Slumping energy stocks push market lower
The Dow falls 72 but recovers from a loss of 128 points as lower crude prices hit Exxon and Chevron. Caterpillar drops on a disappointing durable-goods report. Investors clamor for shares of pasta-maker Annie's. Facebook IPO may come in May.
Updated: 7:34 p.m. ETStocks slumped today but finished well off their lows as a weaker-than-expected report on durable-goods orders and a slump in energy stocks weighed on markets. The Dow Jones industrials ($INDU) were briefly down more than 100 points.
Energy and metals shares were the market's laggards. Crude oil (-CL) briefly fell below $105 a barrel after an Energy Department report showed larger-than-expected U.S. oil inventories. In addition, the French newspaper Le Monde reported that the United States, Britain and France are considering releasing strategic oil reserves to push gasoline prices lower. Gold dropped $27 to 1,657.90 an ounce.
Apple (AAPL) hit yet another new intraday high -- $621.45 -- before falling back to $617.62, up $3.14 and a new closing high. One reason for the pullback from the peak may be that Apple is being charged with misleading purchasers of the new iPad outside the United States that the device would work in 4G networks in their countries. Apparently, the new iPad isn't compatible in places such as Australia and Sweden.
Meanwhile, shares of Annie's (BNNY), the organic pasta maker, jumped $16.92 to $35.92 in their first day of trading on the New York Stock Exchange. Annie's makes a number of organic and natural foods sold nationwide, most famously its signature rabbit-shaped macaroni and cheese. The company sold 5 million shares at $19 late Tuesday in an initial public offering. That was better than the expected $16 to $18 a share.
The Dow closed down 72 points to 13,126; the blue chips had been down as many as 128 points shortly after 2 p.m. ET. The Standard & Poor's 500 Index ($INX) was down 7 points to 1,406 after dropping to as low as 1,397. The Nasdaq Composite Index ($COMPX) shed 15 points to 3,105.
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The Nasdaq-100 ($NDX), which tracks the largest Nasdaq stocks and is heavily influenced by Apple, was down 11 points to 2,771.
The losses for the Dow and S&P 500 were their largest since they fell 78 points and 10 points, respectively, on March 22. The Nasdaq's loss was its biggest since a 40-point loss on March 6.
The market has been unable to build on Monday's rally that saw the Dow jump 161 points.
In fact, with today's declines, the Dow has given up more than 72% of Monday's gain in two days. The S&P 500 has shed 57% of its Monday rally, and the Nasdaq has dropped 32% of its gain.
But the finish was not terrible. The S&P 500 finished above 1,404, which was a near-term support level. Toronto money manager Terry Bedford sees the finish as very bullish. Especially given that the index gained more than 8 points in the last two hours of the day.
Thursday's market looks to open flat to slightly lower. The Labor Department will report on initial jobless claims for the last week. The Commerce Department will release its final estimate on fourth-quarter growth.
Key earnings are due from Best Buy (BBY) and Research In Motion (RIMM). Best Buy is struggling to compete against Amazon.com (AMZN) and others. Research In Motion, maker of the BlackBerry device, also has been losing market share to Apple's iPhone and devices powered by Google's Android operating system.
After the close: Millenium Media, Red Hat, Mosaic
Not a bad week for initial public offerings. After the close, Millenial Media, which operates an advertising network specializing in mobile ads, priced its initial public offering at $13, raising $132.6 million before expenses and valuing the company at $973.5 million. Trading starts Thursday under the ticker MM.
Shares of software developer Red Hat (RHT) jumped 8.4% after hours to $55.67. Red Hat earned 29 cents a share after one-time charges in its fiscal-fourth quarter, up 12% from a year ago. Revenue grew 21% to $297 million. The company will buy back $300 million in shares.
Shares of fertilizer maker Mosaic (MOS) fell 2.3% to $56.90 from a regular close of $58.22. The company said fiscal third-quarter net income fell nearly 50% as the fertilizer and feed ingredient maker coped with lower potash volumes and higher phosphate costs.
Facebook IPO coming in May
Facebook is preparing its initial public offering for May, The Wall Street Journal and Bloomberg reported, in what is shaping up to be the largest-ever U.S. Internet offering.
The social-networking site halted trading of its shares on the secondary market this week as it sets about nailing down its shareholder count.
| Energy prices -- New York close | ||||||||||||
| Wed. | Tues. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $105.41 | $107.33 | -1.55% | 6.66% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $3.2222 | $3.2360 | 0.51% | 10.57% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.2820 | $2.2940 | -12.77% | -23.65% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $3.3621 | $3.3864 | 3.22% | 26.52% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $124.16 | $125.54 | 1.22% | 15.63% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.9110 | $3.8980 | 4.82% | 19.38% | ||||||||
| (per gallon; AAA) | ||||||||||||
Crude falls on growing supplies
Crude oil settled down $1.92 to $105.41 a barrel after falling to as low as $104.67. Crude dropped after the Energy Department said domestic oil inventories climbed 7.1 million to 353.4 million barrels. The gain was the biggest in 20 months as imports surged.
Plus there was all the chatter about the possible releases from the Strategic Petroleum Reserve.
Imports were the biggest reason for the surge, rising 13.7% in the latest week. That offset a decline in gasoline inventories.
The retail price of gasoline was up 1.3 cents to $3.911 from Tuesday's $3.898, according to AAA's Daily Fuel Gauge Report.
Crude oil in New York is up 6.4% this year, and retail gasoline prices have surged 19.4% this year because of concern that Western sanctions aimed at halting Iran’s nuclear program will disrupt Middle East supplies. Iran has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to an embargo on its oil exports.
At the same time, natural gas was lower. The May contract settled at $2.282 per million British thermal units, down 1.2 cents. The April contract, which expires on Friday, was at another 10-year low, settling at $2.191.
Because oil and natural gas prices were lower, Exxon Mobil (XOM) was down 76 cents to $85.86 and ConocoPhillips (COP) was off 86 cents to $75.98.
Brent crude in London also fell. Energy stocks were the market's weakest link. Airlines, however, were among the market leaders.
Gold and silver drop; rates bump up
In addition to gold's pullback, silver (-SI) fell 78.5 cents to $31.83 an ounce. Copper (-HG) dropped 8.8 cents to $3.7925 a pound.
Metals stocks were lower. Freeport-McMoRan Copper & Gold (FCX) fell $1.39 to $37.36. Alcoa (AA) fell 23 cents to $9.83. Newmont Mining (NEM) dropped 99 cents to $51.50.
Interest rates were a touch higher, with the 10-year Treasury yield climbing to 2.196% from Tuesday's 2.187%. An auction of 5-year Treasury notes produced a yield of 1.04%, slightly higher than expected.
Durable-goods ordersdisappoint
Durable-goods orders rose 2.2% to $211.8 billion in February after declining 3.6% in January. Economists had expected orders to rise by 2.9%. Excluding transportation, orders rose 1.6%.
Durable goods are anything that is supposed to last longer than three years or so. They include computers, airplanes, trucks, machinery and the like.
The big problem with the report was a smaller-than-expected increase in orders for aircraft. That perplexed many analysts who had noted that Boeing (BA) had reported a 58% month-over-month increase in orders in February.
Outside of aircraft, Capital Economics noted, the orders data were "encouraging." Paul Ashworth, chief U.S. economist, cited orders for motor vehicles moving up 1.6% and non-transportation orders increasing by 1.6%. The latter was roughly in line with the consensus forecast of a 1.7% gain.
The report hit stocks of companies whose fortunes are directly tied to economic growth. Caterpillar (CAT) fell $3.80 to $104.26. The decline subtracted nearly 30 points from the Dow. Joy Global (JOY), which makes mining equipment, was off $2.44 to $71.43.
Good day for financials
Financial stocks actually had a pretty good day. You can see it in the Dow.
Only 10 of the 30 stocks in the blue-chip index were higher, led by Bank of America (BAC) and American Express (AXP), up 15 cents to $9.75 and 84 cents to $59.06, respectively. JPMorgan Chase (JPM) was fourth, up 38 cents to $46.27.
Meanwhile, only 95 S&P 500 stocks were higher, led by homebuilder PulteGroup (PHM) and Tyco International (TYC), up 42 cents to $9.48 and $2.28 to $55.81, respectively. Sears Holdings (SHLD) and Supervalu (SVU) were the laggards, down $4.51 to $68.99 and 29 cents to $5.94, respectively.
Only 16 Nasdaq-100 stocks were higher, led by graphics chipmaker Nvidia (NVDA) and Flextronics (FLEX), up 34 cents to $15.16 and 13 cents to $7.35, respectively. Sears Holdings was the laggard.
Leaders and laggards
Amylin Pharmaceuticals (AMLN) surged $8.38 to $23.77. The maker of the diabetes drug Bydureon rejected a $3.5 billion unsolicited takeover bid from Bristol-Myers Squibb (BMY) earlier this year. The news effectively puts the company in play as a takeover candidate.
Jos. A. Bank Clothiers (JOSB) fell $4.66 to $49.82. The maker of men's apparel said its first quarter started "more slowly" than planned. The company reported fourth-quarter sales of $346.3 million, missing the average analyst estimate of $353.5 million.
Pentair (PNR) surged $6.06 to $46.32. The maker of Everpure water filters agreed to combine with the Tyco Internationaldivision that makes valves and other flow-control instruments in a deal that values Tyco Flow at $4.53 billion.
Sealy (ZZ) rose 12 cents to $2 after reaching as high as $2.23. The mattress maker reported first-quarter net sales of $312.3 million, beating the consensus estimate of $301.7 million.
| Short hits from the markets -- New York close | ||||||||||||
| Wed. | Tues. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0700% | 0.070% | -12.50% | 600.00% | ||||||||
| 5-year Treasury note | 1.028% | 1.020% | 17.49% | 23.86% | ||||||||
| 10-year Treasury note | 2.196% | 2.187% | 11.08% | 17.37% | ||||||||
| 30-year Treasury bond | 3.304% | 3.300% | 7.06% | 14.36% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 79.299 | 79.222 | 0.64% | -1.52% | ||||||||
| British pound | 1.5896 | 1.5954 | -0.24% | 2.30% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.629 | £0.627 | 0.24% | -2.25% | ||||||||
| Euro in dollars | $1.33 | $1.33 | -0.15% | 2.81% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.751 | € 0.751 | 0.15% | -2.73% | ||||||||
| U.S. $ in yen | 83.06 | 83.20 | 2.08% | 7.72% | ||||||||
| U.S. $ in Chinese | 6.32 | 6.30 | 0.09% | -0.02% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.000 | $0.995 | -100.00% | -100.00% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $0.999 | $0.995 | 1.00% | -2.11% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,657.90 | $1,684.90 | -3.12% | 5.81% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.793 | $3.880 | -2.24% | 10.38% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $31.8310 | $32.6160 | -8.11% | 14.03% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.3075 | $6.3975 | -5.58% | -3.37% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $6.2025 | $6.308 | -5.74% | -4.06% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.9385 | 0.9301 | 3.77% | 2.37% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.8470 | 1.8985 | -9.13% | -19.57% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $105.41 | $107.33 | -1.55% | 6.66% | ||||||||
| (per barrel) | ||||||||||||
Unfortunately the days of cheap gas look like they are over. Even if Oil continues to go down by the time the consumer sees it at the pump it usually takes about 4 weeks & in that time frame many things typically happen (refinery shut downs, Middle East tensions, possible wind blowing from Africa that might be a Hurricane, etc.) to block any price reductions. On the other hand the minute the barrel price goes up it does not take 4 weeks to hit the consumer...it takes place almost immediately. So between Speculators on Wall Street artificially inflating the price & our worthless Government doing absolutely nothing to help the everyday John & Jane we are all basically screwed!!!!!!!!!!
Crude oil in New York is up 6.4% this year, and retail gasoline prices have surged 19.4% this year because of concern that Western sanctions aimed at halting Iran’s nuclear program will disrupt Middle East supplies. Iran has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to an embargo on its oil exports.
Gas prices will continue to be high as long as the dollar is devalued. The price of crude is in dollars. When the dollar is devalued, the price of oil goes up. When the value of the dollar is worth more, the price of oil will come down.
If you want cheap oil, tell congress to stop the Fed from printing money to make the dollar worthless.
By the way when the dollar is devalued, more people overseas buy our goods (more export from here) and jobs come back here. The consumer and American worker are between the rock and the hard place.
ASK NOT FOR WHOM THE BELL TOLLS, BARRY.................IT TOLLS FOR THEE..........LOL!
See ya in Nov at the "RETURN TO NATIONAL PRIDE" replacement of our idiot in chief and his personal dietetic consultant!
"NEW YORK (AP) - Bank of America gave its CEO a pay package worth $7.5 million last year, six times as large as the year before. It happened while the company's stock lost more than half its value and the bank lost its claim as the biggest in the country.
The package for CEO Brian Moynihan included a salary of $950,000, a $6.1 million stock award and about $420,000 worth of use of company aircraft and tax and financial advice."
This is what is wrong with American business. For a company to take government bailout money, hide their toxic assets on their books, avoid paying legitimate taxes thru accounting "loop holes" and then reward their CEO for poor performance. Just a slimeball bank...enough said.
Plenty of oil .. but gasoline needs some competition to bring prices down. With major auto makers introducing natural gas vehicles, and as more and more companies convert to the abundant alternative for their fleet of vehicles .. it is now up to the consumer on Main Street to choose to between the two .. high priced gasoline and diesel .. or compressed natural gas .. for the next fill up.
LOL....
Obama's budget lost in the house 414-0! That's right the President's budget recieved ZERO democrat votes, not one.
Obviously they didn't want to vote for the huge tax and spending increases Mr. Obama proposed. The man is truely clueless when his own budget cannot even get a single Democrat vote. One democrat went so far as to call it Obama's communist manifesto... I'd hate to him when the Whitehouse calls...
I also read (on far less leftist site) where Obama has spent millions more than all Republicans combined so far. He does like to SPEND....
The only way to reduce oil prices........or at least have ANY control is to attain a glut of oil.
That can not happen if we allow those leasing our wells to sell oil anywhere except the U.S..
Control of OUR NATIONAL NATURAL RESOURSES is the key....................NATIONALIZATION IS THE CURE!
.........and quit crying.............oil in any market will always be a slam dunk guaranteed profit at any price above $70 per barrel.
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[BRIEFING.COM] Equities ended on their lows with the S&P 500 down 1.4%.
The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
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