

1.6228

2.11%

4.41%
(in U.S. $)

 








U.S. $ in pounds

£0.616

£0.616

-2.07%

-4.23%
Euro in dollars

$1.30

$1.30

3.02%

0.16%
(in U.S. $)

 








U.S. $ in euros

€ 0.771

€ 0.766

-2.93%

-0.16%
U.S. $ in yen 

78.43

78.37

-0.08%

1.73%
U.S. $ in Chinese

6.32

6.31

-0.62%

-0.03%
yuan











Canada dollar

$1.025

$1.026

1.03%

4.45%
(in U.S. $)

 








U.S. dollar 

$0.977

$0.974

-1.02%

-4.26%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,770.20

$1,771.70

4.89%

12.98%
(per troy ounce)

 








Copper (-HG)

$3.759

$3.814

8.74%

9.40%
(per pound)

 








Silver (-SI)

$34.6820

$34.5880

10.30%

24.24%
(per troy ounce)

 








Wheat (-ZW)

$8.7950

$8.8150

-1.12%

34.74%
(per bushel)

 








Corn (-ZC)

$7.4600

$7.565

-6.72%

15.39%
(per bushel)

 








Cotton 

$0.7522

0.7641

-2.64%

-17.95%
(per pound)

 








Coffee

$1.6860

1.744

2.34%

-26.58%
(per pound)

 








Crude oil (-CL)

$92.42

$92.30

-4.20%

-6.49%
(per barrel)










 
299Comments
Sep 20, 2012 2:15PM
avatar
When can we start the recovery from Obama's recovery?
Sep 20, 2012 2:13PM
avatar

I am not worry about the economy since it is non-existent

I worry about this guy who claimed the presidency

and I worry a lot more about all those who voted for him

 

Morale: if "he" keeps his job, you will lose yours.

Sep 20, 2012 3:30PM
avatar
Obama's face is going to be on the $1 trillion bill. That way, every time you fill up your gas tank, you can be reminded of the douche bag that bent the world over. 
Sep 20, 2012 2:21PM
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Jobs at start up businesses - lowest on record.

Bush I - 11.3 per 1000
Clinton - 11.2 per 1000
Bush II - 10.8 per 1000

OBAMA - 7,8 per 1000

and has gone down for 3 straight years.

Source - US Census Department
Sep 20, 2012 2:05PM
avatar

Looks like Old Bendover's funny money bank handouts are helping the markets recover some of their losses.  This will help dilute the dollar, raise commodity prices and keep the banks flush with cash while Bernanke sticks a few more million in HIS hidden off shore accounts. 

 

We need to reinstate Glass -Steagle, get the Banks out of the brokerage business and then let the markets correct so that they can recover naturally.  This won't happen because Bernanke has to make Obama look good to keep his job.  If Obama loses Bernanke will immediately resign and leave the country to avoid prosecution for massive insider trading.

Sep 20, 2012 3:12PM
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If you want to see what 100 years of libtard rule gets you.....look at Chicago. A war zone where only criminals have guns and more debt per capita than any other city in America.
Sep 20, 2012 3:39PM
avatar

Libs are finally happy......... They can legally vote for multiple people for president.

 

Thanks Obama. or Barry or Harrison..........

Sep 20, 2012 2:23PM
avatar

So why is entrepreneurship still declining in the United States? …  While this report documents a disturbing weakness in startup job creation, it does not explain the cause of decline. There is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment.


1. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown.


2. The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars.

3. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits. New firms tend to use part-time and contract staffing rather than full-time employees during the startup stage. According to Labor Department data, the typical American today only takes home 70 percent of compensation as pay, while the rest is absorbed by the spiraling cost of benefits (e.g., health insurance). The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors.


4. Finally, there has been a steady barrier erected to entrepreneurs at the local policy level. Brink Lindsey points out in his book Human Capitalism that the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans. The quantitative impact of the shifting policies on startup jobs is in need of further study. There is a widespread sense that globalization of the economy exposes companies to new challenges by leveling the playing field for trade. There is no doubt a level playing field among economic institutions as well, where service-based employment can move quickly from one jurisdiction to another. By cracking down on employing Americans part-time, and mandating higher benefits, new American policies may be pushing jobs overseas. This is an issue policymakers must consider carefully when designing rules and regulations for the 21st-century economy

 

Sep 20, 2012 4:11PM
avatar
Reporter --  "President Bounel would you consider meeting with the Council on Jobs since President Obama does not seem interested"
Sep 20, 2012 3:04PM
avatar
So with one more official day of summer I have to ask....

How did you enjoy your 4th annual "Recovery Summer" this year?

LOL  
Sep 20, 2012 3:45PM
avatar

Telephone support person got in trouble for hanging up on the president..... seems she was asking him for the last 4 digits of his SS# and after he gave her 16 numbers she hung up on him..... Poor girl didn't know he had so many SS#s........ he wasn't even through giving her the numbers.

 

Sep 20, 2012 3:12PM
avatar
News Flash ---  Ballots Have to be Printed on Larger Paper to Get All Of Obama's Names on Them.
Sep 20, 2012 3:28PM
avatar
Emptychair? is that your name or do you like dudes sitting on your face?
Sep 20, 2012 3:21PM
avatar

The bust is coming! Told ya so!

I saw an article on yahoo page and it said that Bernanke would ruin the U.S. by 2013 by giving the Billions and Billions to wall street. I wrote to Bernanke, the fed, the white house, and Obama and told them we need to get rid of him and the whole administration before they run the U.S. into bankruptcy.

Get the feds out of wall street and let the chips fall as they may. If it were your own business the feds wouldn't send you billions, so why should they give wall street money to keep making profits? If threy fold then let them fold!@!!!!!!

Sep 20, 2012 4:02PM
avatar

Tax penalty to hit nearly 6M uninsured people

 

This a headline in MSN money news yesterday. Looks like another Obummer lie about Healthcare Reform about to come true.  This will mainly the middle class, the already overburdened middle class now caught between more taxes, higher gas and food prices and declining or at least stagnant incomes.  I am beginning to realize that Obummer has adifferent personality for each one of his aliases.

Sep 20, 2012 4:28PM
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Anyone else notice the lack of dating spam.  Good job MSN.  Give props when deserved.

Sep 20, 2012 4:45PM
avatar

Democratic election advisors today suggested to the president that he should include all his past names on the ballot so people that knew him back then will recognize and vote for him. 

 

Barack Soetoro Bounel Obama

 

It is believed he will pick up a few votes from some old high school stoners he hung out with.

Sep 20, 2012 2:56PM
avatar
I heard Occupy Wall Street  has adopted a new strategy. They are going to camp out across from the Fed. and cheer every time an armored car full of freshly printed money leaves. On the other hand their second group of campers at wall street will be protesting the firms receiving the deliveries by blockading the driveway.
Sep 20, 2012 4:54PM
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