Dow falls 31 after recovering from early slump

The blue chips come back after an early 112-point loss. French automaker Peugeot announces 8,000 job cuts. The euro hits a 2-year low. P&G gets some new attention. Oil and gold slide. Marriott International and Supervalu sag.

By Charley Blaine Jul 12, 2012 12:23PM
Charley BlaineUpdated: 2 a.m. ET

Stocks finished lower today as worries built about global growth and the health of the domestic economy. But the major averages ended the day well off sharp lows from early in the day.

The Dow Jones industrials ($INDU) lost as many as 112 points before rebounding to a gain of as many as 26 points. But a late fade pushed the blue-chip index to its sixth straight loss, down 31 points to 12,573.

One catalyst for the slump: Berkshire Hathaway (BRK.B) CEO Warren Buffett conceded the economy is struggling. A second catalyst: investor disappointment that minutes from the Federal Reserve's June meeting gave no hint when it might launch a new round of economic stimulus. But a catalyst for the rebound: Activist investor Bill Ackman has begun building a stake in consumer-products giant Procter & Gamble (PG). P&G was up $2.30 to $63.70.

The finish sets up an important day on Friday. China reported early Friday that its economy grew at an annualized 7.6% in the second quarter. The growth was down from 8.1% a year ago and the lowest growth rate since the first quarter of 2009. Still, the report was in line with estimates. Meanwhile, JPMorgan Chase (JPM) and Wells Fargo (WFC) will report second-quarter results before the open. JPMorgan's results will be closely scrutinized for details about its huge derivatives loss, expected to run about $5 billion. Futures trading suggests a modestly higher open.

In addition to the Dow's loss, the Standard & Poor's 500 Index ($INX) dropped 7 points to 1,335, and the Nasdaq Composite Index ($COMPX) slid 22 points to 2,866. The Nasdaq-100 Index ($NDX) fell 26 points to 2,545.

Article continues below.
Apple
(AAPL), the largest influence on the index, finished down $5.53 to $598.90. It had dropped to as low as $592.68. It was Apple's first close below $600 since July 3.

Like the Dow, the S&P 500 suffered its sixth loss in a row. The Nasdaq's decline was its fifth straight. The losing streaks are the worst for the indexes since mid-May. The Nasdaq-100 loss was its fifth straight and its longest losing skein since falling for nine straight days in mid-May.

The market shrugged off a big drop in jobless claims to a seasonally adjusted 350,000, the fewest in four years. A big reason the report didn't generate excitement: Automakers have not been shutting plants down for retooling because they're scrambling to meet current demand.

P&G was the Dow's second-best performer after Merck (MRK), which jumped $1.70 to $42.91 after the drugmaker ended the late-stage study of an osteoporosis treatment because there was clear evidence of success.

The euro's tumble starts a sell-off
Stocks took their cue from the euro, which briefly hit $1.2168 against the dollar, a two-year low, before rebounding to $1.2206. A rising dollar hurts prices of commodities normally priced in dollars and hurts U.S. companies that generate large portions of their revenue from abroad.

The euro's decline -- and the dollar's gain -- was due in large part to French automaker Peugeot's (PEUGY) announcement it was laying off 8,000 workers and shutting down one of its oldest plants next year.  The company already was cutting 6,000 jobs. Peugeot was off 8 cents to $8.62 in New York.

The announcement surprised the French government and stunned European financial markets. France's CAC-40 Index ($FR:PX1) index fell 22 points to 3,135. Germany's Xetra Dax Index ($DE:DAX) fell 35 points to 6,419, and the United Kingdom's FTSE-100 Index ($GB:UKX) fell 56 points to 5,608.

Crude oil (-CL) in New York settled up 27 cents to $86.08 a barrel. It had been as low as $84.21. Brent crude was up 50 cents to $100.73 a barrel. Gold (-GC) settled down $10.40 to $1,565.30 an ounce.

The 10-year Treasury yield fell to 1.479% from 1.498% on Wednesday.

Energy prices -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$86.08

$85.81

1.32%

-12.90%
(per barrel)











Heating oil (-HO)

$2.7733

$2.7618

2.34%

-4.83%
(per gallon)











Natural gas (-NG)

$2.8740

$2.8530

1.77%

-3.85%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8062

$2.7689

6.63%

5.60%
(per gallon)











Brent crude 

$100.73

$100.23

3.00%

-6.19%
(per barrel)











Retail gasoline

$3.3840

$3.3830

0.92%

3.30%
(per gallon; AAA)












Marriott and Supervalu weigh on the markets
Meanwhile, shares of Marriott International (MAR) and supermarket operator Supervalu (SVU) were off sharply. Marriott, which warned of slowing growth in the Middle East and Asia,  was off $2.45 to $35.58.

Supervalu suspended its dividend and said it was conducting a review of its strategic options after earnings fell 45% from a year ago amid intense competition for grocery dollars.

Supervalu, operator of the Albertsons, Jewel-Osco and Shaw’s chains, saw its share price cut nearly in half, down $2.60 to $2.69. Supervalu also pushed down shares of Kroger (KR) and Safeway (SWY). Wal-Mart Stores (WMT), whose expansion into groceries is a big reason for the problems with supermarkets, finished up 5 cents to $72.31.

Boeing (BA) shares closed up 19 cents to $71.71. It announced a $14.7 billion order for more than 150 737 airliners from United Continental Holdings (UAL), which was off $1.01 to $23.78.

Twelve of the Dow stocks were higher, led by Merck and Procter & Gamble. Intel (INTC) and Microsoft (MSFT), the publisher of MSN Money, were the laggards, down 65 cents to $24.74 and 67 cents to $28.63, respectively.

Meanwhile, 139 S&P 500 stocks were higehr, led by Fastenal (FAST), up $2.50 to $42.31, and Merck. Fastenal, which makes fasteners, tools, safety equipment and related products, said earnings grew 18.8% to 38 cents a share. Revenue was up 14.7% to $804.9 million. Sales growth, however, tailed off in the quarter

Safeway, Lexmark International (LXK) and Marriott International were the laggards.

Fastenal was also the top Nasdaq-100 performer, followed by Netflix (NFLX) and O'Reilly Automotive (ORLY). Outsourcing contractor Infosys (INFY) and Sears Holdings (SHLD) were the laggards.

Wells Fargo settles discrimination case for $175 million
Wells Fargo shares were off 42 cents to $32.85. The nation's largest mortgage lender will pay at least $175 million to settle allegations that the company discriminated against black and Hispanic borrowers.

The settlement announced by the Justice Department today involves at least 34,000 minority borrowers who were charged higher fees or were steered by mortgage brokers into risky subprime mortgages when they could have qualified for a prime mortgage, ones offered to borrowers with the best credit.

Wells Fargo denied it had done anything illegal but settled to avoid litigation. It will stop working with mortgage brokers, however. Mortgages sold by brokers currently represent 5% of the Wells Fargo's home loan volume, according to the company. The company stopped all subprime home lending in 2008.

The Justice Department action was triggered by a 2009 examination by the Office of the Comptroller of the Currency, The Wall Street Journal noted. The investigation found that, after controlling for credit factors, that it appeared that minority borrowers in the Washington, D.C., metro area were more likely than white borrowers to be placed in subprime loans, according to the consent order.

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.090%

25.00%

900.00%
5-year Treasury note 

0.627%

0.628%

-13.99%

-24.46%
10-year Treasury note

1.479%

1.498%

-10.85%

-20.95%
30-year Treasury bond

2.564%

2.589%

-7.20%

-11.25%
Currencies











U.S. Dollar Index

83.809

83.728

2.51%

4.08%
British pound

1.5442

1.5511

-1.67%

-0.62%
(in U.S. $)

 








U.S. $ in pounds

£0.648

£0.645

1.70%

0.62%
Euro in dollars

$1.22

$1.22

-3.27%

-5.76%
(in U.S. $)

 








U.S. $ in euros

€ 0.819

€ 0.817

3.38%

6.12%
U.S. $ in yen 

79.43

79.72

-0.40%

3.02%
U.S. $ in Chinese

6.40

6.37

0.36%

1.10%
yuan











Canada dollar

$0.983

$0.982

0.04%

0.18%
(in U.S. $)

 








U.S. dollar 

$1.018

$1.019

-0.03%

-0.18%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,565.30

$1,575.70

-2.42%

-0.10%
(per troy ounce)

 








Copper (-HG)

$3.415

$3.448

-2.33%

-0.61%
(per pound)

 








Silver (-SI)

$27.1610

$27.0230

-1.63%

-2.70%
(per troy ounce)

 








Wheat (-ZW)

$8.4675

$8.2625

11.82%

29.72%
(per bushel)

 








Corn (-ZC)

$7.3225

$7.040

15.36%

13.26%
(per bushel)

 








Cotton 

$0.6993

0.7102

-1.96%

-23.72%
(per pound)

 








Coffee

$1.8205

1.847

6.65%

-20.73%
(per pound)

 








Crude oil (-CL)

$86.08

$85.81

1.32%

-12.90%
(per barrel)










 

184Comments
Jul 12, 2012 6:13PM
avatar
So true Zamfph, a Oligarchy is what we've become, 4 institutions own half the mortgages in the U.S.,  two thirds of all Credit Cards and 40% of all Bank Deposits. Over the counter Derivatives have grown to $290 trillion and 95% are held by just 5 institutions, Citi Group, JP Morgan Chase, BofA, run our government not the people, even Paul Ryan said " we must reinstate Glass - Steagall " no one should be to big to fail.
Jul 12, 2012 6:13PM
avatar
 Speaking of Corzine, how stupid were the people of New Jersey in thinking a former Goldman Sachs CEO was a DEMOCRAT!!
Jul 12, 2012 6:09PM
avatar
Weed Head .... go back to the basement. The mail has already come and your welfare check wasn't there. Maybe tomorrow ... you mooching, uneducated, freakin dimwit!
Jul 12, 2012 6:06PM
avatar
 GOP bureaucracy sucks BIG TIME.  instead of writing an entitlement bill to be as inclusive as possible like medicare, they put so damned many catch 22s into it that it takes a  HUGE bureaucracy just to ensure that Uncle Sam is not getting ripped off. by people trying to get around  the catch 22s  ALL in a wasted effort to save their upper Cl****s as much as possible in taxes. Wasted because it costs just as much in bureaucratic costs as it does for the "handouts" that get past the catch 22s--- and makes for MORE govt workers, not less
Jul 12, 2012 6:05PM
avatar

Like i said...its simple...you vote for Robmey and you vote for

 

Madoff, Ebbers, Skilling, Corzine,  the dude that went 'missing' yesterday (with 17 mil), outsourcing, claiming your an entreprenuer when, in reality, you buy and chop up companies and lay people off, derugulate banks and wall street so every slimeball out of ivy-league schools can graduate and join the next group of fleecing Wall Street ****s....

 

and on, and on, and on....

 

in the end...'The Merry Misadventures of My Dog Mutt' has a truly genuine message and , if you tune in, you might just 'clue in' on some realities occuring in our midst..

Jul 12, 2012 6:04PM
avatar

Obama .. how bad will things really get?

Well .... let me see. With our country going in debt $4 billion per day and no jobs out there, and since I have no idea how to create a budget, I'd say things are going to get really bad.

Obama ... how are you going to turn things around?

Well, that's a good question .... and to be totally honest, I have no freakin idea?

Obama .... if you owned a business, would you want yourself to be the CEO?

Are you kidding me ... I have no concept about business and as you can tell, I couldn't even figure out how to run community affairs in Chicago!

So Obama .... what should we do?

Why you bugging me ... I'm just the Pres and I'm only a figurehead for Pelosi and Reid who tell me what to do!!

Jul 12, 2012 5:58PM
avatar
Hey V_L  How about one on Jon the (SLIME) Corzine.
Jul 12, 2012 5:57PM
avatar
Marc just for YOU. 

 What can you do? SOME people actually ENJOY sitting in the bottom of some Fat Cat's $35,000 office toilet getting trickled down on. I guess it make it that much easier to kiss their butt!
Jul 12, 2012 5:56PM
avatar
Tumbleweed, google Jude Wanniski, in 1976 He laid out the Republican strategy for the last 30 years. By Republicans cutting taxes and increasing government spending, they become the good Santa and this forces the responsible Democrats to Raise taxes to save our nation from turning into Greece, making them the bad Santa. Unfortunately most Americans are to shallow to know when their being played for fools.
Jul 12, 2012 5:54PM
avatar
Wal-Mart is UP... apparently, trailer trash prefer to buy food in substandard conditions rather than in stores dedicated to just groceries.
Jul 12, 2012 5:50PM
avatar
One of my favorites of the day... Let's ask Warren Buffett about the economy...

"Hey Warren, when will Europe get it's act together?"
"10 years from now"
"When will the world end?"
"6 months from now"
"What do you think of Jamie Dimon, Warren?"
"He's the world's greatest bankster... I mean- banker."
"Fraudulent Slip... I mean Freudian Slip, Warren?"
"If his bribe check bounces, go with your first slip."
"What should regular people be doing right now, Warren?"
"Tray tables up, seat belts clicked and if you can, head tucked between the knees."  

Jul 12, 2012 5:48PM
avatar
 Only a disingenuous fool would write the blueprint for Obamacare, get it passed in Mass, brag about what a great success it was and then diss Obama for doing EXACTLY the same damned thing. Get the **** out of Dodge, Mitt, you insult my intelligence ,you flip flopping beady eyed cold fish and take Two  Cadillac Ann with you
Jul 12, 2012 5:47PM
Jul 12, 2012 5:41PM
avatar
 Only a mental midget would cut the capital gains tax in half. outsource millions of good paying manufacturing jobs, and then wonder where in the hell all the tax revenues went. Remember? **** Cheney said deficits don't matter! WHAT a twit

 Or someone who was deliberately trying to starve the beast by driving that hated SOB Uncle Sam so far in debt he wouldn't have anything left over for ' handouts"
Jul 12, 2012 5:39PM
avatar
and today's word is "plutocratic oligargy" a concept dreamed up by some greek dude named Aristotle. Under such an operating system of government the policies are set by merchants and bankers. The politicians, without the terrible onus of having to make decisions, spend all their time working to get re-elected to remain at the trough. A remarkable vision from around 3,000 years ago. Proving once again that one of the constants in mankind is avarice and the ability to sell out. 
Jul 12, 2012 5:37PM
avatar
Sorkin is such a weasel!!!... He kisses BanksterButts.
Jul 12, 2012 5:32PM
avatar
The british are coming, The british are coming, blah blah blah. Lets stop feeding the fire with nonsense that the average man can't begin  to  play.  Lets talk about the fact that the DOW is a play ground for the brokers who will manipulate the market to make it look like the sky is falling again.
Jul 12, 2012 5:22PM
avatar

 could have been worse...........

spin spin spin spin spin

spin spin spin spin spin

spin spin spin spin spin

 

if frogs had wings they wouldnt hit their **** every time they jump

 

KOOLADE!!

Jul 12, 2012 5:19PM
avatar

What we need to do is somehow organize the every day people of the U. S. and go to Washington and

 drive these idiots out of office. All the congressmen and senators can go out the door. They no longer

 represent the people, just themselves and special interests. WE need to group together and get these

idiots out of office. When November somes, there isn't one single person in office now, running for

re-election I would vote for. Maybe if we got about 3 million people together and marched on Washington,

 maybe we could force some change. Anyone have any ideas?

Jul 12, 2012 5:07PM
avatar
three  city in california  has  belly up
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[BRIEFING.COM] The stock market began the new trading week on the defensive note with small-cap stocks pacing the retreat. The Russell 2000 (-1.4%) and Nasdaq Composite (-1.1%) displayed relative weakness, while the S&P 500 lost 0.8% with all ten sectors ending in the red.

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