Dow up 143 in another volatile day
The blue chips give up a 260-point gain but stage a big rebound. Lower jobless claims may signal a healthier economy than thought. Germany's parliament agrees to expand Europe's rescue fund. Tiffany, Coach, Apple and Amazon.com stumble.
Stocks mostly finished higher, but what a wacky day!
The Dow Jones industrials ($INDU) shot up 260 points right after the open, gave up all of the gain and then rebounded in the last hour of trading to advance 143 points. The Standard & Poor's 500 Index ($INX) saw a 25-point dissolve into an 11-point loss and then rebound to a 9-point gain.
Technology and consumer discretionary stocks, including Apple (AAPL), Amazon.com (AMZN), Wynn Resorts (WYNN), Tiffany (TIF) and Coach (COH), were the weak links, and they never really recovered.
There may have been no other reason for the Dow and S&P 500 to rebound except short-covering by traders who wanted to lock in their profits after beating the market lower.
The Dow close was a gain of 1.3% to 11,154. The S&P finished with a 0.8% gain to 1,160. The Nasdaq Composite Index ($COMPX) closed down 11 points, or 0.4%, to 2,481. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, fell 23 points, or 1% to 2,198.
Article continues below.After the close, shares of chipmaker Micron Technology (MU) were off 2% to $5.75 after the company reported a fiscal-fourth-quarter loss of 14 cents a share, down from earnings of 32 cents a year ago. Analysts had expected a profit of a penny a share. Revenue was off 14% to $2.14 billion -- but better than the consensus estimate of $2.12 billion.
In addition to the weakness in tech and discretionary stocks, U.S.-traded Chinese stocks sold off heavily after Reuters reported that the Justice Department is investigating accounting fraud and other potential problems among those companies.
While no companies were named in the report, Baidu (BIDU), the big Chinese Internet company, saw its shares fall 9.2% to $110.29. Shares of Youko.com (YOKU), another Internet information company, fell $18.3% to $16.24. New Oriental Education & Technology Group (EDU) fell 11.7% to $24.36.
In addition, worries were building that China's growth won't be as robust over the next five years.
Stocks looking at 5-month losing streak
With today's close, the Dow is off 4% for the month and 10.2% for the quarter. The S&P 500 has fallen 4.8% this month and 12.1% for the quarter, with the Nasdaq off 3.8% for September and 10.6% for the quarter.
The indexes are looking at their fifth straight losing months. Since the market peaked on April 29, the Dow has fallen 12.9%, with the S&P 500 down 14.9% and the Nasdaq down 13.7%.
Futures trading suggests a modestly higher open on Friday.
Jobless claims fall; German parliament approves rescue package
The wild finish came on a day when there was some decent economic news. Initial jobless claims dropped below 400,000 for the first time since early August and to their lowest level since April.
In addition, the government boosted its estimate of second-quarter growth to 1.3% from 1%.
Meanwhile, Germany's parliament easily approved an expansion of the eurozone rescue fund’s firepower, freeing European officials to focus on what next steps may be needed to stem the debt crisis.
Commodities initially rallied on the jobs and European news but also faded.
Copper (-HG) settled down slightly to $3.246 a pound today after plunging on Wednesday. The metal is down 24.2% this quarter alone, and many analysts have worried that it is presaging a possible global economic slowdown. Gold (-GC), meanwhile, dropped 80 cents to $1,617.30 an ounce in New York. Silver (-SI) was up 38.8 cents to $30.52 an ounce.
Crude oil (-CL) was up $1.23 to $82.44 a barrel. Brent crude was up $1.20 to $105.01 a barrel.
|Energy prices -- New York close|
|Thur.||Wed.||Month chg.||YTD chg.|
|Crude oil (-CL)||$82.14||$81.21||-7.51%||-10.11%|
|Heating oil (-HO)||$2.8266||$2.8271||-8.35%||11.12%|
|Natural gas (-NG)||$3.7470||$3.7990||-7.57%||-14.94%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.5586||$2.5753||-11.05%||4.30%|
|(per gallon; AAA)|
Financial stocks see gains
Financial stocks are among the market leaders because of the German parliament vote. JPMorgan Chase (JPM) was up 3% to $31.39 after rising as much as 5.4%. Bank of America (BAC) added 3.1% to $6.35. Citigroup (C) climbed 3.8% to $26.90. Financial Select SPDR (XLF) exchange-traded fund, which tracks the financial sector of the S&P 500, was up 2.8% to $12.24.
Utilities stocks -- prized these days for their dividends -- were the leading S&P 500 sector, and the Dow Jones Utilities Average ($UTIL) rose 1.6% to $438.56.
The laggards were consumer discretionary stocks, partly because of the declines for Amazon.com, Wynn Resorts, Tiffany and Coach. Tiffany was off 6.9% to $64.70. Coach was down 6.1% to $54. Businessweek said the declines were due in part to worries about slower growth in China. Tiffany generates 51% of sales in the Asia-Pacific region; Coach also has a big Asian presence.
Shares of Research In Motion (RIMM) were down 3.4% to $21.16 after Collins Stewart analyst John Vinh commented that he thinks the company has stopped producing its PlayBook tablet device and is looking to exit the tablet market. The company derided the report as "pure fiction," The Wall Street Journal said.
In addition, Netflix (NFLX) was off 11% to $113.19 on reports that Microsoft (MSFT) plans to offer online pay television services from Comcast (CMCSA) and Verizon Communications (VZ) through Xbox Live. (Microsoft is the publisher of MSN Money.)
Twenty-eight of the 30 Dow stocks were higher, led by Travelers Companies (TRV), up 3.2% to $49.69, Bank of America and JPMorgan Chase. Microsoft, down 0.5% to $25.45, and Intel (INTC), down 0.5% to $22.21, were the laggards.
A total 360 S&P 500 stocks were higher, led by Hartford Financial Services (HIG), up 8.2% to $17.11, and Genworth Financial (GNW), up 7.8% to $6. Chipmaker Advanced Micro Devices (AMD) was the laggard, down 13.7% to $5.31 after cutting its third-quarter forecasts for earnings and revenue. The problem, the company said, was manufacturing glitches.
Forty-two Nasdaq-100 stocks were higher, led by Life Technologies (LIFE), up 3.2% to $38.92, and Dutch biotech company Qiagen (QGEN), up 2.6% to $14.47. The index was lower because of the weakness in Apple, Amazon.com, Baidu, Priceline (PCLN), Wynn Resorts and Green Mountain Coffee Roasters (GMCR). That group was responsible for 14 points of the index's 23-point loss by themselves.
Is some improvement coming in jobs?
The number of people filing for unemployment benefits for the first time saw a bigger-than-expected drop in the week ended Sept. 24, falling below the 400,000 level to 391,000. Economists had expected initial claims to drop to 420,000.
But the decline may be technical. Many state unemployment offices along the East Coast had been scrambling to process claims in the first few weeks of September after hurricanes forced office shutdowns.
The improvement in claims came a day after Federal Reserve Chairman Ben Bernanke called the nation's high level of unemployment "a national crisis." "We’ve had close to 10% unemployment now for a number of years," Bernanke said after a Cleveland speech. "Of the people who are unemployed, about 45% have been unemployed for six months or more. This is unheard of."
The jobless-claims report came as the government said second-quarter growth was a touch better than thought. But 1.3% annualized growth is almost like no growth.
Germany agrees to expand Europe's bailout fund
German lawmakers approved today a proposal to expand the European Financial Stability Facility. That eased concerns about recent disagreements on the size of write-downs of private creditors holding Greek bonds.
Leaders in Slovenia and Finland approved the measure earlier in the week. All 17 members of the eurozone must agree to the changes for the proposal to pass.
European stocks moved higher on the vote. Germany's Xetra Dax Index ($DE:DAX) closed up 1.1% to 5,640. France's CAC-40 Index ($FR:PX1) was up 1.1% to 3,028.
|Short hits from the markets -- New York close|
|Thur.||Wed.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0100%||0.010%||0.00%||-91.67%|
|5-year Treasury note||0.971%||0.958%||2.00%||-51.84%|
|10-year Treasury note||1.957%||2.002%||-11.77%||-40.79%|
|30-year Treasury bond||2.997%||3.092%||-16.56%||-31.29%|
|U.S. Dollar Index||78.603||78.429||5.97%||-0.86%|
|(in U.S. $)|
|U.S. $ in pounds||£0.636||£0.642||3.41%||-0.70%|
|Euro in dollars||$1.36||$1.35||-5.18%||1.90%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.733||€ 0.739||5.46%||-1.86%|
|U.S. $ in yen||77.04||76.54||0.39%||-5.32%|
|U.S. $ in Chinese||6.42||6.39||0.29%||-2.97%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$82.14||$81.21||-7.51%||-10.11%|
Job report means nothing unemployment rate is still 9.1% and probably higher than
their telling. I don't believe anything the governments says including the jobs report.
Cost of Living 1961
How Much things cost in 1961
Yearly Inflation RateUSA 1.07%
Yearly Inflation RateUK 2.9%
Average Cost of new house$12,500.00
Average Income per year$5,315.00
Cost of a gallon of Gas27 cents
Average Cost of a new car$2,850.00
Bacon for 1LB67 cents
Eggs per dozen30 cents
Initial claims for state unemployment benefits fell 37,000 to 391,000, the Labor Department said, well below economists' expectations for 420,000. But the department cautioned that the way it adjusts the data for seasonal fluctuations may have overstated the strength.
One of my favorite adages about the market is; “The market goes up and down a lot more than it goes up or down”. That said, it’s also worth recognizing that Up and Down = Volatility = Risk, and the more risk you have in the market ultimately devalues everything. It may be great for day traders (or not), but, it’s not good for investors.
A volatile market,...good for anyone that knows how to make money. This sort of price action usually precedes a very large move---in this case one would think down, as it keeps testing resistance,...and coming back down off it. Also, it seems to be following the Euro/Dollar price action quite closely, suggesting it is foreigners rearranging their portfolios. And the chart set up, at least, strongly suggests the dollar will be getting stronger---meaning a drop in stocks.
Seems like a beer kind of day,...that illegal alien, with 6 dui arrests, that mows my lawn,---drank all the Vodka yesterday anyway.
I think those you are referring to are computer algorithmic buying and selling programs. I think computers should be outlawed and the floor trader put back where they belong.
Buying and selling at Human speed.
Otherwise, we can't keep up like how the market is acting today on the good news in Europe. The programs are taking profits after the 100 point gain and tomorrow they will be buying the drops.
The revised 2nd Qtr GDP numbers only reflect that QE 2 was still in effect and didn't end until the start of the 3rd Qtr. We will be lucky to see GDP of .9% by years end, unless Bendover Bernanke figures out a QE 3. The twister program won't do a damned thing except set us up for higher inflation and make a few more bankers and Wall Street execs a lot richer.
Some of the unemployment claims were perhaps hurrricane related, but a lot of that drop was people exhausting their 99 weeks of benefits and falling off the rolls. Copper declines are the best indicator of the deep doo-doo we are in. When copper prices decrease its a signal of weak manufacturing demand. Wait until after the holiday earnings season when the real sales weakness starts the actual acceptance of a recession.
Let me see...the news is like
I will only put it in a little bit
It will only hurt a little bit
Although only about 60,000 people would be affected by the Buffett rule, Republicans and millionaires have come out swinging against it. Perry is one of them and says Buffett doesn't understand the real world. "I think it gets right down to the real problem that we've got in Washington, D.C., is an administration that is listening to people who really don't have an understanding about what's going on out there in the real world," Perry told CNBC. He added that Buffett is an intelligent individual. "But I can promise you, he doesn't know what's going on in places where the job creation is at a zero because of over taxation and overregulation." Perry also criticized the Dodd-Frank financial regulations enacted last year in response to the financial meltdown of 2008. Dodd-Frank was created partly to stop future taxpayer bailouts of big banks, but community banks say they will now face more regulation and higher compliance costs.
Yes sir, when it comes to knowing what's going on all you got to do is elect another Texan to the POTUS. Yep, Perry is a worldly genus when it comes to banking, finance and job creation. All you do is drill an oil well in everybody's back yard, surround it with cotton and corn and hire immigrants at minimum wage to do the rest. That'll put tee shirts and tortillas in WalMart for sure. It's really embarrassing to listen to the Republican debates.
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The S&P 500 futures continue to hover near their flat line.
The major Asian markets ended in mixed fashion as China (-0.6%) and Hong Kong (-1.1%) registered losses amid ongoing worries regarding the health of the liquidity-starved Chinese financial system. As a result, the short term repurchase rates have climbed to levels not seen in more than a year. Elsewhere, Japan's Nikkei settled ... More
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