Dow off 50 as slowing economy hits retail sales

Retail sales fall for the third straight month, with weakness in building materials, sporting goods and furniture sales. Citigroup's earnings cheer. Intel and GE estimates are cut. Google's Marissa Mayer is Yahoo's next CEO.

By Charley Blaine Jul 16, 2012 12:53PM
Charley BlaineUpdated: 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.

Article continues below.
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)










 
142Comments
Jul 16, 2012 1:31PM
avatar
April, May, June,  retail sales down.   The people in the U.S. know they have little or no money. Only obame and politicians' think everything is well.
Jul 16, 2012 1:43PM
avatar
It's all Bush's fault, just ask Obama.
Jul 16, 2012 2:41PM
avatar
So let's get this straight. Obama lectures the SCOTUS on overturning laws passed by Congress, but it's OK for the KING to wipe out welfare reform that congress and President Clinton passed overwhelmingly.

Does this guys ego have no bounds?

Why is he so gungho on getting as many people as he possible can on the gov't teat? 

He also by-passed Congress by not defending the DOMA, not enforcing the immigration laws, etc.
Jul 16, 2012 2:28PM
avatar

We have spent Billions on NASA....And so far we have some Moon Rocks and maybe a flag flying on it's surface???

 

That's not at all true. Think of all the technology that was born in the space program that we use daily lives. Think of the satellites...GPS, Television, Weather, etc, etc. The composite materials, the electronics...the space program has had a much more profound affect on our lives than most people give credit.

Jul 16, 2012 3:30PM
avatar

This pretty much sums it up.

 

 



A little boy goes to his dad and asks, 'What is Politics?'

Dad says, 'Well son, let me try to explain it this way:

I am the head of the family, so call me The
President.

Your mother is the administrator of the money; so, We call her the
Government.

We are here to take care of your needs, so we will call you
The People .


The nanny, we will consider her the
Working Class.

And your baby brother, we will call him the
Future.

Now think about that and see if it makes sense.'

So the little boy goes off to bed thinking about what Dad has said.

Later that night, he hears his baby brother crying, so he gets up to check on him.

He finds that the baby has severely Soiled his diaper.

So the little boy goes to his parent's room and finds his mother asleep.
Not wanting to wake her, he goes to the nanny's room Finding the door locked, he peeks in the keyhole and sees his father in bed with the nanny.
He gives up and goes back to bed.

The next morning, the little boy say's to his father, 'Dad, I think I understand the concept of politics now.'

The father says, 'Good, son, tell me in your own words what you think politics is all about.'

The little boy replies,

'The President is screwing the Working Class while the Government is sound asleep.
The People are being ignored and the
Future is in deep dodo.

 

And that my friends sums up our political situation today.  We are all in deep

dodo, not just the future.

 

 

 

 

 

 

 

 

 

 

 

 

 

Subject: Fw: Fwd: YEP!

 

Jul 16, 2012 1:50PM
avatar
Join with me in offering up a prayer to the financial gods that Bernake does NOTHING to stimulate the economy (i.e. stock prices).  This is all someone else's money and it has to be repaid.  Oh, and the someone else.....is US!
Jul 16, 2012 1:02PM
avatar
But Wait the Banks did so well on Friday how could this happen The Federal Reserve Banking Cartel needs to do something about this JP Morgan start fixing the Market like you do the silver Market and the Dow will be at 20,000...now the markets are going to put this fake economy back down and then at the end of the week Wall Street will rig it back up.
Jul 16, 2012 2:38PM
avatar
Big Headlines,: Crude Oil Closes Above $88 Dollars a Barrel." Why are the Speculators bringing oil prices back up? There are no basic fundamentals out there other than Greed to support high oil prices right now. These people are using the Iran Oil Embargo as a personal weapon to raise oil prices back up and this is not right. The SEC should be looking into this. When is Congress going to wake up and clamp down on excessive speculation in oil futures trading? Make these clowns take full physical inventory of all of the futures that they are buying and never see. We are on our way to $4 plus gas prices again and whether you believe it or not it is coming to a station near you.
Jul 16, 2012 2:37PM
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Stocks fall back, stocks plummet, stocks recover, stocks down 200. LOL What does that tell you about Obama's economy? Recovery?  I THINK NOT!!
Jul 16, 2012 4:02PM
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I am seriously concerned about another four years of Obama and I certainly don't think Romney is the best thing since sliced bread either. I could probably pick two names at random out of the phone book and get better results. Unfortunately, we are going to be stuck with one of them come November. The mentality of voting for the best of two evils, in my opinion, is what has gotten us in the mess we're in now. Regardless, I urge everyone to get out and exercise their right to vote. We may not have that right much longer.
Jul 16, 2012 4:44PM
avatar
Keep on playing your BS Manipulation Games with raising oil back up Speculators and see where it gets you. Sooner or later Congress is going to get fed up with your Greed and pass regulations to limit excessive speculation in oil trading futures. This is long overdue as these people need to be made to take full physical delivery of all of the millions of futures that they are buying ahead and never have to see or deal with them. The Iran Oil embargo was not designed as a personal tool for speculators to use to raise prices back up again. The SEC should be looking into this. There is nothing in our current economy to support oil prices going back up right now.
Jul 16, 2012 3:34PM
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I noticed that Since gas and oil dropped that the people THOUGHT that they were going to take a vacation, but the vultures jumped in and raised it back up by being greedy and now everyone is going to vacation around close to home. Its your loss vultures and its your baby you rock it. Don't go crying to the feds for bailout. Suck it up babies.
Jul 16, 2012 4:27PM
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Let's see..... Companies are not hiring or increasing wages because demand is low. Demand is low because people are out of work or money is tight. People are out of work or tight on money because companies are not hiring or increasing wages. Companies are not hiring or increasing wages because demand is low. Demand is low because.......What a vicious little circle. (that and the fact more and more jobs are going overseas) Maybe the whole "EUROPEAN CRISIS"  will make some of these companies think twice about moving operations to a foreign region with foreign governments (but I doubt it).
Jul 16, 2012 4:51PM
avatar
The people that can help with the OIL MANIPULATION are in on it. All this IRAN crap is just a ploy to be used as an ace in the hole when all else fails. Easy to MANIPULATE. You can bet politicians and big oil are all in bed with Iran!! Tell me one thing that can make anyone believe ANY US POLITICIAN!!!
Jul 16, 2012 2:55PM
avatar
ummm   Television was not a result of NASA...  Neither was GPS...

NASA was not a good "investment".    The Internet would have come about regardless of the military (Al Gore did not invent it, contrary to democrat dogma).  Interstate highways is one area where government can play a role.  Bridges and dam projects as well.   This is where "57 States" went wrong.  Almost NO new infrastucture projects with his stimulus spending.  

Government spending produces far less results than private sector sector spending.  This is the primary reason not to seize money from the private sector to fund the government sector.  
Jul 16, 2012 2:10PM
avatar
this is all b.s. the markets was up friday , they are trying to hide more of the bad loans an the jobs what jobs , all the signs i seen in the last week are the going out of business signs  an emity store fronts , so someone is lieing some where , is it the business owners or the stock market , an or the banks , an yes where is all the money that our government  bailed out the banks for the housing market an bad loans  what is it ???? , we should ask the banks ???, jp morgan bank should not have any losses  because of the bail out no bank should , if they do  some one is lieing on the books  , as for the econmony the whole world is down , no money no job , no home , next year higher food prices , it never ends , when are they going to tell us really whats going on ???  an get jobs in this country an keep them here
Jul 16, 2012 4:52PM
avatar

Poor retail people have been hurting a lot.  The only reason people are purchasing things is because they need them.  I would hate to have to keep paying rent each month and not have any customers. 

 

They say Texas is doing better then most other places, but I can tell you that I have seen a lot of places close their doors just in the last couple of months. 

 

As for the stock market - It's a joke!  I had invested in it for the past 35 years, but I stopped a year ago because I sew the Feds, buffet and other are just playing the market to keep it from dropping to much.  If it was not for them this market would be in the 7,000 range by now. 

Jul 16, 2012 1:27PM
avatar
Yes the banks are hording money due to the new regulations and they are getting big bucks from all the new fees. The Market is priced correctly right now about 14x earnings. 

Jul 16, 2012 6:52PM
avatar
Retail Sales are falling. Maybe people have decided to buy what they need instead of what they want or what their neighbors have. Saving the rest for a real emergency.  I don't give a hoot about Citicorp's profits and neither does anyone else except Citicorp employees and shareholders. The earlier poster is correct in that an economy that depends of consumer spending is in trouble. Bring back American jobs.
Jul 16, 2012 3:29PM
avatar
I know, I know, preaching to the choir here...but this is just the beginning, the US market is being held at this number intentionally, (and artificially) just wait until maobama gets re elected, we are going to have peeps jumping out of every window in NY and a quite a few more locations  it is all part of "the plan"   the US will be a bona fide third world country a year after maobama get re elected, you financial types should be spreading the word, I went all cash a few  months ago, just sitting here wating for Nov
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