Dow drops 108 points on Greek worries

But the losses are trimmed substantially in the late afternoon, even as traders worry that a Greek debt default could come soon. Tech stocks rebound, especially Apple, which hits a record high. Gold and oil fall.

By Charley Blaine Sep 19, 2011 12:59PM
Charley BlaineUpdated at 11:34 p.m. ET

A big test for stocks is on -- to see whether last week's rally can continue -- and, for Monday anyway, the market didn't pass.

The Dow Jones industrials ($INDU) were down more than 200 points for the day until a bit after 2 p.m. The loss was trimmed to as little as 69 points with 20 minutes to go in the session before the index fell back. The Standard & Poor's 500 Index ($INX) actually worked their way above 1,200. And all this while Treasury yields fell and the dollar moved higher as many investors sought safety in U.S. markets. Gold (-GC), silver (-SI) and crude oil (-CL) settled lower.

There were few gains in the market. Financial, energy and materials stocks pulled the market lower.

The ugliest part of the sell-off followed selling in Asian and European markets after worries built that Greece could default on its debt this week. But the Greek government said late Monday that talks between Greek financial officials and officials of the International Monetary Fund and the European Union went well, leading to hopes that cash to pay bills and meet payrolls would come soon.

The Dow closed down 108 points, or 0.9%, to 11,401 after falling as many as 254 points around 10:15 a.m. The S&P 500's loss was 12 points, or 1%, to 1,204. The Nasdaq Composite Index ($COMPX) was briefly in the black at 3:30 p.m. ET, but the index fell back to a 9-point loss at 2,613.The Nasdaq-100 ($NDX) actually finished up 3 points to 2,309.

Article continues below.

Futures trading suggest more stress for markets on Tuesday, with the Dow possibly down 70 points at the open and the S&P 500 down 8 points.

The Federal Reserve's Federal Open Market Committee starts a two-day meeting that will focus on possible tools to boost the economy. The Commerce Department reports on housing starts.

Earnings results are due from Adobe Systems (ADBE), ConAgra Foods (CAG) and Oracle (ORCL).
 
Today's early selling was prompted after a two-day meeting of European financial ministers called to try to find some way of stabilizing the euro failed to produce any decisions that could boost confidence.

Gold settled down $35.80, or 2%, to $1,778.90 an ounce Monday, its lowest settlement price since Aug. 25. The metal is down 5.2% since Sept. 2.

Silver, meanwhile, was off $1.668, or 4.1%, to $39.163 an ounce. Copper (-HG) had dropped 14.9 cents, or 3.8%,  to $3.7825 a pound.

Light sweet crude oil had closed down $2.26, or 2.6%, to $85.70 a barrel, and Brent crude was off $2.95, or 2.6%, to $109.27. For the year, light sweet crude is now down 6.8%.

The dollar moved higher against the euro and the British pound and lower against the yen and Swiss franc.

The 10-year Treasury yield fell to 1.94% from Friday's 2.076%. Aside from the fact that the yield is really low, it should be noted that the yield is lower than the dividend yield on stocks in the S&P 500. The dividend yield was 2.17% on Friday.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$85.70

$87.96

-3.50%

-6.22%
(per barrel)











Heating oil (-HO)

$2.9447

$3.0089

-4.52%

15.76%
(per gallon)











Natural gas (-NG)

$3.8290

$3.8090

-5.55%

-13.08%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6965

$2.7841

-6.25%

9.92%
(per gallon)











Brent crude 

$109.14

$112.22

-4.97%

15.19%
(per barrel)











Retail gasoline

$3.5880

$3.5930

-0.80%

16.80%
(per gallon; AAA)












Greece is the market
The sell-off in U.S. stocks had its roots in the European debt crisis and the absence of much concrete from a two-day meeting of European finance ministers Friday and Saturday. It was clear Sunday night Eastern time that U.S. stocks would fall sharply Monday.

There was also fear that President Barack Obama's deficit-reduction plan would go nowhere after it proposed $1.5 trillion in taxes on the wealthiest Americans.

But that was only a small factor in the selling. "It's Greece all of the time," said Toronto money manager Terry Bedford.

Big movers: Goodrich, Tyco, Lennar, Netflix
Shares of Goodrich (GR), the maker of landing gear, wheels, brakes, engine-control systems and other products for airplanes, closed up 15.8% to $107.60. Reports Friday and over the weekend said that Dow component United Technologies (UTX) is reportedly exploring a takeover bid for Goodrich. United Technologies was up 0.3% to $74.55.
 
Tyco International (TYC) said it will separate into three publicly traded companies -- security business ADT North America, flow control products and services, and a commercial fire and security business. Shares were gaining 2.4% to $44.75.

Shares of homebuilder Lennar (LEN) were up 4.9% to $14.47 after the company's fiscal-third-quarter results beat expectations. Net income declined 31% to $20.7 million, or 11 cents a share, from a year ago. Analysts had been looking for 10 cents. Revenue declined slightly to $820.2 million.

General Motors (GM) reached an agreement with the United Auto Workers union on a new four-year labor contract covering the Detroit carmaker's 48,500 U.S. workers. Shares were up 2% to $23.05.

Netflix (NFLX) plans to rebrand its DVD-by-mail service as Qwikster and separate the business from its movie streaming. Shares were down 7.4% to $143.75.

A broad sell-off
Only four of the 30 Dow stocks were lower. The best performer was McDonald's (MCD), 0.6% to $88.81. The laggards were Bank of America (BAC),Alcoa (AA) and American Express (AXP), down 3.3% to $6.99, 3.3% TO 11.58 and 2.9% to $48.68.

Only 82 S&P 500 stocks were higher, led by Goodrich, Chipotle Mexican Grill (CMG), up 5.7% to $336.14, and Starbucks (SBUX), up 5% to $41.16. The laggards were Morgan Stanley (MS), down 7.9% to $15.15; Netflix and Monster Worldwide (MWW), down 7% to $8.47.

The Nasdaq-100 Index ended higher mostly because of a 2.8% gain for Apple (AAPL) to $411.63 contributed 9.4 points to the index. The shares hit a new all-time high of $413.23.

In fact, only 24 Nasdaq-100 stocks were higher for the day, led by Starbucks and Whole Foods Market (WFM), up 4.4% to $72.10. The laggards were Netflix and NetApp (NTAP), down 3.8% to $36.35.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.010%

0.00%

-91.67%
5-year Treasury note 

0.830%

0.930%

-12.82%

-58.83%
10-year Treasury note

1.940%

2.076%

-12.53%

-41.30%
30-year Treasury bond

3.192%

3.341%

-11.14%

-26.82%
Currencies











U.S. Dollar Index

77.435

76.593

4.40%

-2.34%
British pound

1.5654

1.5723

-3.68%

0.31%
(in U.S. $)











U.S. $ in pounds

£0.639

£0.636

3.82%

-0.31%
Euro in dollars

$1.36

$1.37

-5.27%

1.80%
(in U.S. $)











U.S. $ in euros

€ 0.734

€ 0.731

5.56%

-1.77%
U.S. $ in yen 

76.57

76.91

-0.23%

-5.90%
U.S. $ in Chinese

6.42

6.38

0.23%

-3.02%
yuan











Canada dollar

$1.009

$1.019

-1.27%

0.55%
(in U.S. $)











U.S. dollar 

$0.992

$0.981

1.29%

-0.55%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,778.90

$1,814.70

-2.88%

25.15%
(per troy ounce)











Copper (-HG)

$3.783

$3.932

-10.04%

-14.94%
(per pound)











Silver (-SI)

$39.1630

$40.8310

-6.24%

26.59%
(per troy ounce)











Wheat (-ZW)

$6.7300

$6.8825

-14.97%

-15.27%
(per bushel)











Corn (-ZC)

$6.9225

6.92

-10.18%

11.20%
(per bushel)











Cotton 

$1.0552

1.1052

-0.27%

-27.13%
(per pound)











Coffee

$2.6205

2.604

-9.09%

8.96%
(per pound)











Crude oil (-CL)

$85.70

$87.96

-3.50%

-6.22%
(per barrel)










 

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