Dow off 121 as post-election swoon continues

Investors worry about the economy, the fiscal cliff and Europe. Disney and Nordstrom earnings disappoint. Apple continues its slide since September. McDonald's monthly sales fall for the first time in 9 years. Gold and crude oil move higher.

By Charley Blaine Nov 8, 2012 2:23PM
Charley BlaineUpdated: 10:40 p.m. ET

Stocks finished at their lowest levels since the summer today as another slide in Apple (AAPL) shares pulled tech stocks lower and McDonald's (MCD) reported a surprising decline in October sales.

Apple was down $20.25 to $537.75, its seventh loss in the last 11 days, on worries that production problems are limiting iPhone 5 availability. There's talk investors are starting to ask what the company's next big wonder product might be. McDonald's was off $1.73 to $85.13 and was the biggest weight on the Dow Jones Industrial Average ($INDU), which fell for the second day in a row.

The major indexes all ended the day below their 200-day moving averages, which are key indicators of investor confidence.

After the close, shares of Walt Disney (DIS) were off 97 cents to $49.07. The company reported fiscal-fourth-quarter earnings of 68 cents a share, up from 59 cents a year ago and in line with Street estimates. Revenue of $10.78 billion, up from $10.43 billion, missed the Street estimate of $10.92 billion. Nordstrom (JWN) shares also were falling after hours as earnings of 71 cents a share missed the Street estimate of 72 cents.

The Dow closed down 121 points to 12,811, its lowest close since July 25. The Standard & Poor's 500 Index ($INX) was off 17 points to 1,378, its lowest close since Aug. 2. The close for the Nasdaq Composite Index ($COMPX) was 2,896, down 42 points, and its lowest close since July 23. The Nasdaq-100 Index ($NDX), heavily influenced by Apple, was down 40 points to 2,573.

Article continues below.
McDonald's said same-store sales fell 1.8% in October, as consumers flocked to rivals, including Burger King (BKW), which has been revamping its menus. The company said sales were down 2.2% in the U.S. and Europe. Sales fell 2.4% in its Asia Pacific, Middle East and Africa region. McDonald's contributed more than 13 points to the Dow's loss by itself. Half of the Dow's loss came from declines in McDonald's, United Technologies (UTX), Caterpillar (CAT), Home Depot (HD) and Chevron (CVX).

The Dow has fallen 434 points in two days. That's its worst two-day loss since the blue chips fell 573 points on Oct. 31-Nov. 1, 2011.

The euro's fall hurts U.S. stocks; oil and gold rise
The euro fell to a two-month low against the dollar after the European Central Bank held interest rates at a record low and said the eurozone economy showed little sign of recovering before year-end.

In addition, a European Union official said a decision on unlocking funds for Greece may not be made until late November. European stocks closed lower. A falling euro (or a rising dollar) makes U.S. exports less competitive.

Crude oil (-CL) in New York settled up 65 cents to $85.09 a  barrel today. Gold (-GC) settled up $12 to $1,724.20 an ounce.

The 10-year Treasury yield was 1.632%, unchanged from Wednesday.

Energy prices -- New York close



Thur.     Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$85.09

$84.44

-1.33%

-13.90%
(per barrel)











Heating oil (-HO)

$2.9554

$2.9621

-3.49%

1.41%
(per gallon)











Natural gas (-NG)

$3.6080

$3.5780

-2.28%

20.71%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6073

$2.5889

-0.87%

-1.89%
(per gallon)











Brent crude 

$107.25

$106.82

1.49%

-0.12%
(per barrel)











Retail gasoline

$3.4640

$3.4620

-1.62%

5.74%
(per gallon; AAA)












A nervous market
Investors were probably a little punchy after stocks suffered their worst one-day losses in nearly a year with the Dow's 313-point drop on Wednesday. 

The sell-off was due in part to President Obama's re-election and the uncertainty because of the so-called "fiscal cliff" -- the combination of tax hikes and spending cuts that will kick in starting Jan. 1 unless Congress and the White House can agree on changes.

The fiscal cliff would drive the U.S. economy back into recession next year and result in a jump in the jobless rate to 9.1% by the end of 2013, a new report from the Congressional Budget Office said.

The CBO,  the independent budget arm of Congress, said economic output would drop by 0.5% in 2013 without action. But the CBO added the U.S. economy would in the longer run return to better growth rates and lower employment, with the U.S. unemployment dropping perhaps to 5.5% by 2020, The Wall Street Journal noted.

In addition, worries are deepening about economic woes in Europe. Germany's economy is starting to slow down, and political tensions were high in Greece after its parliament agreed to new austerity measures.

The Dow and S&P 500 are off roughly 6% since a market peak in mid-September. The Nasdaq has fallen 9.1% since Sept. 14, when it closed at a 2012 high of 3,184.

If the fiscal cliff takes effect, it will result in an increase in tax rates on dividends.

Because of that potential, Leggett & Platt (LEG), which makes components used in bedding and furniture, accelerated the payment of its fourth-quarter dividend of 29 cents a share to Dec. 10 to qualify for 2012 tax rates. Leggett & Platt was down 17 cents to $26.84.

Lastly, the third-quarter earnings season has produced profits that have met estimates for the most part. Revenues for S&P 500 companies are beating estimates less than 40% of the time, instead of the usual 62%. Part of that is due to slowing non-U.S. business and the dollar's depressing effect on international revenue. If the dollar rises, the value of non-U.S. revenue falls.

The Apple effect on markets
The peaks for the major averages appear to  tracking with Apple's tumble from an all-time closing high of $702.10 on Sept. 19 and a record intraday high of $705.07 on Sept. 21.

The reason to concentrate on Apple is that it is the world's most valuable company, and it has shed about $143 billion in market capitalization as the stock has slid more than 22% since those September highs. Apple represents about 17% of the market capitalization of the Nasdaq-100 and 4% of the S&P 500.

There are lots of reasons why Apple has fallen so much. The stock was up 73% for the year at its peak. By a number of measures, the shares were overbought, and it's vulnerable to violent moves because it is the largest holding of many of the biggest hedge funds. If they start to sell, bad things can happen quickly.

It is possible that Apple is nearing a bottom. Its 14-day relative strength index was below 22 today. The index measures a stock's momentum. A reading below 30 implies a stock is oversold. A reading above 70 suggests a stock is overbought and nearing a pullback.

Another broad slump
Only four of the 30 Dow stocks were higher today: Bank of America (BAC), Boeing (BA), Hewlett-Packard (HPQ) and Travelers Companies (TRV). The laggards were Cisco Systems (CSCO) and McDonald's.

In addition, only 146 S&P 500 stocks were higher, along with 194 Nasdaq-100 stocks.

Chipmaker Qualcomm (QCOM, Century Link (CTL) and Verisign (VRSN) were the S&P 500 leaders. Qualcomm's fiscal-fourth-quarter earnings beat Street estimates, thanks to an explosion in demand for smartphones. It boosted its first-quarter guidance.

Verisign and Qualcomm were also the top Nasdaq-100 stocks. Whole Foods Market (WFM) and SanDisk (SNDK) were the laggards.

Whole Foods, down $5.62 to $90.31, offered lower-than-expected guidance for the fiscal first quarter. Results will be hurt by disruptions to its operations in the Northeast by Superstorm Sandy.

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.100%

-18.18%

800.00%
5-year Treasury note 

0.643%

0.662%

-10.07%

-22.53%
10-year Treasury note

1.632%

1.632%

-3.20%

-12.77%
30-year Treasury bond

2.769%

2.821%

-2.88%

-4.15%
Currencies











U.S. Dollar Index

80.886

80.867

1.12%

0.45%
British pound

1.5990

1.5990

-0.91%

2.91%
(in U.S. $)

 








U.S. $ in pounds

£0.625

£0.625

0.92%

-2.83%
Euro in dollars

$1.28

$1.28

-1.63%

-1.59%
(in U.S. $)

 








U.S. $ in euros

€ 0.784

€ 0.783

1.66%

1.62%
U.S. $ in yen 

79.41

79.95

-0.49%

2.99%
U.S. $ in Chinese

6.26

6.24

0.48%

-0.98%
yuan











Canada dollar

$1.000

$1.004

-0.02%

1.95%
(in U.S. $)

 








U.S. dollar 

$1.000

$0.996

0.02%

-1.98%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,726.00

$1,714.000

0.40%

10.16%
(per troy ounce)

 








Copper (-HG)

$3.470

$3.442

-1.36%

0.97%
(per pound)

 








Silver (-SI)

$32.2400

$31.661

-0.24%

15.49%
(per troy ounce)

 








Wheat (-ZW)

$9.0250

$8.940

4.40%

38.26%
(per bushel)

 








Corn (-ZC)

$7.4125

$7.443

-1.92%

14.66%
(per bushel)

 








Cotton 

$0.6926

$0.698

-1.16%

-24.45%
(per pound)

 








Coffee

$1.5140

$1.512

-2.10%

-34.07%
(per pound)

 








Crude oil (-CL)

$85.09

$84.440

-1.33%

-13.90%
(per barrel)










 

773Comments
Nov 8, 2012 2:40PM
avatar
I am so TOTALLY shocked....as is the rest of the nation. HAAHHAHA.  What a joke.  You liberals  made your bed.  Watch our country swirl down the toilet now. 
Nov 8, 2012 2:41PM
avatar

Hope and Change? Forward? How can the level of unemployment, negative GPD growth (when you take into account inflation, which is grossly understated),  ridiculous environmental regualtions, and the absurd size of governemnt be called "progress"? Maybe it is time for a revolution. The lazy pieces of   %#IT that continue to suck off of society, and continue to be able to vote, can all be shipped off to a reservation, like our ancestors did with the Indians. Obama, the one who hates and is embarrased by America, is turning me into a hater too.

We used to be united and stand for a common goal. This administration has so divided this nation it is unbelievable.

Nov 8, 2012 2:54PM
avatar

Who ever voted for the President, I hope you are happy with what will happen over the next 4 years!

Look at our economy every year from the date you voted for him and then see what you have done.

Thank all of you for the lack of work for the middle class.

Nov 8, 2012 2:41PM
avatar
Well I dumped it all yesterday, not a good feeling but after all the LIB's voted the IDIOT in AGAIN! Had to do it, too old to wait for the recovery which won't start for at least 4 more years! 
Nov 8, 2012 2:45PM
avatar

In 4 years our debt will be between $20+ Trillion.  China will own much of the Companies it can get its hands on.  Most high end real estate in my area is being purchased by smart Asian investors from China.  I wonder what percenage of the DOW, S&P500 and Nasdaq will be owned by foreign investors in 4 years? 

Nov 8, 2012 2:48PM
avatar

After 2016 Obama can still retain the President through martial law.  Don't believe me read up on it and you will see. He is assembling a  police force now called the TSA.  He has control over. People of color all they want someone to give them something for free. We have become a gimmie nation. 47% of the population get something now, whats going to happen when there is more wanting and less people working to pay for it? Borrow more more money from China!! They will see the light and quit buying our bonds and the USA will tank.  #1 country will be reduced to 3rd or 4th!!!

avatar

The markets are tanking just as expected before the election.

Obama win= market lower and more job loss.

Romney win= market will soar and job will be created.

Be sure to keep this post and prove me wrong.

 

I posted this just a few weeks ago

Original post above.

 

New post below.

 

Told You.

Nov 8, 2012 2:43PM
avatar

No worries about the economy!

Having legalized recreational marihuana will make us happy! Naked and hungry but nevertheless happy!

Nov 8, 2012 3:22PM
avatar
I just heard 4 million republicans didn't vote! if they had Odumbo would be out!
these people are just as big retards as the left who voted for Obama again!
worst president ever! and I see all the bias media is still talking about Romney
and the republican party! Hey your boy won! talk about his record! talk about all
the promises he made again! talk about fast n furious! talk about libya! talk about
the job numbers! talk about the stimulus that didn't work! talk about your boy Obama!
this ain't Bush's economy anymore! so you blamed Bush now blame Obama!

Nov 8, 2012 3:09PM
avatar
Forget about any recovery nonsense.  No housing recovery, no jobs recovery.  The planned demise of the Working Middle Class and the American system is firmly in place now.  The  flexibility is now available to step down the American economy, destroy the American dream, and join the  third world economies.  I doubt most of those who voted for this POTUS even have a clue of what he has in store for them but the NEW WORLD ORDER is on track and will accelerate.  If you attempted to explain what the goal is to a liberal they would deny, call you names, and revert to the angry posture their leader led them to. I am sure the mentality of many Germans in the 30"s was similar to what we are seeing today.  They have no clue and are but cannon fodder to the goals of a natural born foriegn raised socialist who wants to join the ranks of Chavez, Castro, Putin and the other billionaire despots hiding behind their fake concern for the poor in the countries they rule.  Who in their right mind would consider starting and running a business in America today.  If you have a novel idea or product it will be m****duced in Asia or copied and produced with illegal labor in our own backyard.  And on the other end you will be taxed to death and forced to pay for the lifestyles of indiviuals who hate successful business people and those working to make a living for themselves and their families.  I believe we see a market in the 7,000 range before we see 14,000.  Good ridance to stability and growth and American success. 
Nov 8, 2012 2:44PM
avatar
Nah, this drop of almost 3% so far this week, just after the election has NOTHING to do with the election...Gee, what flavor Kool-aid is this anyway?
Nov 8, 2012 2:40PM
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Sorros tanks stocks and buys gun stocks and gold... ... ...

Market blames Bush a video and birth control... ...
Nov 8, 2012 3:14PM
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The slump is due to the Financial Cliff that we are falling over because the POTUS would not deal across the aisle the first term of office.  Instead, chose to be a LIBTARD instead of a Moderate.  Clinton learned but I doubt if this LIBTARD has the brains.
Nov 8, 2012 2:53PM
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i pulled all my money out of the stock market i advise all others too do the same , obama will get your money
Nov 8, 2012 2:47PM
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Now we get to see if Ben continues to pump in billions a day, or will the correction in the market bubble be allowed to continue now that the election has passed.
Nov 8, 2012 2:43PM
avatar
BUT, I had to luagh some LIBATURD, stated no because of the IDIOT getting re-elected just a natural correction! Yeah correcting! I had to correct before NOBAMA's policy kick in!!
Nov 8, 2012 3:58PM
avatar
Soon, even the liberals who voted for Obama will have buyers remorse and realize this guy is ruining our country.  Unfortunately it's probably too late...
Nov 8, 2012 4:03PM
avatar
I predict the next great depression in the next four years and it can all be blamed on the progressive movement ( Obama and his various supporters).
Nov 8, 2012 5:41PM
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