Stocks end week lower after early gains fade

The market's loss is its first in three weeks. The Dow rises nearly 100 points but ends down slightly on worries about Europe. Zynga closes below its IPO price. Research In Motion slumps. Crude oil and gold rise slightly.

By Charley Blaine Dec 16, 2011 2:09PM
Charley BlaineUpdated: 7:34 p.m. ET.

Stocks ended the day mostly higher, though not a lot higher, despite never-ending worries about Europe. The major averages ended lower for the week after two weeks of gains.

It was not a day of enthusiasm. After a strong open, the major indexes quickly began paring their gains. The Dow Jones industrials ($INDU) saw a 99-point gain turn into a small loss, with IBM (IBM) the biggest contributor to the loss.

Some of the pullback may have been due to options expirations. But European fears were probably the larger issue, especially after Fitch Ratings downgraded six European countries and said France could lose its AAA rating.

At the same time, shares of social games developer Zynga (ZNGA) disappointed many hoping for big gains on their first day of trading. The shares, which went public at $10 late Thursday and hit $11.50 soon after trading began, ended down 50 cents at $9.50.

The Dow closed down 2 points to 11,866. The Standard & Poor's 500 Index ($INX) ended up 4 points at 1,220. The index had been as high as 1,231. The Nasdaq Composite Index ($COMPX) was up 13 points to 2,555; it had been up as many as 44 points.

Article continues below.
You can name your reason for why stocks got off to a strong start today. We'll try three: Inflation is tamer than earlier in the year. The domestic economy has been showing more strength than expected.  And, for today, anyway, commodity prices were higher -- especially copper (-HG).

The mediocre performance came on a quadruple-witching day, which often produces abnormal volatility, particularly at the close. Many futures contracts expire today, as well as options on futures and options on stocks and on stock indexes. 

You could see the volatility in shares of Groupon (GRPN), which were up as much as 8% to $25.15 just before the close and ended at $23.04, down 4 cents.

The Dow ended the week down about 2.6%, with the S&P 500 down 2% and the Nasdaq down 3.5%. For the month, the Dow is off 1.5%, with the S&P 500 off 2.2% and the Nasdaq down 2.5%.

What all that means is that 2011 will be a year to forget for stocks. The Dow is up 2.5%, but the S&P 500 is down 3%. The Nasdaq is down 3.7%.

But remember, things could be worse. The Dow fell 34% in 2008.

Markets for the week



12/16/2011

12/9/2011

% chg.

YTD chg.
Dow Industrials

11,866.39

12,184.26

-2.61%

2.50%
S&P 500

1,219.66

1,255.19

-2.83%

-3.02%
Nasdaq 

2,555.33

2,646.85

-3.46%

-3.68%
Russell 2000

722.05

745.40

-3.13%

-7.86%
Crude oil 

$93.53

$99.41

-5.91%

2.35%
(per barrel)











U.S. Dollar Index 

80.25

78.68

1.99%

1.21%
10-yr. Treasury

1.85%

2.05%

-9.65%

-43.90%
Gold

$1,597.90

1,716.80

-6.93%

12.42%

Copper moves higher
Copper settled up 6.4 cents to $3.331 a pound, but it had risen to $3.3775 before its gains were tempered as the euro drifted lower against the dollar. 

The euro was at $1.3033 this afternoon, up slightly from Thursday and but off 2.6% for the week.

Gold (-GC) settled up $20.70 to $1,597.90 an ounce. Silver (-SI)  was up 39.7 cents to $29.671 an ounce. For the week, gold was off 6.9%; silver fell 8%.

Crude oil (-CL) settled down 34 cents to $93.95 a barrel in New York. It had been as low as $92.52. Brent crude for February delivery was off 25 cents to $103.35. That reflects the worries about economies in Europe. For the week, light sweet crude in the States was down 5.9%; Brent fell 4.9%.

The retail national price for unleaded gasoline was $3.25 today, according to AAA's Daily Fuel Gauge Report. That was down slightly from Thursday and off 18.4% from its peak in early May. Gasoline is is still up 16.4% for the year.

Interest rates were lower, with the 10-year Treasury yield falling to 1.854% from Thursday's 1.913% and 3.31% at the end of 2010.

Energy prices -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$93.53

$93.87

-6.81%

2.35%
(per barrel)











Heating oil (-HO)

$2.8005

$2.8225

-7.42%

10.10%
(per gallon)











Natural gas (-NG)

$3.1270

$3.1270

-11.92%

-29.01%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.4870

$2.4877

-2.79%

1.38%
(per gallon)











Brent crude 

$103.35

$103.60

-6.49%

9.08%
(per barrel)











Retail gasoline

$3.2500

$3.2590

-1.37%

5.79%
(per gallon; AAA)












CPI is unchanged
The consumer price index was unchanged in November after falling 0.1% in October. Economists expected to see a 0.1% increase, the Labor Department said. Excluding food and energy costs, the index rose 0.2%, slightly higher than expectations of a 0.1% gain.

While that sounds great, Nomura Securities noted today, the move by many people to rent homes rather than buy has put pressure on rents and is pressuring overall housing costs.

Meanwhile, Fitch Investors said it may downgrade the debt of six European countries -- Italy, Spain, Ireland, Belgium, Slovenia and Cyprus. After last week's European Union summit, The ratings firm said it "has concluded that a 'comprehensive solution' to the eurozone crisis is technically and politically beyond reach."

Standard & Poor’s said that failure by European leaders to resolve the debt crisis "could lead to a more pronounced economic downturn." It also said that net exporting euro nations Netherlands, Germany, Belgium, Austria, and Finland face a risk of a bigger contraction than net importers from "deteriorating external demand."

European car sales fell the most in five months in November, the Brussels-based European Automobile Manufacturers Association said today. Ireland’s economy shrank 1.9 percent in the third quarter, the most in more than two years, according to a separate report.

Meanwhile, Fitch downgraded stocks of eight giant banking companies: Bank of America (BAC), Barclays (BCS), BNP Paribas (BNPQY), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), Morgan Stanley (MS) and Societe Generale (SCGLY). All but Societe Generale were down on the day.

The KBW Bank Index ($BKX), which tracks U.S. banks, was up slightly to 37.71.

Home Depot, Microsoft lead the Dow

Twenty of the 30 Dow stocks were higher, led by Home Depot (HD) and Microsoft (MSFT). The laggard was IBM, down $3.91 to $183.57. That subtracted about 30 points from the blue-chip index. IBM's shares are down more than 6% this week. (Microsoft is the publisher of MSN Money.)

Sixty-nine Nasdaq-100 ($NDX) stocks were higher, led by Vertex Pharmaceuticals (VRTX) and Adobe Systems (ADBE). The index, which tracks the largest Nasdaq stocks, was up 11 points to 2,238.

About 310 S&P 500 stocks were higher, led by Adobe and Cameron International (CAM).

Ugly day for Research In Motion

The misery continued for BlackBerry maker Research In Motion (RIMM), with shares down $1.69 to $13.44. The shares had traded as low as $13.12, their lowest level since January 2004. The stock was the worst performer among Nasdaq-100 stocks.

Yes, the company beat Wall Street's expectations for its fiscal third-quarter but offered a disappointing outlook. Worse, it said a new generation of BlackBerries, critical to its future, won't be available until the fall of 2012.

"The last few quarters have been some of the most trying in the history of this company," RIM co-CEO Jim Balsillie said during an earnings call with analysts on Thursday. "We understand shareholders may feel like we let them down."

Adobe earnings cheer
Shares of Adobe Systems, the graphics design software developer, were up $1.74 to $28.20. The company posted above-consensus results for its fiscal fourth quarter. Adobe earned 67 cents a share on sales of $1.15 billion in the three months ended Dec. 2, better than the consensus estimate of 60 cents in earnings and $1.09 billion in sales. Adobe sees non-GAAP profit ranging from 54 cents to 59 cents a share for its fiscal first quarter and $2.37 to $2.47 a share for the full year. Wall Street sees 58 cents and $2.44.

United Rentals (URI) agreed to buy rival rental equipment maker RSC Holdings (RRR) for about $1.9 billion in cash and stock. United Rentals will buy RSC for $18 a share, a 58% premium to RSC's Thursday's close of $11.37. Wall Street loves the deal. RSC was up $6.58 to $17.95. United Rentals was up $1.85 to $27.89.

Darden Restaurants (DRI) shares were off 6 cents to $43.68. The owner of Olive Garden and Red Lobster restaurants earned $54.1 million, or 41 cents a share, from continuing operations in the fiscal-second quarter. That's down from year-earlier earnings of $75.8 million, or 54 cents, a year earlier. Sales were $1.83 billion, up from $1.73 billion last year. The Street had expected earnings of 41 cents. a share in the quarter.

Cablevision (CVC) shares were down $1.18 to $12.75 on news that chief operating officer, Tom Rutledge, plans to resign this month. The company didn't provide a reason for his departure. Rutledge has long been seen as a potential CEO of another cable or satellite operator.

Cameron International,maker of the unfortunate blowout preventer that failed in the 2010 BP oil spill, jumped $2.69 to $47.55 after agreeing to pay BP (BP) $250 million. With the deal, Cameron is not responsible for further cleanup costs from the nation's worst offshore oil spill. BP was unchanged at $41.39.

Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0300%

0.110%

200.00%

-75.00%
5-year Treasury note 

0.814%

0.854%

-14.50%

-59.62%
10-year Treasury note

1.854%

1.913%

-10.35%

-43.90%
30-year Treasury bond

2.855%

2.926%

-6.76%

-34.55%
Currencies











U.S. Dollar Index

80.249

80.341

2.24%

1.21%
British pound

1.5588

1.5588

-0.61%

-0.11%
(in U.S. $)











U.S. $ in pounds

£0.642

£0.642

0.61%

0.11%
Euro in dollars

$1.3043

$1.3018

-2.96%

-2.52%
(in U.S. $)











U.S. $ in euros

€ 0.759

€ 0.759

1.96%

1.50%
U.S. $ in yen 

78.06

77.95

0.31%

-4.06%
U.S. $ in Chinese

6.39

6.36

-0.07%

-3.47%
yuan











Canada dollar

$0.974

$0.000

-0.75%

-2.95%
(in U.S. $)











U.S. dollar 

$1.028

$1.027

0.74%

3.03%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,597.90

$1,577.20

-8.71%

12.42%
(per troy ounce)











Copper (-HG)

$3.331

$3.267

-6.84%

-25.10%
(per pound)











Silver (-SI)

$29.6710

$29.2740

-9.55%

-4.09%
(per troy ounce)











Wheat (-ZW)

$5.8375

$5.7925

-4.93%

-26.50%
(per bushel)











Corn (-ZC)

$5.8300

$5.79

-4.11%

-6.35%
(per bushel)











Cotton 

$0.8593

0.8586

-5.48%

-40.66%
(per pound)











Coffee

$2.1510

2.1775

-9.20%

-10.56%
(per pound)











Crude oil (-CL)

$93.53

$93.87

-6.81%

2.35%
(per barrel)










 

60Comments
Dec 16, 2011 3:31PM
avatar
No disrespect but this is all BS. I don't understand why articles like this and/or EOD reports post things like
Stocks Soar on News of Economic Repair!
Stocks Fall on News of European Blah Blah!
Stocks Rise on the Fact it's a Sunny Day!
The market has nothing to do with economics or politics. Not anymore, and the sooner the majority of press understands that, the better.
We need reports on the logic behind black box algo's. Not opinions on make believe fundamentals.
Dec 16, 2011 5:11PM
avatar
It's all about excessive spending by most countries in the world - including us.  Regardless of your party affiliation do not vote for an incumbant in our next election. 
Dec 16, 2011 3:09PM
avatar

If Congress can't function, then the Government shuts down and we get the biggest

tax break in history. Since there are no Government offices to send taxes to, then

companies would not have any other choice to let employees keep their tax

money for the Holiday season. No government, no tax revenues.

Congress should be a little nervous about that ! There are some rewards for

our representatives'  inadequacies!

Dec 16, 2011 4:34PM
avatar

"Meanwhile, Fitch Investors said it may downgrade the debt of six European countries -- Italy, Spain, Ireland, Belgium, Slovenia and Cyprus. After last week's European Union summit, The ratings firm said it "has concluded that a 'comprehensive solution' to the eurozone crisis is technically and politically beyond reach."

 

I can't believe it......a financial investment firm actually acknowledging that "a comprehensive solution to the eurozone crisis is technically and politically beyond reach".  Funny though...there is no negative market reaction to this statement.  Gee...I wonder why????


Dec 16, 2011 4:17PM
avatar
Enough with the "European Fears" every time the market drops a few points.
Dec 16, 2011 5:33PM
avatar
Congressman Barney Frank may not have succeeded, but he did quite well personally. Unusually, Mr. Frank’s personal finances sailed right through the downturn. In 2006 he reported assets valued between $525,020 and $1.6 million; by 2010 Mr. Franks’ net worth had soared to between $1.9 million and $4.6 million, with nary a down year in between. 
Dec 16, 2011 2:30PM
avatar
Oh well, Europe again. While the rest of the world treads water trying to hold it together, Europe keeps sinking. Come on guys, its bad enough here. We need Europe to show a glimmer of hope soon, or its gonna be curtain time again.Angry
Dec 16, 2011 3:19PM
avatar

start with a topic (payroll tax extension) and add your pet spending projects to it.  BOTH parties love doing this.  DOD gets 1% more of a budget ("smallest hike in recent memory").  africa (where'd THAT topic come from?!?!?!?!) gets AIDS assistance and food.....

 

and we wonder why the deficit goes up and up thru ALL administrations! 

 

WASHINGTON (AP) — The House has passed a $1 trillion-plus catchall budget bill paying for day-to-day budgets of 10 Cabinet departments and averting a government shutdown.
The 296-121vote to approve the measure represented a rare moment of bipartisanship in a polarized Capitol. Lawmakers are also seeking compromise on separate legislation to renew jobless benefits and a cut in payroll taxes.
The bill trims most domestic agencies and awards the Pentagon the smallest budget hike in recent memory. It pays for overseas military operations and a slew of programs ranging from border security to flood control to combating AIDS and famine in Africa.
Dec 16, 2011 4:04PM
avatar

Somebody is making money, it just isn't me.  At least at a Casino, you get free drinks and a glitsy atmosphere.

Dec 16, 2011 3:50PM
avatar
Do you think anything will change with how limp the American public is just to elect someone to the White House no matter what?
Our country had BALLS at one time and people walked the talk but that today is gone and that is why we have these self servicing IDIOTS in office just ripping this country apart!
I am not even thinking about this next election, Good Luck America!
Dec 16, 2011 3:23PM
avatar
Nurse small gains out of the market??? We have not had a gain in months!!!!
Dec 16, 2011 4:51PM
avatar
Close to 1000 point money loss week again!! We are revisting 2008 money losses again.
Dec 16, 2011 4:20PM
avatar

"never leave a dog to gaurd the food"

I am suprised the Stock Market lost money today... it is payday and all the money from everyones 401k's should have boosted the market! ust another way to steal your 401 k money.... LMAO to trust these greedy dogs with your money. Grandpa always told me "never leave a dog to gaurd the food"

Dec 16, 2011 4:11PM
avatar
So what is the answer? Print more money create more debt and pass it off on the people! Remove bank debt and place that debt on our grandchildren. Allow Corporations to keep all their money and ours with no returns on our money!? Can't wait for 12/21/2012 hope it is the beginning!
Dec 16, 2011 6:21PM
avatar

Democrats beating up on  Romney for not knowing anything about Medicaid "Before" he went into government holds as much weight as when our speaker of the house "Nancy Pelosi" said that "we have to pass this health care bill so we can find out what's inside".

Dec 16, 2011 3:11PM
avatar
Can somebody please tell S&P to shut up.  Every time thet open their mouths & say the obvious bad things happen to the market.  I'm not saying they are trying to manipulate the market but....look at the record.
Dec 17, 2011 12:02AM
avatar
The investors in the stock markets can not find any new suckers. Their money is tied up in all the previous bad market investments and Hype of the new IPO's like Zynga..GM...etc..Watch for Facebook IPO to do the same to investers  after the hype is over. Look for the next hint of the resession to hit next week when the store report disappointing sales. Thet after markets have not priced in a recession but the market will price it in very soon when all the lay off's start in Q1. Look for the markets to drop 600 points in three days and The media analyst calls it as a buying opportunity.....Get out of the Stock Market while you have something left..!!!!
Dec 16, 2011 7:41PM
avatar
its nice to see the oil speculators aka greedy bastards take a hit for a change they have had oil at 40% above supply demand for over a year and have raped the economy of billions and billions causing much pain in america
Dec 16, 2011 6:57PM
avatar
AirplaneOn another note, Yacht sales have held steady at a 5% increase each year throughout the Great Bush Recession, I guess someone forgot to tell the top 1% how bad things are.AutoIsland with a palm tree
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