Stocks fall on jobs, GDP data

US unemployment claims dip, while an estimate on economic growth holds steady. Global markets tumble. European confidence drops unexpectedly. Gold rises, while oil declines.

By TheStreet Staff Mar 29, 2012 7:29AM

TheStreetImage: Wall Street sign (© Corbis/SuperStock)By Chao Deng

 

Updated at 1:18 p.m. ET

 

U.S. stocks were sliding for a third day after initial jobless claims missed expectations amid losses in European markets.

 

The Dow Jones Industrial Average ($INDU) was down 61.9 points at 13,064. The S&P 500 ($INX) was down 11.2 points at 1,394 and the the Nasdaq ($COMPX) was down 29 points at 3,075.

 

Stocks fell Wednesday along with commodities. Materials and energy stocks dragged down the market amid disappointing domestic and European economic data. A report on durable goods in the U.S. saw bounce in February, although one that was less than expected.

 

The number of Americans filing for first-time unemployment benefits fell 5,000 to 359,000 for the week ended March 24 from a revised 364,000 in the prior week. Economists expected claims to come in at 350,000 from an orginally reported 348,000.

 

Also Thursday, the government announced its third read on economic growth in the fourth quarter of 2011. The Bureau of Economic Analysis' third estimate on fourth-quarter GDP held steady at 3%, in line with expectations. The growth rate is up from 1.8% annualized growth rate in the third quarter although still worrisome, especially given that growth is expected to pull back going into the first quarter of 2012.

 

Post continues below.

“The pace of improvement is leveling out and while GDP was not revised the sub components were a bit better for the economy with better final sales and a downtick in the inventory contribution,” said David Ader, strategist with CRT Capital.

 

European stocks were down ahead of a meeting in Copenhagen on Friday where European governments will aim to increase the rescue firewall in the region. German Chancellor Angela Merkel is expected to allow the increase. 

 

The European Commission also said an index of executive and consumer sentiment fell to a reading of 94.4 in March from a revised 94.5 in February.

 

 

On Thursday, Germany's DAX ended down 1.77%, while London's FTSE lost 1.1%. The Hong Kong Hang Seng closed down 1.32%, while the Nikkei Average in Japan finished lower by 0.67% overnight.

 

In corporate news, Best Buy (BBY), the electronics retailer, reported fiscal fourth-quarter profit of $2.47 a share, excluding items, on revenue of $16.73 billion. Analysts were expecting profit of $2.16 a share on revenue of $17.2 billion. Same-store sales dipped 2.4%; Wall Street was expecting a decline of 0.6%.

 

Swiss pharmaceutical company Roche increased its unsolicited offer for Illumina (ILMN) to $51 a share, valuing the U.S. diagnostics company at more than $6.5 billion. Roche's previous offer of $44.50 a share was rejected by Illumina's board as being too low. Illumina told its shareholders to "take no action at this time." 

 

Red Hat (RHT), the open source software company, posted earnings in the February-ended quarter that topped analysts' estimates. Red Hat reported a non-GAAP adjusted profit of $57.2 million, or 29 cents a share, on revenue of $297 million, up more than 20% from last year. Analysts were expecting earnings of 27 cents a share on revenue of $291.2 million. The company also unveiled a $300 million buyback program.

 

Red Lion Hotels (RLH) announced plans to explore strategic options. The company said its board has hired Bank of America Merrill Lynch to look at ways to "maximize shareholder value, including a potential sale of the company or a strategic combination with a third party."

 

May oil futures were down $1.98 to $103.43. April gold futures were shedding $10.20 to $1,647.70 an ounce.

 

The dollar index was 0.19% higher. The benchmark 10-year Treasury was up 12/32 diluting the yield to 2.163%.

 
172Comments
Mar 29, 2012 8:23AM
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It seems to me with all the issues we are dealing with both here in America and abroad that rather than identifying the issue, developing solutions and implementing to resolve the problems we choose to just keep printing money to throw at the problem hoping for a "miracle cure".  Here in America, we have a tremendous need to repair and or replace our infrastructure such as roads, sewers, waterways, electric grid etc. and yet whatever happened to all the promises made by Obama to make this is priority due to the need and the creation of construction jobs?  Instead, the government chooses to give billions of dollars to financial institutions which have little impact on job creation.  It is time to stop printing money to artificially prop our market and financial system but rather reign in our spending, balance the budget and invest only in those projects that creat jobs here in America or are necessary to support certain services and programs.  It's time to stop the waste and start being fiscally responsible.
Mar 29, 2012 9:16AM
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Just the usual Obamanomics drivil... 

 

I see that the Obama Budget lost in the house 414 - 0.  Not even a single Democrat could vote for his Tax and Spend Budget.  Not one wanted to be on record as wanting massive tax increases and massive new spending.   This has to show you just how clueless Obama truely is. 

 

Mr. Obama got his vote on HIS budget.  Shameful.  One democrat even said it was equivelent to his communist manifesto...  I'd hate  to be him when the phone rings, "Please hold for Mr. Obama"...

 

And of course the Senate has not passed a budget in years...  This years didn't even come up for a vote.  I wonder if Obama's would lose again 97-0.

 

Sadly this President and the Demcorats refuse to lead.  They just stall. And the try to pin the label on Republicans as the party of No...  Seems with EVERY democrat in Congress voting against Obamanomics their self preservation instincts are kicking in....

 

 

Mar 29, 2012 10:45AM
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This country cannot afford 4 more years of Obamanomics.........financially, morally, or ethically. Gas, mandated healthcare, unemployment, Americans losing homes, stock market corrupt. Vote Obama out in 2012.
Mar 29, 2012 11:48AM
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I wish I had a dime for everytime the media changed their story on jobs!  I'd be rich.  Just think about this:  This will all continue until one event happens - when the majority of people find out that capitalism isn't evil, consumerism is...let that sink in a minute.  Corporate greed would be non-existent if it weren't for all the kool-aid drinking, video game playing, lazy generations (which includes most liberals and lots of conservatives) who believe they are entitled to a job that is better and pays more than their parents had at RETIREMENT!  They believe they should have a bigger house, nicer car, bigger stock portfolio, etc.  WAKE UP AMERICA!  Hard work and saving for what you want will be the only thing that will get our economy back on track.  Stay away from credit and live below your means!
Mar 29, 2012 9:40AM
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For some liberals the rise in fuel prices should be a religious experience.  Isn't this why you voted for Obama.  You should enjoy the socialistic approach of letting fuel prices skyrocket such that alternative energy suppliers can get their feet in the door.  This is what you folks voted for.  Green, green, green, at any cost.  Amazing how liberals will vote when it sounds good but turn to someone else to pay their way when reality comes a knockin.
Mar 29, 2012 12:32PM
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Best Buy closing 50 Stores     Economy sucks   gas over 4 Dollars    Hey lets blame it on Bush   obame has only been in office 3 years     and  3 or 4 months    If the U.S.  had done not a dang thing after Bush left we would have been much better off now.   Period
Mar 29, 2012 11:35AM
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US jobless claims fall to lowest level in 4 years.

 

Think I saw this last week also, but wait they revised last weeks up. Wait till next week they will revise this weeks up.   Just more kool-aid for all to drink and somehting for MsM and others to lie about

Mar 29, 2012 9:22AM
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 For some my contention the Goverment economists are well aware of the serious issues Free Trade has leveled on our American middle class are real. .  I do believe The large internationals and the US governement are in lock step going forward.  They are well aware of the damage they are doing to our working class and are prepared to weather this storm until wages; and the ensuing lifestyle, are level around the world.  The ultimate goal is to be able to have any business in any country move products and factories to any other keeping the wage costs constant.  This is the ultimate goal like it or not.
Mar 29, 2012 10:44AM
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Chinese firm surpasses Exxon in
 oil production

This is another statement that CONFIRMS we are getting screwed by the oil companies. They use the excuse that China is taking all of our oil, you jack asses they are producing more oil than Exxon. How are they taking all of our oil? They can feed us all this BS because we have no way of proving them wrong until statements like this are made. Just like the economy, they say it's getting better, bull****! Today's headlines read Best Buy to close 50 stores, yea it sounds like things are getting better. Almost every day you read something like this but the economy is getting better. The economy will only get better when gas prices come down and stay down. We have no confidence in our leaders to help us out. We come out of a depression in 08 thinking we were going to be okay and then gas shot back up again and is staying there now, we are not falling for this again. You will never see us spend like we use to, first of all we don't have it because of gas and food prices and secong of all we know if it would happen to drop down to where we could afford it it won't stay down long. The American dream don't exist anymore. It's American survival now!

Mar 29, 2012 9:02AM
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How about a little reality? When the unemployment benefits run out and they can't find work or don't want to work many wind up on welfare. These people should count  as the unemployed. They even move these people for free when they want a bigger place. Treating these people better than workers is unjust. We need change in the right direction and not turn America into a communist country. Too many have die protecting our freedom. This is a fake economy supported by government lies.
Mar 29, 2012 9:14AM
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Rememeber until we exceed our all time high on the Dow we are still in a bear market.  Bear markets are alluring but dangerous.  Everyone loses in a bear market always.  And this thing is uglier than a bad wife.  Danger Danger Danger. Reports of insider selling should be a shot across the bow.
Mar 29, 2012 12:06PM
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The point is "All this will not end well". Just like the dot com & housing bubble. Now we have a government pumped up market today and the welfare ranks are over flowing. It's too good to be true. Something is going to pop. More financial damage to those who don't see it coming.
Mar 29, 2012 9:09AM
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Swag, I said $200 billion is a start. I would prefer to see defense cut in half too. $400 billion would save $4 trillion over 10 years. That would go a long way to help balance our budget. And we need to spend $2 trillion on public works projects over the next 10 years. That's a lot of jobs all going toward rebuilding our country that is falling apart.

 

Just no "bridge to nowhere" please!!!

Mar 29, 2012 9:45AM
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hmmm...

 

Why is anyone not covered by Health Insurance?  Are people holding guns to their heads saying we will not allow you to buy healthcare coverage?  No.  

 

So what is the reason people choose to go without?  Is it because they CHOOSE to lead unhealthy life styles>  Do they wait until they are truely sick and then realize they gambled and lost?  Did they choose flat screen TV's and cell phones over healthcare coverage?  Didi they buy a car or house instead of healthcare coverage?

 

Mr. Obama could have just "mandated" that those without coverage BUY their own.  Instead he tried to mandate that others pay for their coverage and for those without.  Typical socialist approach to a problem. 

 

He could have expanded Medicare to to cover everyone, and raised the tax to close to 15% to pay for it.   Before government involvement with Medicare and Medicaid, Healthcare consumed 7% of GDP, today that number is 17%, which means universal healthcare requires a 17% tax to cover its cost. 

 

Why people have faith in the government for the healthcare is beyond me.  Government is the problem, not the solution....

Mar 29, 2012 8:54AM
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After a night of watching MSNBC, actually half a night, the first couple hours the TV was on Cartoon Network, but I couldn't tell the difference...  They're like right nest to each other on the menu so it's an easy mistake to make...  Anyways, I'm left with one question.  How is it the government can be trusted with healthcare and be incompetent, or corrupt when conducting a shooting investigation?
Mar 29, 2012 9:02AM
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The market has gone from 6k to 13k. Some of you guys have been screaming and complaining the whole way up.

 

I'd be upset too if I missed a rally like that!

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There are many variations of the multiplier effect, but in essence it measures the circulation of currency in a local economy.  Your income is spent, which becomes someone else's income.  When they spend that, it becomes another's income, ad infinitum until that dollar leaves the system via the purchase of an import. 
Basically the multiplier effect is not real it was merely a PR pitch for football and other sports teams to get the local governments to build their stadiums for them. I remember when we got our lastest stadium the PR guy from the sports team said it was a great investment for the city (during the down turn we missed a couple of payments and the bill got $120 million in extra loan charges and interest rate hikes add to the existing $400 million tab what a deal) but when asked why a private investor like the sports team should go ahead and reap the benefits of owning the stadium as it was good for the city government to own it. The PR guy said it was a very bad move for the sports team to build the stadium out of it's own pocket. 

A bunch of garbage came out his mouth and part of it was the multiplier effect that the stadium would bring in more taxes than the payment on the stadium each month (that did not happen as it was a hotel tax and guess what people don't travel and stay in hotels like they use to they use skype for free). 

If the multiplier effect was real I could go to any city take Detroit and spend just $1 and in a years time that dollar would double every minutes and become like $20 trillion in one year. Hey I just paid off the US deficit by spending one dollar WOW!!!
Mar 29, 2012 11:38AM
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Why is the number of first-time filers for unemployment benefits considerably higher than a week ago (low 350,000's) and we're told it dropped?  It appears the prior week's number was revised upward by about 10,000. 
Mar 29, 2012 10:53AM
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If he was a retard, what does that make the Congress under him? Sure, now some of them say he was a liar or he duped them. Hindsight is always 20/20. Seems our representatives stopped representing us quite some time ago, even before the Bush days.
Mar 29, 2012 7:57AM
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Hey..not to worry.  It's change we can believe in.  Not saying what kind of change.  While niether political party has monopoly on the solution, I can certainly appreciate the defecrats doing the best they can to bring in socialism.  Yea....that's the answer.
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