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 3:43PM
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Get ready  !!!! A day after Obamas election the main stream media is warning of a fiscal cliff !!! That means they are preparing the sheeple for the coming economic collapse !! They did not know this the day before the election ??? hahaha....  Get ready a big dollar collapse,gun grab, and martial law  is in your future  dont worry though FEMA is preparing your bed in the newly updated FEMA camps where you will be Re educated to like Socialism. Yes, this too will be another free program from your government  that will be MANDATORY !!!!!!!!!!  
Nov 8, 2012 3:41PM
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BREAKING NEWS  !!!

Legislation is being brought to the floor to ALLOW President Obama to run for a 3rd TERM.....

YES!!!!

OBAMA/CLINTON   2016
Nov 8, 2012 3:40PM
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Investor gain for the year will be gone by Friday night at the close!! Wall Street took its investors down again.
Nov 8, 2012 3:39PM
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I really thought this place was full of smart people but I realize that while they are criticizing the stock market for it being paranoid they themselves are becoming psychos
avatar
Since there is little doubt that these next 4 years will never be considered part of the Oduffus administration, maybe a law that would declare the next functioning economy to be affirmative actioned to Odinkus!
Nov 8, 2012 3:30PM
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You would have to be a democrat to believe it would go up!
Nov 8, 2012 3:26PM
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Grey Ghost000
I just heard 4 million republicans didn't vote!
-------------------------------------------------------------------
Oh they voted alright... just not for your guy....
Nov 8, 2012 3:22PM
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Its been 9 years since Mcdonalds sales have decreased. does that mean people are starting to eat healthy? that's a good thing, but bad for the stocks. to bad wall street, hopefully Barrack will have some time to sick the dogs on you crooks. Make you cry baby's pay for the congratulations you gave him with that huge drop in the stock market. pay backs a b!&$$ 
Nov 8, 2012 3:22PM
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No surprise the wealthy cashing in their stocks to avoid higher taxes in January... They will be back and the market will rise again as it has under President Obama and sunk like a ship full of rats under President Bush. Hang in there for the long term also the Republicans will be forced to work with the Democrats in solving the fiscal cliff problem as well without getting into detail, except that the American public will demand it and now that the President has been reelected the politics will be set aside and they will work together and start spending the war chest on creating jobs , debt reduction and other common sense issues

Nov 8, 2012 3:22PM
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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 3:17PM
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Too bad all of you repukicians couldn't get your "majority of stupidity" to out vote us true Americans. Hope someday that besides fighting any fair play in America, you actually become an American.
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 3:12PM
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Anybody with any sense (and if I can get the attention of those who watch/worship Fox "news"), knows you look for market corrections to get into a stock you watch.  That time is now and the time to take advantage of the market.  Too many of you for the past almost 4 years have looked at every decline in the Dow as the beginning of the end..................You know the story about the boy who cried "wolf"....well that's you in a nutshell.  Get a life and the next time you wake up in the moring with a headache don't immediately think you're dying.  Chill out, enjoy life and be positive.
Nov 8, 2012 3:11PM
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What??? The stock market actually coupled to the reality of the collapse of the real world? Well this certainly means we are not saved. Too bad ol' Misfit Mitt wasn't elected, then we would be saved.
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 3:11PM
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Actually that is why I voted for Obama.  I want to see you conservatives lose everything and groval at the feet of Obama to help you.
Nov 8, 2012 3:11PM
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2016 & 2020 have been decided!

 

CHRIS VAN HOLLEN & ELIZABETH WARREN IS AMERICA'S CLEAR CHOICE!

 

God bless America!

Nov 8, 2012 3:09PM
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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 3:06PM
avatar

I'm not sure what gay people were thinking about when they were fighting for the right to get married. I mean only half of adults are married anymore and half of them end in divorce. Looks like being immune as in "Sorry sweetie we can't get married because of the law" would have been pretty sweet. Something tells me that when they get to experience the bliss of litigated companionship they will be wishful for the good ole days........ a little tax break won't go far after you loose half your 401k.

 

Anyway --- Congratulations to the democrats for their win....... Maybe we can figure out how to get you next time.

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[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.

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