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.
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%|
|Heating oil (-HO)||$2.9554||$2.9621||-3.49%||1.41%|
|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; 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.|
|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%|
|U.S. Dollar Index||80.886||80.867||1.12%||0.45%|
|(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%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$85.09||$84.440||-1.33%||-13.90%|
Can you say Memorex? We are right back to 2008. No question, the Democrats deserve their due, they won the election. Right off the bat, the President feels he has a mandate on taxes and revenue and believes he should be able to implement them immediately; can't say I blame him. The majority, slight as it maybe, agree with the President on his proposal's and back him on having them go forward.
The Republicans do not appear to be willing to play ball (dah!). The country cannot have another impasse, we can't afford it. Republicans need to allow taxes rasied on the wealthy, get over it and get on with what the President wants. The sooner we get his policies in play, the sooner we will experience their results, good or bad. Looks like it's going to be more of the same but we have to deal with it. By February, they have to agree on rasing the Debt Ceiling, a must!. Jan 1, Obamacare kicks in and imposes a $20 billion tax increase on those who make more than $200,00 single & $250,000 joint filers.
It's apparent taxes will most definitely be raised, but this is what the people (half) want. Time to dig in folks, the sh**s about to hit the fan.
psyched...Tried to post earlier...Boinked.
Does the Gov/FED really pump the $40 bil in everymonth to mbs' ??
Or is that pumped up because of Politics and Media ?
I thought maybe that could be the Max if they needed it ?
And maybe sometimes maybe they only use....Say $20 billion, est.
I'm not really sure and am a little confused on that issue.
THE MESSIAH GOING TO SPEAK................TAKE "NO" QUESTIONS THEN OFF TO ASIA ON A GOLFING SUMMIT.........
(CNSNews.com) – A record 70.4 million people were enrolled in the Medicaid health care program for the poor in fiscal year 2011, according to government figures provided to CNSNews.com.
That figure equals about 22 percent of the population, which means there was one person on Medicaid for every 5 Americans in 2011.
An Unsustainable trend.
I'm gonna pee my self.....yeaaaaaaaaaa!
Where's Helen Thomas ???
NO, NO, NO, NO,.......Comrads, learn to play nice with the rest of the kids in the sandbox.
The problem we have now and have had the last 3-5 years is no one wants to trade their yellow shovel for a red bucket....
Instead we have nothing but BULLYS kicking sand in everyone's face...
And our Country has faltered worst because of it....IMO.
Our Leader is coming on TV to speak....Please, maybe we can all learn ??
Many Immigrants, use serving their Country in the Military as a fast track to Citizenship.
And many pay the "Ultimate Price".....It is by their choice...
Check the Sunday morning Talk Shows, usually ABC with George S., it's sad.
Make sure and take note of "surnames."
... and the Heartland and the South are conservative.
Isn't it funny how the people who pander to them are also responsible for hollowing those regions out?
Brutus........Kinda think your right about JFK, being from the Northeast...
But a little "footnote" to add to the cliff notes....Miss Lilly and I both think that is where...
George Herbert Walker Bush was from also....just sayin....shades of dek.
navy seal team being reprimanded for helping make video game.........seal team 6 gets blown up.....nothing happen's....4 americans murdered AND nothing will happen.........drive the nation to the brink bankruptcy they refraudulate the pos that'll do it in two years.........!
seals put life on line daily when asked but are refused the freedom to make money!
COMMUNIST DICTATORSHIP.........YOU THOIGHT BUSH WAS BAD!
BRUTUS...(did it in caps) Whether your opinion, of RoMONEY being a Moderate is true in your mind or the electorate...Really remains to be seen...Of course at this point; He will only be a couple footnotes in history...He has reached his limit in politics,and is finished.
I don't believe his voting base, could determine whether he was a moderate or conservative...?
The constant flip-flopping...And even remarks from his camp, up an too including his wife..Were disturbing sometimes...Apparently not only to people like myself, but strong GOP members and any Independants or Democrats moderates/conservatives that they may have tried to move to the plus column...
As far as the Mason-Dixon remark; Either you have spent little time South of it, have few relatives/friends there and probably never lived there...Maybe all three??
Mormonisn is still considered a Cult by many, of the bible thumpers that we are related to or know..
And some would have only voted for Romney if their preachers recommended it, they were die hard Repubs or lastly but not least...were racists. The latter swayed many.
Robme...Was a rich,elitist and a capitalist of the worst kind...He was right, when more or less saying he held little respect for the 47%....When in essence probably 60% had little respect for him, but were (some) forced to vote for him for various reasons...Even if they had to hold their noses.
The Republican Party...Put their eggs into the wrong basket...And they were wrong on the color.
Let's take a look at what's happening in our society. Truth be told, aside from the electoral vote, the popluar vote was very close, no mandate exists on any issue. Many would have you believe that the liberal Democratic point of view is "mainstream" and that the conservative Republican point of view is stuck in the '50's. That's the molded perception, and yes, perception is reality for those who see it that way.
For the party to be real, Republicans "must" remain true to their moral beliefs because that's who they are! If they try to conform to their counterpart just to get votes, then they lose everything they stand for. If a person or party cannot be true themselves, they are nothing. The Republican party, like it or not, has the moral foundation too support our society. Destroy that and what have we got?
The Republican stance "allows" those on the other side to dabble and experiment in social issues because they know, even though they oppose, the foundation remains solid. The liberal mentality is what's straying with this mindset of anything goes and they want you to believe this is "mainstream" and it's not. Take a good look at the elecotral map, the Liberal's live on the coast's and the Heartland and the South are conservative.
People have a free will and can live any way they choose, that 's their right. But for our society to conform to only one side or the other in my view is wrong, we need to leave our options open, because as we grow and learn, our values change.
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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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
Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.