Dow off 50 as slowing economy hits retail sales

Updated: 7:51 p.m. ET

Stocks drooped today after the government reported the third straight monthly decline in U.S. retail sales.

But the market finished off its lows in part because of a better-than-expected​ report on manufacturing in the New York area and reasonably good earnings from Citigroup (C), whose shares were up 16 cents to $26.81.

Retail sales fell 0.5% in June, said the Commerce Department, which revised its estimates for April and May retail sales lower as well. Some of the sales declines were good news -- retail gasoline sales were off 1.8% thanks to falling prices. But there were more disturbing declines in retail electronics (down 0.8%), building materials (1.6%), sporting goods  (1.6%), furniture sales (0.8%) and department stores (0.2%).

The report was disappointing enough that many economists trimmed their estimates for second-quarter growth to an annualized 1%, compared with 2.5% in the first quarter. It may give Federal Reserve Chairman Ben Bernanke the opportunity to suggest what the Fed might do to stimulate the economy in the months ahead when he testifies before Congress on Tuesday and Wednesday.

The Dow Jones industrials ($INDU) closed down 50 points to 12,727; the blue chips had been down as many as 87 points. The Standard & Poor's 500 Index ($INX) was off 3 points to 1,354, and the Nasdaq Composite Index ($COMPX) was down 12 points to 2,897.
The Nasdaq-100 Index ($INX) was off 8 points to 2,577. Apple (AAPL), the biggest influence on the index, closed up $1.94 to $606.61. The shares had been as high as $611.62.

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The Dow and S&P 500 finished last week with small gains, helped by Friday's rally that saw the Dow shoot up 204 points.

Bernanke's testimony on Tuesday and Wednesday will offer more opportunities for traders to divine if and when the Federal Reserve may start up another stimulus program.

The market slumped last Wednesday when minutes of the Fed's June meeting offered no hints a program was coming. In fact, there was enough ambiguity in the minutes that those want another stimulus plan and those who oppose the idea could argue their side would prevail.

Futures trading suggested a flat open for U.S. stocks.

Yahoo hires Google's Marissa Mayer
As the market closed, The New York Times and CNBC reported that Yahoo (YHOO) was naming Marissa Mayer as its new CEO. Mayer, who has been head of Google's local services operations, had been one of the company's most visible executives and was Google's 20th hire.

Her taking the job makes her instantly one of the most powerful women in technology along with Hewlett-Packard CEO (HPQ) Meg Whitman and Sheryl Sandberg, chief operating officer of Facebook (FB).

The decision was a shock. Most Yahoo watchers had expected interim CEO Ross Levinsohn to get the job. His status with the company was not clear. Moreover, Mayer will be taking over the job while pregnant. She and and her husband, Zachary Bogue, a financier, are expecting a boy in October.

Yahoo was up 36 cents after hours to $16.01 after falling 9 cents to $15.65 in regular trading. Google was off $2.82 to $572.10 after hours. It had closed down $1.60 to $574.92.

Crude oil moves higher
Crude oil (-CL) in New York settled up $1.33 to $88.43 a barrel. Brent crude added $1.18 to $103.58 a barrel.

The national average price of gasoline was $3.396 a gallon today, unchanged from Sunday and up 1.3% this month, according to AAA's Daily Fuel Gauge Report.

Gold (-GC) settled down 40 cents to $1,591.60 an ounce. Interest rates were higher, with the 10-year Treasury yield rising to 1.461% from 1.499% on Friday. The dollar was lower against the British pound and yen but higher against the euro.

Corn (-ZC) and wheat (-ZW) prices jumped again on worries about drought in the Midwest and elsewhere. Corn settled at $7.72 a bushel, up 32.25 cents from Friday. Wheat was up 36.75 cents a bushel to $8.85.

Corn is up 19.5% this year -- 21.7% just this month. Wheat is up 35.5% for the year and 16.8% this year.

Energy prices -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Crude oil (-CL)			$88.43			$87.10			4.08%			-10.52%
(per barrel)
Heating oil (-HO)			$2.8277			$2.7882			4.35%			-2.97%
(per gallon)
Natural gas (-NG)			$2.8010			$2.8740			-0.81%			-6.29%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.8547			$2.8161			8.47%			7.42%
(per gallon)
Brent crude			$103.37			$101.42			5.70%			-3.73%
(per barrel)
Retail gasoline			$3.3960			$3.3960			1.28%			3.66%
(per gallon; AAA)

Citigroup is slowly mending
The Citigroup report was encouraging. The bank said it earned $2.946 billion, or 95 cents a share, in the second quarter, down $3.34 billion, or $1.04 a share, from a year ago.

The results included a $424 million loss from the sale of a 10.1% stake in Akbank TAS of Turkey and a $219 million gain from changes in the market value of its own debt and that of some of its trading partners.

Excluding the debt accounting adjustments and the Turkish bank stake sale, earnings were $1 a share, and net income was 1% lower than a year earlier.

Citigroup is still feeling pain from Citi Holdings, a unit set up in 2009 to house assets and businesses it was looking to shed as the 2007-08 credit crunch forced multiple U.S. government rescues.

Citi Holdings' losses widened to $920 million in the second quarter from $661 million in the same period a year earlier.

What cheered investors was that the company is able to cut a lot of expenses. At its investment bank, profit grew to $1.28 billion in part because its costs were trimmed by $322 million. 

A big week for earnings

Citigroup's results are part of a big week in earnings, particularly financial earnings.

Among reports due this week: 

• Tuesday: Goldman Sachs (GS), Intel (INTC) and Coca-Cola (KO).
• Wednesday: Bank of America (BAC), IBM (IBM), Northern Trust (NTRC) and U.S. Bancorp (USB).
• Thursday: Morgan Stanley (MS), Google (GOOG), Microsoft (MSFT), Sherwin-Williams (SHW) and Freeport-McMoRan Copper & Gold (FCX)
• Friday: General Electric (GE) and Schlumberger (SLB).

The reports may disappoint investors. Sanford C. Bernstein and Williams Financial Group cut their estimates for Intel today, based on reports of weak personal-computer sales.

And FBR Capital Markets and Evercore Partners also cut their estimates for semiconductor earnings generally. 

General Electric fell 18 cents to $19.59 after Morgan Stanley reduced its recommendation on the stock.

Coal-producer Alpha Natural Resources (ANR) declined 78 cents to $6.85 after Bank of Montreal cut its rating, citing potential financing issues.

Some leaders on the day

Human Genome Sciences (HGSI) gained 61 cents to $14.19 on news that GlaxoSmithKline (GSK) will buy the company for $14.25 a share, or about $3.6 billion, including cash and debt.

Par Pharmaceutical (PRX) jumped $13.42 to $50. The company agreed to be bought out by private-equity firm TPG Capital for $1.84 billion.

MasterCard (MA) rose $7.29 to $436.89 and Visa (V) advanced $3.06 to $127.15 after the credit-card companies and some large banks settled a long-running lawsuit by agreeing to pay a number of retailers more than $6 billion. The settlement is under some fire because it will enable retailers to try to charge a few for using debit cards.

Microsoft (MSFT) was up 5 cents to $29.44 after it introduced its new version of its Office suite of programs. The new version of the company's most profitable product is cloud-based and works best on Windows 8, due out this fall. The new Office is designed to work with touch, stylus, mouse or keyboard across new Windows devices, including tablets. (Microsoft is the publisher of MSN Money.)

Not a lot of winners

Only seven of the 30 Dow stocks were higher today, led by Pfizer (PFE) and American Express (AXP). JPMorgan Chase (JPM) and Home Depot (HD) were the laggards.

Fifty-three S&P 500 stocks were higher, led by First Solar (FSLR) and Avon Products (AVP). Alpha Natural Resources and Dean Foods (DF) were the laggards.

Sears Holdings (SHL) and Cognizant Technology (CTSH) were the Nasdaq-100 leaders.  Green Mountain Coffee Roasters (GMCR) and Research In Motion (RIMM) were the laggards. Twenty-nine stocks in the index showed gains.

Short hits from the markets -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0900%			0.090%			12.50%			800.00%
5-year Treasury note			0.595%			0.630%			-18.38%			-28.31%
10-year Treasury note			1.464%			1.499%			-11.75%			-21.75%
30-year Treasury bond			2.548%			2.584%			-7.78%			-11.80%
Currencies
U.S. Dollar Index			83.218			83.474			1.79%			3.35%
British pound			1.5605			1.5588			-0.62%			0.44%
(in U.S. $)
U.S. $ in pounds			£0.641			£0.641			0.63%			-0.44%
Euro in dollars			$1.22			$1.23			-3.15%			-5.65%
(in U.S. $)
U.S. $ in euros			€ 0.818			€ 0.816			3.26%			5.99%
U.S. $ in yen			78.93			79.23			-1.03%			2.37%
U.S. $ in Chinese			6.40			6.38			0.47%			1.21%
yuan
Canada dollar			$0.984			$0.987			0.14%			0.28%
(in U.S. $)
U.S. dollar			$1.017			$1.013			-0.13%			-0.28%
(in Canadian $)
Commodities
Gold (-GC)			$1,591.60			$1,592.00			-0.79%			1.58%
(per troy ounce)
Copper (-HG)			$3.485			$3.504			-0.33%			1.43%
(per pound)
Silver (-SI)			$27.3210			$27.3690			-1.05%			-2.13%
(per troy ounce)
Wheat (-ZW)			$8.8450			$8.4775			16.80%			35.50%
(per bushel)
Corn (-ZC)			$7.7250			$7.403			21.70%			19.49%
(per bushel)
Cotton			$0.7330			0.7266			2.76%			-20.05%
(per pound)
Coffee			$1.8395			1.861			7.76%			-19.90%
(per pound)
Crude oil (-CL)			$88.43			$87.10			4.08%			-10.52%
(per barrel)