Dow falls 139 despite improved jobs picture
A rising dollar, weak Chevron earnings and stress on Apple shares slam stocks. The national unemployment rate ticks up to 7.9% as more people look for work. Oil and gold sag. Starbucks jumps nearly 10%. Restoration Hardware soars after its IPO.
Employers added 171,000 jobs in October, but the unemployment rate ticked up slightly to 7.9%, the Labor Department announced today.
While the jobs report was basically good, stocks slumped this afternoon on weakness in Chevron (CVX), Apple (AAPL) and IBM (IBM) and a host of property-casualty companies that face big claims from Superstorm Sandy.
In addition, the dollar moved higher on the jobs report, as traders worried that the Federal Reserve might pull back on its low-interest rate policy. Energy and materials stocks were lower. Gold (-GC) fell below $1,700 for the first time since early September.
The losses wiped out weekly gains for the Dow Jones industrials ($INDU) and the Nasdaq Composite Index ($COMPX).
The Dow closed down 139 points to 13,093. The blue chips had been up as many as 57 points early in the session. Today's decline more than undid Thursday's 136-point gain. The Standard & Poor's 500 Index ($INX) was off 13 points to 1,414. The Nasdaq dropped 38 points to 2,982.
Article continues below.The Nasdaq-100 Index ($NDX) was off 31 points to 2,656.
Apple was off $19.74 to $576.80. The new iPad Mini went on sale today. The selling in the shares accelerated after they fell below $588, their 200-day moving average. Apple is down 18% since peaking in mid-September at $702.10, though it is still up 42.4% for the year.
About 77 points of the Dow's loss was concentrated in four stocks: IBM, Chevron, Caterpillar (CAT) and Exxon Mobil (XOM). Only four of the 30 Dow stock were higher: Bank of America (BAC), Walt Disney (DIS), Merck (MRK) and McDonald's (MCD).
In addition, Verizon Communications (VZ) fell 62 cents to $44.52 after it said in a regulatory filing that it expects the costs of restoring service and making extensive repairs to its land and mobile networks after Superstorm Sandy will have a "significant" impact on fourth-quarter results.
For the week, the Dow was off 0.1%, its third loss in the last four weeks. The S&P 500 added 0.2%. The Nasdaq dropped 0.2%, its fourth straight weekly decline. For the year, the Dow is up 7.1%, with the S&P 500 up 9.6% and the Nasdaq up 14.5%.
|Markets for the week|
|11/2/2012||10/26/2012||% chg.||YTD chg.|
|U.S. Dollar Index||80.68||80.16||0.66%||0.20%|
A solid jobs report
The jobs report was solid, if not spectacular. It is the last big economic report before Tuesday's presidential election.
Most pollsters say the result is too close to call, although Intrade, the online betting site, put the odds of a win for President Barack Obama at roughly 66.8%, up slightly from Thursday. Mitt Romney's odds were 33.3%, down from 34% on Thursday.
In addition to the 171,000 overall gain in jobs, the Labor Department revised estimates for overall job gains in August and September higher by 84,000.
The payroll gains came from the private sector, which added 184,000 jobs, the Bureau of Labor Statistics said. That was the biggest gain since February. Government employment fell by 13,000.
The unemployment rate ticked up to 7.9% from September's 7.8% because more people were looking for work.
Private service providing jobs were up 163,000, with retail trade adding 36,400 jobs.
Temporary-help services, often a harbinger of future full-time hiring, added 13,600 jobs, more than reversing the previous month's decline.
The construction sector saw an increase of 17,000 jobs, the largest rise since January. But residential construction fell back by 2,000 jobs to 560,000. That reflects the struggles of the housing industry.
Despite the current uptick in job creation, the U.S. economy faces a real threat of a renewed recession next year.
Without action by lawmakers, existing legislation will raise taxes and cut spending to the tune of about $600 billion in 2013. That scenario -- known in Washington as the fiscal cliff -- could easily cause the economy to contract.
Crude oil, gold take a tumble
Crude oil (-CL) in New York settled down $2.23 to $84.86 a barrel, the lowest close since July 10. Wholesale gasoline futures (-RB) were down 2.3% to $2.5736 a gallon. Brent crude dropped $2.49 to $105.68. .
The national average price of gasoline was at $3.496 a gallon, according to AAA's Daily Fuel Gauge Report, down from Thursday's $3.507. That's the lowest average price since July 30, when it was $3.486.
Gold tumbled $1,675.20 an ounce in New York, down $40.30. It was the biggest one-day drop for the metal since June 21 and the lowest close since Aug. 30.
|Energy prices -- New York close|
|Fri.||Thur.||Month chg.||YTD chg.|
|Crude oil (-CL)||$84.86||$87.09||-1.60%||-14.14%|
|Heating oil (-HO)||$2.9474||$3.0332||-3.75%||1.14%|
|Natural gas (-NG)||$3.5540||$3.6990||-3.74%||18.90%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.5736||$2.6336||-2.16%||-3.15%|
|(per gallon; AAA)|
Restoration Hardware has a strong IPO
Despite the slump, home-furnishings retailer Restoration Hardware (RH) went public at $24 late Thursday and closed at $31.10, up $7.10. It reached as high as $33.15.
Starbucks (SBUX) shares jumped $4.22 to $50.84 after reporting strong earnings late Thursday and boosting its dividend to 21 cents a share, up from 17 cents.
The market's response today was a disappointment after Thursday's rally, which saw the Dow jump 136 points in the market's best performance since September.
Why Chevron missed
The oil giant missed Street estimates on earnings and revenues, blaming lower crude prices and a heavy period of planned oilfield maintenance. Shares were down $3.09 to $108.37.
Worldwide daily production was 2.52 million barrels of oil equivalent, down from 2. 6 million a day a year ago. Plus, the average sales price of crude oil and natural gas liquids was $91 vs. $97 a year ago.
Downstream operations earned $456 million, down from $704 million a year ago.
Starbucks' strong report
Starbucks shares jumped because global comparable-store sales rose 6%, with a 5% increase in traffic and a 1% increase in average ticket contributing.
The company saw 10% growth in its China/Asia Pacific business. Europe lagged. The company grew its operating margin by 210 basis points (one basis is one one-hundredth of a percentage point) to 21.4% from 21.19%.
|Short hits from the markets -- New York close|
|Fri.||Thur.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0900%||0.090%||-18.18%||800.00%|
|5-year Treasury note||0.728%||0.728%||1.82%||-12.29%|
|10-year Treasury note||1.726%||1.715%||2.37%||-7.75%|
|30-year Treasury bond||2.917%||2.897%||2.31%||0.97%|
|U.S. Dollar Index||80.683||80.136||0.87%||0.20%|
|(in U.S. $)|
|U.S. $ in pounds||£0.624||£0.620||0.68%||-3.06%|
|Euro in dollars||$1.28||$1.29||-0.98%||-0.94%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.779||€ 0.773||0.99%||0.95%|
|U.S. $ in yen||80.58||80.15||0.98%||4.51%|
|U.S. $ in Chinese||6.27||6.24||0.52%||-0.95%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$84.86||$87.090||-1.60%||-14.14%|
When Apple was at 630 I said it would go down. ABS and others sh!t on my comments, now at 582.
Oh and it's what 14 times earnings (I believe) so it did not have to come down based on its previous price so don't give me that crap.
We had 1000s dying in 9/11 attacks and crashes..
We had 10s of thousands dying in the Middle East Wars, including 5-6000 of our boys and girls.
We had 100s dying in Katrina.
We probably have over a 100 now dead in Sandy's devastation...
And there are some of you making a big deal out of Benghazi..You have never been to War have you??
Boy, that ROVE money is lighting up the board here today folks!
Do you guys get paid by the post or by the word??
Today the big boys reeled in their profits from running the markets up yesterday and established new short positions at higher level. All that's going on is money chasing money up and money chasing money down. And the big boys are very good at it (that's because they know where the stops are, how much money will be forced out by margin calls, and they have the media in their pockets trying to make reasonable justifications for the market's movements).
MadMadMax...I'm guessing you probably livin' in Philadelphia, Mississippi. OR
maybe even Fayetville, Alabama....?
First off, they ain't kindly to black folk, and they are pretty much all Republican..
And you pretty much just talked to all your friends down at the meetin'
Ya' all called it a Town Hall meetin'......(Sure it was.)
So how do you expect me to believe your POLL of 500 to 3 against Obama..??
CGT1.....You really aren't much help with the "inside track"......
WHEN YOU are always 10-20 minutes late to the BIG DANCE, with the info...
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[BRIEFING.COM] The S&P 500 settled lower by 0.8% after early strength turned into afternoon weakness.
Today's headline event came in the form of Ben Bernanke's testimony before the Joint Economic Committee. During his remarks, Chairman Bernanke said premature tightening of monetary policy could stall the pace of recovery. This followed weeks of conflicting remarks from FOMC members, which sparked speculation regarding possible changes to the Fed's policy course.
However, ... More
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