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)










 

759Comments
Nov 8, 2012 9:10PM
avatar
I think Romney could have won with a spanish VP, he could of got the spanish vote, they weren't that happy with Obama, with the whole fast and furious thing. Also, more takers than makers are voting this president in. 
Nov 8, 2012 9:07PM
avatar

MikeeMike,

 

Did anyone say that Obama isn"t a liar

Nov 8, 2012 9:04PM
avatar
I am a retired phone company worker. I paid my union dues all those years. My health insurance premiums are going up from $583 a month to $781. But it's OK. My social security is going up 1 and 1/2 percent to adjust for inflation. Let's see 35% increase in my daily cost of living but 1 1/2% in social security. President Obama promised that my healthcare premiums would go down by $2500 a year. They have increase almost $3500 since the law was passed. Is he sure about that?
Nov 8, 2012 9:03PM
avatar
I'm buying right now. Go ahead and freak out. It always turns around again.
Nov 8, 2012 8:54PM
avatar

Unfortunately most people wont even want to hear this and think I am way out there but this is my personal opinion. Making America's Economy fail was all part of BO's plan from the start. He plans on creating a new BEAST of a Government with 10 other countries included. This is something backed up by most religions and written down several thousand years ago. Rev 17:17 is the start and is where we are right now. Unfortunately the 7 1/2 years to follow after this new government is formed the 10 kings from these governments turn on The New Babylon "Currently USA"  and BO and she is destroyed. Then comes judgment day. End of Story for Earth.

Nov 8, 2012 8:52PM
avatar
why does everybody think the stock market is the economy, it is a vampire to the economy, its sucking the life out of the middle class, its sucking the life out of the fed , and were paying for it , stock market be dammmed,  thats  right it time to lock up the vampires so they cant prey on the people anymore, the economy?  my you know what.
Nov 8, 2012 8:46PM
avatar
Republican crybabies are in a panic ... what else is new !
True Investors think long term not just for one week.
Look back on the 8 years President Clinton was in office.
Huge gain in the Stock Market.  Look back then at the 8 years
President Bush was in office.  Significant loss in the market.
Look finally at the 3 years and 10 months that President
Obama has been in office. Another significant gain !!  
Whatever happened to Buy Low Sell High ?  I believe that
if Romney had won, that you would see a Long Term loss,
that is, his exit in Jan 2017 would be at Market Levels below
his Jan 2013 entry point.  Democratic administrations have
in the last 100 years been MUCH BETTER for business
than Republican administrations !  Let history be your 
crystal ball . Let go of the Mitt myths if your smart.
Nov 8, 2012 8:45PM
avatar

Let me see, should I take my cap gains now at 15% rate on my profit or wait til next year when they are 23.8%?

Let me see, do I ask my boss to pay me my bonus by Dec 31 or wait til after Jan 1 and pay a much higher rate?

Can even the most socialist mind see where this is going?

Nov 8, 2012 8:39PM
avatar
It's not the healthcare part of the bill Koo, I'm all for national healthcare, I'm already paying for the emergency room freebies so that's a mute point. It's the other 1800 or so pages of the bill that you should be concerned with as it's loophole after loophole and a lot of it doesn't even have to do with healthcare and does nothing at all to control costs,which was promised to start with. They claim it will but there's nothing in it to enforce control. Read the bill, it's long and hasn't been read by most of Congress but there's a reason they won't consider putting themselves on it. Hmmmm, wonder what that is. Doesn't take a rocket scientist to figure that out.


avatar
Tax the rich more that will save us. What  a f-ing joke. The faster this economy tanks the better.
Nov 8, 2012 8:23PM
avatar

When the economy is worse 4 years from now than it is today, liberals will STILL be blaming Bush. 

 

 

Nov 8, 2012 8:21PM
avatar

Wall Street is a sore loser. They wanted the other guy, and didn't get him. So, now they are going to pull a Republican controlled Senate and sabotage the markets. Wall Street is going to sink the market, all because their guy didn't get their man elected.

I feel the same way about a dysfunctional government as I do about a dysfunctional Wall Street. You want to destroy everything? Go right ahead. Nothing has stopped you so far. Bring it on.

 

Until the people responsible for preventing, causing, creating, AND REPORTING ON, the worst financial collapse since the Great Depression are arrested, prosecuted and jailed nothing has changed. The game remains the same.

Nov 8, 2012 8:15PM
avatar
NASA has found a super earth. How about all the Fat Cats and repubs go and well see how long it takes till they come back crying about we need help we don't have any one to work for us!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Nov 8, 2012 8:11PM
avatar

Right wing guys & gals.... How do I put this?

You lost, Elvis has left the building,
the fat lady has sung, it's over, finished, finito,
busted, defunct, done, kaput, crushed, sunk, shot down in flames,
in the lurch, holding the bag, outta there, expired, scrapped, all wet,
wound down, shot in the ****, sprung, kicked the bucked, burned out, torpedoed,
crashed, hung out to dry, off a cliff, upstream without a paddle, dusted, collapsed,
scrogged, wiped out, wasted, trashed, washed up, bested, gone bye-bye, high and dry, struck down,
took a header, scuttled, fell on its sword, kissed the baby

and NOTHING you can say or do will ever change it.

Nov 8, 2012 8:07PM
avatar
HC said;
"not in they're UTOPIA........com-on classic; they want us to think like them!"

Think like them..................... Isn't that a contradiction of terms????
Nov 8, 2012 8:06PM
avatar
$50-$60 billion is about what the federal gov spends in a week...
Nov 8, 2012 8:06PM
avatar
Are you all dip $hits... for real... Blame the president???? who controls the money? Civics 101, the congress & senate. You all had your chance to change the face of the senate but no you had to support unelectable idiots! I'm sure the people that put up millions of dollars to support these dough balls are wounding was it worth it! When the republicans decide to quit pandering the far right as they did in the primaries maybe the moderates will come back. Until then you reap what you sow! Enjoy boys and girls. Wall Street only makes money when you idiots move your shares! I for one will not move any money... I will buy as the market moves down! If it melts the fat guys lose too. You really think they are going to risk their fortunes?
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[BRIEFING.COM] The stock market capped the trading week with losses across the major averages. The S&P 500 fell 0.5% to surrender its weekly gain, while the Dow Jones Industrial Average (-0.7%) and Russell 2000 (-0.9%) underperformed. The two indices posted respective losses of 0.8% and 0.6% for the week.

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