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 7:06PM
avatar

Less than a week before the presidential election, Christie will host Obama in New Jersey to survey Sandy damage. The governor created a buzz after saying this week that he had no intention of bringing the GOP nominee to the Garden State to survey storm damage first-hand.Folks don’t know the situation here following the storm,” a Christie adviser told POLITICO when asked if the governor is unhappy with the GOP nominee

Christie has been a frequent campaigner and fundraiser for Romney, appearing with him most recently in Ohio. Christie cancelled campaign appearances for Romney in Nevada that had been slated to occur on Tuesday after it was clear the storm was headed to his state.

The governor told Fox News that he has bigger things to worry about than the campaign.

“I have no idea, nor am I the least bit concerned or interested,” he said when asked if Romney would visit. “I’ve got a job to do here in New Jersey that’s much bigger than presidential politics, and I could care less about any of that stuff.”

Nov 2, 2012 7:06PM
avatar

Team Romney Admits “Relief” Event Was Staged for Political Reasons

I also found this part of the story fascinating. The Romney campaign admits that the intent behind the rally was swing state election visibility, not hurricane relief:

But Boston wasn’t quite ready to lose a full day of swing state visibility with a week left in the race. So, after some deliberation, the campaign decided to use their existing venue in Ohio to stage a makeshift, and nonpartisan, humanitarian project. It would be a way for Romney to show leadership — and get on the local news — without looking craven or opportunistic.

They weren’t willing to lose a day’s visibility in a swing state, so they came up with the event and crafted it in a way that would still get them political benefit, but would camouflage the intent.  So, as I predicted, Team Romney saw Hurricane Sandy – saw the imminent peril of tens of millions of Americans – as a political "opportunity" to exploit.

Nov 2, 2012 7:06PM
avatar

To funny as Chris Christie is being interviewed by fox. The question was asked would you allow Romney to tour NJ with you. Just before Christie could answer you could see just under Christie the announcement that Romney would be touring Sandy with Christie. 

 

The funny part is Christe answered by saying

I have no idea, nor am I the least bit concerned or interested,” he said. “I’ve got a job to do here in New Jersey that’s much bigger than Presidential politics, and I could care less about any of that stuff.”

Nov 2, 2012 7:04PM
avatar

I heard today that after Obama left the photo-op with the traitor Chris Crisco, he flew to Lost Vegas and was a Whale on the tables.

 

When asked how he could justify betting billions of taxpayers dollars, he stated that he was planning for a early retirement...yuk yuk.

Nov 2, 2012 7:02PM
avatar
BigDaddy,

Stop watching Boardwalk Empire, it's affecting your knowledge of politics
Nov 2, 2012 6:57PM
avatar
Just as I thought. All of the commentsabout why stocks go up or down must be a lie. Let's see, stocks rise because of a good jobs report - guess not. 
Nov 2, 2012 6:51PM
avatar
Only 4 days til Ol' Leroy and his slime get oozed back to the cesspool of Chicago politics they came from. Then at least we can start to see the Markets and jobs start to build. I've made a lot of money on the crazy swings{timing}but it's time for normalcy.
Nov 2, 2012 6:50PM
avatar

Bloomberg Endorses Obama, Citing Climate Change

 

 

Mr. Bloomberg, a political independent in his third term leading New York City, has been sharply critical of both Mr. Obama, a Democrat, and Mitt Romney, the president’s Republican rival, saying that both men have failed to candidly confront the problems afflicting the nation. But he said he had decided over the past several days that Mr. Obama was the best candidate to tackle the global climate change that the mayor believes contributed to the violent storm, which took the lives of at least 38 New Yorkers and caused billions of dollars in damage.

Nov 2, 2012 6:42PM
avatar

But you forgot to report that 172,000 more jobless claims were (un)reported, hence, the spike in unemployment. Great reporting on your behalf sir.

 

I guess you are voting for O. Good luck with that.

Nov 2, 2012 6:39PM
avatar
At the Cayman Island Summit for U.S. Corporate Tax Cheaters....

George W. Bush gave the Keynote Speech......Reported today that the Speech was Totally closed to all Journalist and conference organizers were banned from discussing any aspect of his speech even in general terms...The restrictions were imposed by the Former Presidents's Staff... I wonder why????? Wow.......I guess any advice on investing in Offshore Tax havens in the Cayman Islands or elsewhere to avoid American Taxes were reserved for the people that paid 4, 000 dollars to attend.........

How could any Average American vote for the current Republican Party.....Seriously !!!!    Wow...They at least use to try to hide their Corruption.....and Cheating...
Nov 2, 2012 6:39PM
avatar
anyone have any idea what will happen if Romney wins?  the white guy beats the black guy.  thats how they will see it and that is not going to be pretty!  will we win either way?  im still voting romney 
Nov 2, 2012 6:31PM
avatar
If any of you Tea Party Patriots are driving to New Jersey or New York this weekend to help fellow Patriots.....They need food, water, gas, batteries and guns. Your help will be appreciated. 
Nov 2, 2012 6:30PM
avatar
MISTERKYTE TAXPAYER  YOU GIRLS ARE REALLY GETTING NERVOUS ,BUT YOU STILL HAVE A FEW DAYS LEFT TO CALL PEOPLE NAMES BEFORE YOU START WEEPING LIKE SCHOOL GIRLS
Nov 2, 2012 6:11PM
avatar
It takes approx 350,000 jobs/month just to keep up with people entering the job market. I'd ask who are these people trying to kid, but we already know.........don't we.
Nov 2, 2012 6:10PM
avatar

royaltoiletflush said:

"A punk- is a person who has a bone to pick with the profit driven world"

 

Ya got that right...i means to do anything possible to sink the corporate thieves (Madoff, Hedge Funds, Broker houses, Bush, Paulsen etc.) and slimeballs who pilfered this once great country.

Nov 2, 2012 5:59PM
avatar
The Mitt Romney CANDIDACY, REPRESENTS the ATTEMPTED TAKEOVER of the FEDERAL GOVERNMENT by CORPORATE AMERICA....

Nov 2, 2012 5:56PM
avatar
November 6th - America's new Independence Day after Romney Wins !
Nov 2, 2012 5:53PM
avatar
Improved Jobs picture ?? MSN must be hitting the LSD again !
Nov 2, 2012 5:52PM
avatar
Its over for investers for the year because Wall street doesnt want to hear good news!!!!
Nov 2, 2012 5:43PM
avatar
Chevron and exxon having profit troubles? They made a fine profit at $1.50 a gallon a few years back. I guess they'll have to double gas prices for a third time in 10 years to satisfy wall street. Now if gas goes below $4 they'll be in front of congress pressing for a bailout, and they'd probably get it.
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