Dow up 72 while Apple, Google hit Nasdaq
A bullish report on retail sales cheers many investors. But the Nasdaq falls as Apple slides for a fifth day, possibly because investors want to cash in profits. Google also drops. Citigroup results help bank stocks. Oil rebounds.
Apple (AAPL) was down today, closing below $600 for the first time since March 23. So were Google (GOOG), Mattel (MAT) and Netflix (NFLX). Starbucks (SBUX) hit an all-time high of $62 right after today's open, but it fell back, too.
Welcome to a market that could only to be described as weird. While Apple and friends struggled, the market overall was mostly higher, thanks in part to a surprisingly strong retail sales report for March.
It's not clear if one can describe the market as giddy, given the haircuts Apple and others suffered and given the worry that March sales were a product more of warm weather than anything else. Other issues haven't gone away: Spain's debt problems, the collapse of natural gas prices and the first decline in seven months in the National Association of Home Builders/Wells Fargo Housing Market Index.
The result was a market that showed some strength in utility, consumer staples, financial and industrial stocks and weakness in energy, technology and consumer discretionary stocks.
The Dow Jones industrials ($INDU) closed up 72 points to 12,921. The Standard & Poor's 500 Index ($INX) was off 1 point to 1,370. The Nasdaq Composite Index ($NDX), however, was down 23 points to 2,988. The Nasdaq-100 Index ($NDX) was off 29 points to 2,670. That said, Apple and Google were almost entirely the reason for the index's decline.
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Apple, down $25.10 to $580.13, subtracted more 21.4 points from the index. Apple represents about 19% of the index's market capitalization. Google, down $18.53 to $606.07, contributed 4.4 points to the decline.
If you ignore the selling in Apple, Google, Netflix and Priceline.com (PCLN) and hot stocks like Starbucks, Chipotle Mexican Grill (CMG) and Panera Bread (PNRA), the market had a pretty good day.
Tuesday brings a host of earnings reports, including Coca-Cola (KO), Goldman Sachs (GS), IBM (IBM), Intel (INTC) and Johnson & Johnson (JNJ). In addition, the Commerce Department will report on housing starts and building permits.
Futures trading suggests a flat open for stocks.
Exxon Mobil tops the Dow
Twenty-four of the 30 Dow stocks were higher on the day. Six stocks -- Exxon Mobil (XOM), Travelers Companies (TRV), Procter & Gamble (PG), Chevron (CVX), Wal-Mart Stores (WMT) and Home Depot (HD) -- combined to add 40 points to the index.
And 278 S&P 500 stocks were higher, led by Vornado Realty Trust (VNO) and Simon Property Group (SPG), both of which have substantial holdings of retail malls in their portfolios.
The Dow Jones Transportation Average ($DJT) was up 38 points to 5,235. The Philadelphia Banking Index ($BKX) is up a half-point to 48. Mid-cap and small-cap stocks were largely higher.
The dollar dropped against major currencies, and light sweet crude oil (-CL) in New York rebounded from early lows, settling at $102.93 a barrel, up 10 cents. Crude in New York had traded as low as $101.80. Brent crude, the benchmark North Sea crude, was down $2.71 to $118.39.
Futures for natural gas, heating oil and unleaded gasoline were all lower.
Light sweet crude in New York moved higher after Enbridge (ENB) and Enterprise Products Partners (EPD) announced plans to start crude oil shipments on the Seaway pipeline from Cushinng, Okla., to the U.S. Gulf Coast on about May 17, according to a filing with regulators.
The pipeline will relieve supply gluts at the big storage-tank complex in Cushing and bring more crude to refineries along the Gulf Coast where much of the nation's gasoline is refined.
The ironic piece of the story: Gasoline prices in the Midwest will likely rise because the pipeline will reduce surpluses that have kept fuel prices relatively low in that region.
Gold (-GC) settled down $10.50 to $1,649.70 an ounce. Interest rates were lower with the 10-year Treasury yield down to 1.974% from Friday's 1.998%.
|Energy prices -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|Crude oil (-CL)||$102.93||$102.83||-0.09%||4.15%|
|Heating oil (-HO)||$3.1166||$3.1746||-1.69%||6.95%|
|Natural gas (-NG)||$2.0160||$1.9810||-5.17%||-32.55%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$3.2670||$3.3461||-1.24%||22.94%|
|(per gallon; AAA)|
What's with Apple, anyway?
So, what's the problem for the Apples and Googles of the world?
The stocks may have gotten too pricey. In Google's case, add continued unease about the company's direction. Plus, Oracle (ORCL) is taking Google to court, charging that Google infringed on some of its patents while developing the Android operating system on its mobile phones. Google was off $19.17 to $605.43.
Apple, meanwhile, fell for a fifth day in a row, its longest losing streak since a seven-day slump in September and early October. It is down 9.9% from its intraday high of $644 on April 10. Two issues seem to be at work.
First is the enormous run-up in the price from last year -- 82% from its intraday low on Oct. 4 to its April 10 intraday high. Measured by its relative strength index, which measures up days against down days, the stock had become grossly overvalued. If a stock's RSI tops 70, it's considered overvalued. Apple reached 96 in mid-February and was nearly at 88 on March 27. It finished just below 40 today. The stock will be oversold once its RSI drops under 30.
There were also concerns that major telecommunications companies might be making it more expensive to upgrades phones in a bid to reduce the huge subsidies they agreed to get the phones in the first place.
(As long as we're talking about RSI values, Google ended today with an RSI of 32. It hit a recent high of 82 on March 26. Its all-time high RSI value was 97.27 on June 2, 2005, when the stock closed at $288.73.)
Verizon Wireless, owned by Verizon Communications (VZ) and Vodaphone (VOD), said last week it would charge an extra $30 for an upgrade. One analyst told The Wall Street Journal there has been talk about a new, smaller iPad that could cannibalize sales of existing iPads.
Warm weather heats up retail sales
The retail sales report was a pleasant surprise. The Commerce Department said Americans spent more on home improvement, gasoline, cars and electronics in March. The report was an indication of steady consumer confidence despite some mixed economic signals.
Sales were up 0.8% overall. Sales less autos also were up 0.8%. Core sales (everything except autos and food) were up an annualized 8.2% in the first quarter, noted Ian Shepherdson of High-Frequency Economics. That's the best performance in two years.
The report suggested, wrote Paul Dales of Capital Economics, that "households are starting to contribute more to the economic recovery just at a time when industrial activity appears to be easing."
The report more than offset the gloom from homebuilders. The NAHB/Wells Fargo index fell back to 25 from 28 in February.
Citigroup earnings miss and non-miss
Citigroup (C) closed up 59 cents to $34. The banking giant reported a first-quarter profit of $1.11 a share, excluding one-time charges. That beat forecasts for $1 a share and the bank's 96-cents-a-share profit a year earlier. Revenue declined about 2% to $19.4 billion, less than the $19.81 billion analysts surveyed by Thomson Reuters had expected.
Investors were cheered that Citigroup's operating profit was decent.
The strength of the report was that trading results improved from the fourth quarter.
Mattel (MAT) reported weaker-than-expected quarterly results. The toy maker reported a profit, excluding one-time charged, of 6 cents a share on revenue of $928.4 million. Analysts had expected 7 cents a share on revenue of $990.9 million.
The problem is that retailers have been reluctant to boost toy inventories.
Shares were off $3.12 to $31.01.
|Short hits from the markets -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0800%||0.080%||14.29%||700.00%|
|5-year Treasury note||0.839%||0.855%||-19.56%||1.08%|
|10-year Treasury note||1.974%||1.998%||-10.92%||5.51%|
|30-year Treasury bond||3.114%||3.148%||-6.91%||7.79%|
|U.S. Dollar Index||79.732||80.055||0.75%||-0.98%|
|(in U.S. $)|
|U.S. $ in pounds||£0.628||£0.631||0.59%||-2.38%|
|Euro in dollars||$1.31||$1.31||-1.49%||1.46%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.761||€ 0.765||1.51%||-1.44%|
|U.S. $ in yen||80.65||80.94||-2.82%||4.60%|
|U.S. $ in Chinese||6.34||6.30||0.29%||0.20%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$102.93||$102.83||-0.09%||4.15%|
since MSN deleted my last comment, I'll say something else. You goons on wall Street are washed up. People are not stupid and are tired of the piss poor leadership in this country. Better cash your chips in now, because this summer will be terrible for retailers if the gas prices do not come down.
There, now delete this one.
Last time I looked farmers were getting only about $1 a pound for cattle and they were not selling beef trimming for $1.01 a pound.
Paying almost $4 a pound for beef when cattle go for $1 a pound is a rip off of US consumers. Also considering they can make two leather jackets out of one cow and sell the jackets for like $500 each at Macy's when the cow only goes for about $800. You would think the beef would be like $1 a pound. Speically if the leather is used for seats in a luxury car $100 for the leather and the seats sell for like $12,000.
Also the other parts are sold for glue and calcium pills so the cow generates about $4,000 of end user products and the farmer only gets $800 of the action.
What a rip off the US consumer is getting.
The clash has hit farmers' incomes. The price of beef trimmings BPI used fell from an average of $1.01 a pound in late February, prior to the controversy, to about 50 cents this past week, according to data from the Department of Agriculture.
Let's see, If there are 100 million workers, and they donated $1.00 each week into a health fund pool, then there would be 5.2 billion dollars available for the year (52 weeks x 100 mil). So annually, the accounting folks will have to deduct $500,000 million for there work, congressional oversight committee will procure $1.0 billion for themselves, payroll processing dept. will cost $500,000 million, and the folks who send out the checks to pay off medical bills/debts for those that apply, will cost 1.0 billion to process. That leaves 2.2 billion annually to give to the un-insured. But wait, we forgot to pay all these folks that are processing paperwork, stamping, mailing, trips to Vegas, overtime. That would leave a budget deficit of $1.2 billion.
So the good intentions of helping just created a unforeseen deficit!
"A bullish report on retail sales cheers many investors"
I think what this really means is "A bullish*t report on retail sales cheers many investors".
"In addition, the Commerce Department will report on housing starts and building permits."
Doesn't the National Association of Home Builders also report housing starts and building permits? Maybe that's why these numbers keep improving...The Commerce Dept is counting them and the NAHB are counting them and then they get added together!!
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[BRIEFING.COM] Market is plodding along with modest gains, underpinned by a steady performance from the financials (+0.4%) today and the continued interest in owning large-cap technology stocks.
The Nasdaq 100 is up 0.5%, which puts it ahead of the pack in today's trading. Conversely, the Russell 2000 (-0.3%) is a notable laggard as small-cap issues feel the pinch of profit taking and perhaps some tax-loss selling interest that tends to pick up this time of year.
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