Dow off 77 as stocks struggle on weak retail sales
Retail sales were soft in May and softer in April. A ratings agency cuts Spain's debt rating to junk. Oil slips but gold moves higher. European stocks drop. Dell gains on its dividend announcement.
By Charley Blaine Jun 13, 2012 12:22PM
Updated: 5:19 p.m. ETStocks slumped today as bad news piled onto bad news. The Dow Jones industrials ($INDU) fell as many as 120 points at 3:45 p.m. ET before late buying trimmed the loss to 77 points.
There was the government's disappointing report on May retail sales. Worries grew about the financial risks from Sunday's parliamentary election in Greece. Greek depositors were pulling their money out of banks in case the election resulted in junking the euro as their currency. Credit Agricole (CRARY), one of France's largest banks, was reportedly making plans to sell -- or simply abandon -- its Greek subsidiary.
Then, ratings agency Egan-Jones cut its rating on Spanish debt from "B" to "CCC+," which is junk status. And mining giant BHP Billiton (BHP) cut its outlook for commodities prices over the next three to five years. The Financial Times called the report a sign that natural-resources companies "are braced for a lasting impact from the global financial crisis."
The one offset: JPMorgan Chase (JPM) CEO Jamie Dimon wowed investors -- if not critics -- in his defense of the banking giant in the aftermath of a huge trading loss in one its divisions. JPMorgan shares were up 53 cents to $34.40.
The Dow closed down 77 points to 12,496, a day after the blue chips gained 163 points and two days after falling 143 points. The Standard & Poor's 500 Index ($INX) was off 9 points to 1,315, and the Nasdaq Composite Index ($COMPX) was down 24 points to 2,819.
Article continues below.
The Nasdaq-100 Index ($NDX) was off 19 points to 2,527. Apple (AAPL), the biggest influence on the index, was off $4 to $572.16 after reaching as high as $578.48. Dell (DELL) was up 30 cents to $12.28 after announcing it will start paying a quarterly dividend, probably 8 cents a share, in its fiscal third quarter. The shares reached as high as $12.59.
The market's pullback showed one more time how events outside the United States can affect domestic markets. The worries about the Greek election are building. Reuters reported that Greek's largest banks are seeing deposit outflows of $625 million to $1 billion a day because of fears that a Socialist government might return Greece to its old currency, the drachma.
Plus, there was the downgrade of Spanish debt by Egan-Jones. Italy's auction of 6.5 billion euros in 1-year bonds produced yields of 3.972%, up from 2.34% in May.
American Express (AXP) shares fell $1.38 to $55.10. Vice Chairman Edward Gilligan said at a conference in New York today that second-quarter billing growth through May was 9% to 10%, slower than in the first quarter.
A rising dollar against the euro in April and May was a big reason for the slowdown. The euro is up 1.7% against the dollar this month.
The government will report on initial jobless claims and consumer price inflation on Thursday. Futures trading suggests a soft open.
Utilities -- a safe haven for many -- lead the market
As the market slumped, utility stocks, prized for their dividends, emerged as the strongest sector. Nine of 10 sectors of the S&P 500 fell back on the day.
Financial stocks were fairly strong for most of the day, thanks in part to Dimon's testimony and question-and-answer session with the Senate Banking Committee today. Wells Fargo (WFC) was up 28 cents to $31.58. SunTrust Banks (STI) gained 32 cents to $22. But regional banks were lower, including Cullen/Frost Bankers (CFR), Huntington Bancshares (HBAN) and Zions Bancorp (ZION).
Retail stocks were slammed. Macy's (M), down $1.66 to $35.06, was the third-worst S&P 500 performer. Nike (NKE) and Urban Outfitters (URBN) were the fourth- and fifth-worst S&P performers. Also lower were housing stocks.
Crude oil moves lower; gold and copper move up
Crude oil (-CL) in New York settled down 70 cents to $82.62 a barrel. Brent crude in London was off 35 cents to $96.90 a barrel.
The retail price of regular unleaded gasoline fell to $3.539 a gallon from Tuesday's $3.542, according to AAA's Daily Fuel Gauge Report.
Gold (-GC) settled up $5.60 to $1,619.40 an ounce. Silver (-SI) was off slightly at $28.941 an ounce, while copper (-HG) rose slightly to $3.3395 a pound.
The dollar was lower against the euro and other major currencies. Interest rates fell. The 10-year Treasury yield was 1.599%, down from 1.661% on Tuesday.
| Energy prices -- New York close | ||||||||||||
| Wed. | Tues. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $82.62 | $83.32 | -4.52% | -16.40% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $2.6109 | $2.6215 | -3.41% | -10.41% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.1850 | $2.2320 | -9.79% | -26.90% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.6554 | $2.6502 | -2.47% | -0.08% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $97.13 | $97.25 | -4.65% | -9.55% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.5390 | $3.5420 | -2.24% | 8.03% | ||||||||
| (per gallon; AAA) | ||||||||||||
JPMorgan's Dimon concedes mistakes
JPMorgan Chase shares moved higher as CEO Jamie Dimon jousted with the Senate Banking Committee over the company's $2 billion-plus trading loss in a portfolio that was supposed to act as a hedge against big systemic events like the 2008-09 financial crisis or the eurozone crisis today.
Dimon did concede that a new risk model -- which was designed to help test the volatility of trading vehicles -- allowed too much risk and contributed to the loss, but, he reminded the committee, there were no depositor losses or losses to be borne by taxpayers.
In addition, Dimon admitted that the company provided inaccurate information about the size of the trade to regulators, arguing he didn't have good information, either.
He also said the company may demand that responsible executives may be forced to give back some or part of their bonuses once a final review of the problem is finished.
Shareholders have taken a hit. JPMorgan shares fell nearly 24% between May 10, the day Dimon announced the loss, and June 4, when they closed at $31. They're still off 15%.
The loss occurred in the company's Chief Investment Office in London. The company has changed management and fired a number of executives as a result.
This, however, was a hearing where Dimon emerged the clear winner. Republicans used the hearing to ask what regulations should be repealed or changed. Dimon said he preferred strong, simple regulation. Democrats worried the bank was too big.
Johnson & Johnson gains on upgrades
Johnson & Johnson (JNJ) gained $1.37 to $64.45. The health care company and Dow component said it received regulatory clearance to close its $19.7 billion bid for medical-device maker Synthes.
Analysts from J.P. Morgan, Jefferies & Co. and Raymond James Financial upgraded the stock to "buy," or equivalent ratings.
Facebook (FB) was off 13 cents to $27.27. The stock had been as high as $28.10. It rose 39 cents to $27.40 on Tuesday.
Seven of the 30 Dow stocks were higher today, led by Johnson & Johnson and JPMorgan Chase. Three were unchanged: Coca-Cola (KO), Pfizer (PFE) and AT&T (T).
The Dow laggard was American Express, followed by Home Depot (HD), off $1.27 to $50.97. The stock is off 3.6% from its 52-week high of $52.88, reached on May 3.
About 88 S&P 500 stocks were higher, led by Dell, Southwest Airlines (LUV) and Johnson & Johnson. First Solar (FSLR), WPX Energy (PPX) and Macy's were the laggards.
Dell, Seagate Technology (STX) and Green Mountain Coffee Roasters (GMCR) were the leaders of the Nasdaq-100, with Virgin Media (VMED) and Expedia (EXPE) the laggards.
| Short hits from the markets -- New York close | ||||||||||||
| Wed. | Tues. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0900% | 0.090% | 28.57% | 800.00% | ||||||||
| 5-year Treasury note | 0.708% | 0.747% | 5.51% | -14.70% | ||||||||
| 10-year Treasury note | 1.599% | 1.661% | 1.14% | -14.54% | ||||||||
| 30-year Treasury bond | 2.711% | 2.772% | 1.46% | -6.16% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 82.057 | 82.449 | -1.29% | 1.91% | ||||||||
| British pound | 1.5586 | 1.5576 | 1.12% | 0.31% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.642 | £0.642 | -1.11% | -0.31% | ||||||||
| Euro in dollars | $1.26 | $1.25 | 1.68% | -2.99% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.796 | € 0.799 | -1.66% | 3.08% | ||||||||
| U.S. $ in yen | 79.55 | 79.57 | 1.27% | 3.18% | ||||||||
| U.S. $ in Chinese | 6.35 | 6.37 | -0.43% | 0.44% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.976 | $0.975 | 0.83% | -0.47% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.025 | $1.026 | -0.83% | 0.46% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,619.40 | $1,613.80 | 3.53% | 3.36% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.340 | $3.336 | -0.77% | -2.81% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $28.9410 | $28.9490 | 4.27% | 3.68% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.1600 | $6.1600 | -4.31% | -5.63% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $5.9250 | $5.840 | 6.71% | -8.35% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.6926 | 0.6781 | -3.60% | -24.45% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.5420 | 1.5535 | -5.37% | -32.85% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $82.62 | $83.32 | -4.52% | -16.40% | ||||||||
| (per barrel) | ||||||||||||
230Comments
Jun 13, 2012 4:05PM
Businesses terminated the majority of people in 2007 to 2008. Both of those years Dubya was still in Office. In the years since, we have been held hostage by the Party of NO. Congress had the power and ability to remedy this but instead, a bunch of "career" GOP politicians made 'extraordinary gains' from inside trades and steerage on data they were privy to by position. Personally, I'd like to see a clean sweep of all GOP and Tea politicians this fall. Not advocating Democrats, but one party in a lit room with a specific agenda to recover repair revive and regulate, would suit me fine.
Jun 13, 2012 3:59PM
Jun 13, 2012 3:59PM
Jun 13, 2012 3:59PM
Jun 13, 2012 3:59PM
How about that . Socialist Merkel wants Germany to rule all of Europe without firing a shot. She just wants the final say in ALL budgets and gets to oversee everybody's banking policies. OR just get booted from the EU and suffer the consequences. Right up FRONT about it she is! Think they will buy it? When Eskimos buy ice. Given Europe's sordid history. they will be having snowball fights in hell before that happens
Jun 13, 2012 3:57PM
when the morons passed odummycare, businesses stopped hiring. as long as oblamea is in the white house, this country will be in a recession. his socialist stupidity don't work, look at europe. dummycrats think if you have a strong janitor, you'll have a strong company. typical of someone who never ran nothing but his big mouth......
Jun 13, 2012 3:57PM
Devine says,
The next election is about the future:
Your durn tooting it is. And I hope whoever is the next President, even if it is Obama again, that the two sides can start working together. That is the problem, poltical gridlock, not who is President.
That has been the problem for the past 5 administrations and if there isn't some dramatic change
soon the future doesn't look very bright.
Everyone talks about how many of our systems are broken or failing, tax, legal, educaton,
just about all of them. IMO, the real failure is the political system. It is the one that
is reponsible for legislation and regulations that control all of the systems of government.
An not all of the fault does not lie with one party or the other, it has been a shared responibility
for the past several administrations.
Its time to stop blaming one side or the other and work together.
Jun 13, 2012 3:55PM
The new normal: The proverbial "nobody knows anything"....... and, "death by a thousand cuts" (the latter like so many things these days a Chinese product). The only real constant and something we can count on day in and day out is incompetence, obfuscation, BS, and "the fault lies elsewhere" out of Obama and his unbelievably lame,clueless, inner circle and fellow travelers. Oh, yes, the arrogance is still there which is really surreal.
Jun 13, 2012 3:55PM
Another ho, hum day on the street.
I expect to see J P Morgan Chase implode or go belly up. Most if not all of the deposits they got from WaMu will be coming due in the next year or so. I doubt the depositors will leave them with JP. They were getting 4% or more from WaMu and Chase is only offering .7%. So, in addition to the 2+ billion dollar hole they have to fill, there will be a large outflow of money.
Anyone want to cover the bet?
Jun 13, 2012 3:53PM
Jun 13, 2012 3:52PM
Jun 13, 2012 3:50PM
What a lot of crapola. "The market is down because of European woes". They've been troting that one out for every down day. Give me a break! The market is down because it is violatile, and yesterday was a good day and the profit takers are out. The pattern is always the same. We would all do better playing the come bar on the craps table in Vegas. Why do these market wonks take us for such chumps.
Jun 13, 2012 3:50PM
In the latter part of 2008 I worked for Wells Fargo as a part time teller. Many depositors were coming in the bank to withdraw all their deposits. They were afraid the banks were going under and they would lose their money. They were running around like chickens with no head. In most cases we could not convince them to leave the money in the bank because of the depositors insurance would cover their money. Many of us wondered where did these people keep their twenty, thirty, fifty or more thousand dollars in cash. They did not understand if the banks AND the United States went bankrupt, their money would have no value. As countries began to use paper money instead of gold and silver coinage to represent money, the printing presses have rolled on and on. In our society we go more and more paperless except in the printing of money. What backs up the paper is up to you to decide. Is it gold and silver? Not really my dear, it is the good faith of the strength of a country's gnp that makes the paper worth anything. We get paid by check (paper) or direct deposit electronically. We spend the cash (paper) or debit or credit card (plastic). We pay our bills with a check (paper) or bank bill pay electronically or with a credit or debit card (Plastic). OMG money is but a figment of our imaginations, yet if we don't have a lot of this paper we can't purchase anything or pay for it. Crazy isn't it.
Jun 13, 2012 3:49PM
Jun 13, 2012 3:48PM
Jun 13, 2012 3:48PM
Jun 13, 2012 3:47PM
Jun 13, 2012 3:45PM
Jun 13, 2012 3:45PM
More Mitt-wittiness... he accused President Obama of the job losses and being against business. Actually Mitt... the job losses occurred from 2007 to 2008, two solidly Dubya years. As for being against business... the majority of us are fairly confident that job losses were done mainly so that various GOP initiatives would fall in line for the coming elections. Unfortunately, the brain trusts who thunk this one up didn't count on global impact because we weren't global when newt's contract with America was concocted. Execs who now make more than 500 times the workforce and lack of substance beyond the management platform are excellent reasons for a President to think poorly of business. This fall, I plan on voting for the Man who believes he can work with We the People on national recovery, not a Plan some man wrote a long time ago and has been crafting economic turmoil to seem like it magically contained future solutions.
Jun 13, 2012 3:44PM
Report
Are you sure you want to delete this comment?
RELATED ARTICLES
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
RECENT QUOTES
WATCHLIST
Sponsored by:
MARKET UPDATE
| NAME | LAST | CHANGE | % CHANGE | |
|---|---|---|---|---|
| There’s a problem getting this information right now. Please try again later. | ||||
[BRIEFING.COM] The three indices all trade with gains of no more than 0.2% with Dow maintaining its lead. Cyclical sectors have strengthened their gains in recent action as the financial sector sits atop the leaderboard. Although most growth-oriented groups trade in positive territory, technology and materials remain in the red.
Also of note, the Dow Jones Transportation Average is little changed after charging out of the gate. Nasdaq +2.09 at 3498.52... NYSE Adv/Dec 1385/1528... ... More
More Market News
Currencies
| NAME | LAST | CHANGE | % CHANGE |
|---|---|---|---|
| There’s a problem getting this information right now. Please try again later. | |||
Sponsored by:
LATEST MARKET DISPATCHES
- No more Dispatches; here's where to find market news
The Market Dispatches column has been discontinued. Here's where to find the latest stock and business news on MSN Money, and the latest from market writer Charley Blaine.
- Dow falls 59 as late-day gloom kills a rally
- Stocks held back by fiscal-cliff worries
- Stocks suffer worst weekly loss in 5 months
- Dow off 121 as post-election swoon continues
- Dow slumps 313 after Obama's re-election
- Dow jumps 133 as Americans head to the polls
TOP STOCKS
Analyst calls: Carnival downgraded
LeapFrog is initiated with an 'overweight,' and Beazer Homes is downgraded to 'neutral.'
