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 4:53PM
avatar
Lets be clear about what is happening. A bunch of weallthy people are selling stocks to avoid paying extra taxes next year. At the same time they are driving the stock market down for all the average investors. They will then take all the profits made on their sales and buy the stocks back at the lower prices that they have manipulated downward and enjoy the ride back up. This is all about money and not about politics. They are taking advantage of the fears of people about their retirement funds and profiting off of them. Anyone who thinks that these are the people who will sacrifice anything to resolve our problems are deluding themselves. We just have to hope it will be an accidental benefit of a profitable investment. 
Nov 8, 2012 4:53PM
avatar

And down she goes!!! To all the folks that were stupid enough to vote for Obama ... especially the middle class watch your 401Ks and pensions hid the skids. I love it. I hope that you picked out a nice park bench to sleep on, and I hope that your kids are having fun watching daytime TV since it will be years before they ever find a job. I'm in my beachfront condo in Puerto Vallarta, enjoying the beautiful weather!!

 

POETIC JUSTICE ..... it's a beautuful thing.

Nov 8, 2012 4:51PM
avatar
Burn Country Burn, then everyone will realize its Obama and his progressive communist agenda, we just elected Elizabeth warren, McCaskille and this idiot in Florida, all nut jobs, america is safe in there hands. not
Nov 8, 2012 4:51PM
avatar
GRATES OF WRATH....Circa 2012.

Lenny: George, Can I have a bunny?
George: Nahhh, Lenny, what are you, stupid? Obama got back in....there aint no more bunnies.
Lenny: George, can I have some of your candy bar?
George:  damnit Lenny....What did I just say...Obama is back....I am not giving up any of My candy!
                WTF???? How dumb are you anyways?
(Long pause ensues)

Lenny; George, Can I have a bunny?
George:   Jeez Izzz... What did I just tell ya?  Obama Obama Obama Dadgummit!

Lenny:  George...does this Obama make bunnies and candy bars?
George: Lenny STFU.  I dont got time to explain politics to ya. Go to bed!

Now Retitled "CONVERSATIONS WITH REMARKABLE REPUBLICANS"
Coming soon to DVD.

Nov 8, 2012 4:49PM
avatar
Lady,

You need to go back to your BINDER
Nov 8, 2012 4:48PM
avatar
MSN still lies for the reason the market will drop. Its because Obama has been re-elected. Dod Frank, No Energy expansion, ObamaCare and Taxes on Dividents.
Nov 8, 2012 4:46PM
avatar

Classic, Hippies and liberals are Businesses best friend, by legalizing Marijuana the federal government can bring in about $100 billion a year in revenue without raising anybodies tax rates, it would open up entrepreneurial opportunities all over the nation for small businesses and create thousands of new jobs.

Universal Healthcare, would cut insurance costs in half, reducing the cost of doing business and maximize profits across the nation and make our businesses more competitive on the world market by reducing labor costs, Americans over spend by $800 billion per year on Healthcare and costs are expected to double over the next 25 years, if we don't fix it, it will sink us.

Nov 8, 2012 4:46PM
avatar

Fellow Democrats, please DO NOT hire nor work for any Republican. Destroy the enemy at any cost.

 

Thank you!

Nov 8, 2012 4:39PM
avatar
Hear Hear Mr DUFFY........

There, there Ms Lady. 

Nov 8, 2012 4:37PM
avatar
These people don't care that they voted for a short USA driven into being a 3rd world country, as long as they have someone else buying a Starbuck coffee for them and they can continue to use the 'free Obama phone' and EBT card. Next is mortgages and outstanding student loans paid for by the 'rich', meaning anyone that still has a job.
I moved all my 401K monies Tuesday into non risk areas, so I can ride this out. Too bad I'll earn nothing for +4 years. Four years from now you will have over 50% of the US population on some type of government assistance...imagine the direction of the votes then????

Nov 8, 2012 4:35PM
avatar

Time to kick the extremists out of your party, republicans.  When you can get the religious wackos and extreme social conservatives our of your party, you'll get the woman and some of the minority vote back.

 

Hell, I side with republicans on most fiscal issues, but their backwards social agenda keeps me going back to the democrats.  And write your damned congressperson and tell them that compromise gets things done.  Gridlock is NOT the answer.

Nov 8, 2012 4:34PM
avatar
OH Bahmaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Nov 8, 2012 4:33PM
avatar

So funny to see people wishing the country does bad. I cannot stand Obama, I was hoping for a good repub not no Nit.  I  couldn't stand when Bush won. When Bush did win I still never wanted to see the country fail. You people who want to see our country fail should please just leave.

 

avatar
I see all the white trash repubs are out in full force today, couldn't buy the election, now what?
Nov 8, 2012 4:33PM
avatar
Just one of the reasons recovery has been slow is that the a lot of members of congress had said they were going to veto or go against anything this president wanted or did.  That was before Obama's presidential term even began.  Most will agree (with a single digit rating) that our current congress can't seem to get anything done.  Even the Super Committee couldn't come up with anything - because they refused to agree on anything - to avoid the upcoming "Fiscal Cliff'.

Now, according to many of the posters on this forum, they wish to join the congress in their venture by opposing everything the President proposes, and prejudging everything he does.  The President represents the US but he is not the US.  So please don't complain about congress if you act the same way.
Nov 8, 2012 4:30PM
avatar
Only an idiot would invest in a market that is currently grossly over-valued!
Nov 8, 2012 4:29PM
avatar
Go on line to martial law and you can see for yourself that obama signed a executive order for martial law.  Look and see if you don't believe me. 
Nov 8, 2012 4:28PM
avatar
I hope the USA economy goes under.  To reelect this disaster is the nadir of the USA.
Nov 8, 2012 4:28PM
avatar

Thumbs down if you are concerned about AGW (Anthropogenic Global Warming).

Thumbs up if you are not concerned.

Nov 8, 2012 4:26PM
avatar
Republican funerals have been planned already. Time to execute them!
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. 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 Morningstar Inc.

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min
Sponsored by:

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The stock market welcomed the new trading week with a mixed session that saw relative strength among large-cap stocks, while high-beta names underperformed. The Dow Jones Industrial Average (+0.3%) and S&P 500 (-0.1%) finished near their flat lines, while the Nasdaq Composite and Russell 2000 both lost 1.1%.

Equities began the day on a cautious note amid continued concerns regarding the strength of the global economy. Over the weekend, China reported its first decline ... More


Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Sponsored by:

VIDEO ON MSN MONEY