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.

By Charley Blaine Nov 2, 2012 12:46PM
Charley BlaineUpdated: 8:03 p.m. ET

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.
Dow Industrials

13,093.16

13,107.21

-0.11%

7.17%
S&P 500

1,414.20

1,411.94

0.16%

12.45%
Nasdaq 

2,982.13

2,987.95

-0.19%

14.47%
Russell 2000

814.37

813.25

0.14%

9.91%
Crude oil 

$84.86

$86.28

-1.65%

-14.14%
(per barrel)

0.00

0.00

0.00%

0.00%
U.S. Dollar Index 

80.68

80.16

0.66%

0.20%
10-yr. Treasury

1.73%

1.75%

-1.37%

-7.75%
Gold

$1,675.20

1,711.90

-2.14%

6.92%

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%
(per barrel)











Heating oil (-HO)

$2.9474

$3.0332

-3.75%

1.14%
(per gallon)











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)











Brent crude 

$105.68

$108.17

-3.53%

-1.58%
(per barrel)











Retail gasoline

$3.4960

$3.5070

-0.71%

6.72%
(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%.


The company's strong performance helped shares of Whole Foods (WFM) move up $2.69 to $97.15. Rivals Dunkin Brands (DNKN) and Caribou Coffee (CBOU) were also higher. Panera Bread (PNRA) fell slightly.


Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











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%
Currencies











U.S. Dollar Index

80.683

80.136

0.87%

0.20%
British pound

1.6028

1.6132

-0.67%

3.16%
(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%
yuan











Canada dollar

$1.005

$1.004

0.46%

2.43%
(in U.S. $)

 








U.S. dollar 

$0.996

$0.996

-0.39%

-2.38%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,675.20

$1,715.500

-2.55%

6.92%
(per troy ounce)

 








Copper (-HG)

$3.482

$3.552

-1.02%

1.32%
(per pound)

 








Silver (-SI)

$30.857

$32.248

-4.51%

10.54%
(per troy ounce)

 








Wheat (-ZW)

$8.6450

$8.685

0.00%

32.44%
(per bushel)

 








Corn (-ZC)

$7.3950

$7.510

-2.15%

14.39%
(per bushel)

 








Cotton 

$0.7035

$0.702

0.40%

-23.27%
(per pound)

 








Coffee

$1.5470

$1.535

0.03%

-32.64%
(per pound)

 








Crude oil (-CL)

$84.86

$87.090

-1.60%

-14.14%
(per barrel)










 

696Comments
Nov 2, 2012 3:08PM
avatar
Thank Christ not Obama for jobs. Temporary part-time retail jobs spike in the fourth quarter. Who gets the credit when the jobs are lost in January? 
Nov 2, 2012 3:08PM
avatar
I would laugh it were not so serious. MSNBC saying this is good news? UE goes up , but it is good news jobwise? So last month when it went down it was bad news!? Whatever happened to journalistic integrity?
Nov 2, 2012 3:06PM
avatar

Let's see....

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??

Nov 2, 2012 3:06PM
avatar
The true unemployment rate, the U6 rate, is almost 15% and that includes those who have stopped looking for work and those whose unemployment benefits have run out.  The only fools who are going to vote for Obama are those that bought the "Hope and Change" Elixir that Barry was peddling back in 2008 and are now purchasing the new and improved  "Forward" formula from the re-branded wagon that the libs are dragging through town.  Just how stupid are some of these folks?
Nov 2, 2012 3:03PM
avatar

Boy, that ROVE money is lighting up the board here today folks!

Do you guys get paid by the post or by the word??

Nov 2, 2012 2:59PM
avatar
These articles are a real joke and a cover for the big boys on Wall St. Yesterday the big boys ran the market up nicely. Why? Because they knew a lot of people were short from the prior sessions and they knew where the buys stops were placed and they knew who would be forced out on margin and they had the money to set off the buy stops. The funds also had a lot of money to invest because it was the first day of the month. Yesterday's headlines supported a rally and a continuance of the rally. Today's numbers supported a rally. But look at what happened.

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).

Nov 2, 2012 2:58PM
avatar
I just went to the doctor for my yearly check-up. I told my doctor I got a new policy and it was hard to understand. Her comment was, wait until next year it gets' worse. The obama care goes into effect.
Nov 2, 2012 2:58PM
avatar

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..??

Nov 2, 2012 2:54PM
avatar
So the whole market panics because of Chevron and Apple?  Didn't this happen 2 weeks ago?????  Seems more like a profit taking day to me and yet Wall Street and MSN will never admit it until after 4:00.  Wall Street is so pathetic it's not even funny!
Nov 2, 2012 2:53PM
avatar
The only statistic that should count is the percentage of available workforce actually employed on a fulltime basis.
Nov 2, 2012 2:50PM
avatar
Look, I will simplify it for those that give a darn.  He never had the credentials for being in office other other than rhetoric and hope and all that nonsense.  You see it, now. He is doing exactly the same thing relying on the same demographics that he did before.  It is "wefare" and it is government checks which he does not even understand the machination of. You really believe that?  He is arrogantt and narcissistic and appeals to those that he knows he will win over. Figure how 95% still will vote for him?;  The black vote is historicall black....so he goess where knowing this crap with helping them.  He could care less.  He is in his own world.....black and white. 
Nov 2, 2012 2:46PM
avatar

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...

Nov 2, 2012 2:42PM
avatar
Only a Leftist would see an increase of the unemploiyment rate as a win for Liberalism.  Gotta love 'em!
Nov 2, 2012 2:40PM
avatar
Every four years the Republican candidate titillates the ears of the weak minded by promising to shrink government, but you'll have to go all the way back to Tricky Dick to find a Republican that actually did it. Obama is growing government 5 times slower than Bush or Reagan did, if you are a true Financial Conservative, Obama's the obvious choice, or you can get socket in the jaw again by the GOP.
Nov 2, 2012 2:33PM
avatar
No matter who is elected or re elected president the next two years will include distractions due to the Benghazi fiasco. Once the investigations are completed which will probably be after the election the truth will come out as to the failures of the Obama administration to respond properly and the resulting cover up. Whether Obama is re elected or not his reputation will be on the line. If Romney is elected he will also be distracted by the BS of the resulting investigation. Not a good thing to look forward to.    
Nov 2, 2012 2:32PM
avatar
Perhaps if Wall Street traders were paid by how many 'GOOD' trades they made as oppose to the sheer number of trades they made, America would see a more productive market instead of one that fluctuates constantly.  When it doesn't matter how a stock is doing or where a company is going - the handlers only concern is moving one commodity from one set of hands to another - no consistency can be achieved - just product movement.
Nov 2, 2012 2:30PM
avatar
Obama probably better hope he gets voted out, or he may end up getting dragged out in cuffs when it's all said and done!
Nov 2, 2012 2:29PM
avatar
As the retailers said - they will be adding 300k+ holiday workers.

I hear that 2 states are missing this time from the unemployment numbers - Is that true?
Nov 2, 2012 2:28PM
avatar
MisterKyte
ABC and CBS have both started OUTING Obama over the Benghazi Clusterphuk.
--------------------------------------------
 
Anybody ever notice that MisterKyte's post are always a noun, a verb and Benghazi...
Nov 2, 2012 2:28PM
avatar
LMFAO!!!!

Always railing on Fox News for reporting on Benghazi! 

Then you vote thumbs down when the  two articles I posted, came from your Beloved LEFT WING Mainstream Media Outlets ABC and CBS!

Don't care much for the facts coming out before the election, no matter where they come from huh?


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