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 9, 2012 7:43AM
avatar
Too late to turn back now....Barry is ruining (whoops!  i mean running) the country for 4 more years.  Dont worry about a 2016 election, there wont be a need, if theres even still a country left at that point.  I will laugh when you idiots start dying off one by one when the famines and terrorism start hitting.  We have been preparing, the liberals have been busy making fun of us, and not doing any preparing, so they will just die.... c ya!
Nov 9, 2012 7:43AM
avatar
The turn-out for Gary Johnson was both encouraging and disappointing.  He did set a record for most votes ever for a Libertarian candidate with 1.2 million.  However, most pollsters and others were expecting him to claim closer to 3-4% of the vote, instead of the 1% he got.  Moving forward, I think it would be wise to nominate Johnson again in 2016, because he's a solid candidate with serious credentials.  Plus, it would be a shame to waste the name recognition he's built up over the last couple of years.  I think Johnson should have an excellent shot at coming close to the 5% threshold in 2016 with no incumbents in the race.

Nov 9, 2012 7:26AM
avatar
Polititians, lawyers, and insurance salesman, the 3 biggest groups of overpaid liars ever! Burn in hell s****in naval lint!!
Nov 9, 2012 7:15AM
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Time tells all tales. The people would be better off working for a living and learning skills. Government hand outs are becoming a way of life for too many. A very pretty young girl 23 and her boy friend were living in a tent on BLM land. She had a big scratch on her face. My wife and I asked her if she was O.K. and could we help. The temperature was 22 degrees F. the night before. We tried to tell them this was not a normal fall. She said they were fine be because they had food stamps. It snowed over 6 inches last night with temperatures in the low twenties. Food stamps are a false sense of security. Many young believe America is an auction and not a democracy. The seniors got a 1.7% raise, the young are being misled and middle class Americans are being being crushed financially. More of the same promised and that won the election. How Sad.
Nov 9, 2012 3:04AM
avatar
SORRY REPUBLICANS --- But your establishment candidate strategy is a loser.  You will be extinguished or embrace liberty (smaller government).  Thinking that fairness can be dictated is another delusion for the pawns of the progressive control freaks.

RON PAUL is a growing martyr and the libertarian movement continues to grow and will carry the future.  The election of Barack Obama will help push the reality of the consequences of personality based voting onto the electorate.  After our freedoms are further eroded, the correcting backlash will  finally exterminate the progressive cancer for at least a few generations.

ARM AND PRACTICE - We are ultimately free of anything Washington attempts as long as we are prepared for sacrificing our lives for liberty (the ultimate control freak therapy)
Nov 9, 2012 3:01AM
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Typical investors...crying because they didn't get their way... the rich are such spoiled brats
Nov 9, 2012 2:27AM
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If you believe in Divine Providence,
and that God is guiding the country, maybe God voted for Obama.





Nov 9, 2012 1:47AM
avatar

Send the "drones".....did one got shot on!  WEE are **** as a nation allowing that and as Liba fiasco it now coming out and more will.  Go ahead you MSNBC crap pundits.  Delete this again. You have asked for it and now you got it!  Stop with the market "churning" as it is now becoming your own worst enemy with this jerk in office.  Go ahead and delete me, again.  Worthless jerks.

Nov 9, 2012 1:30AM
avatar
the second term that the president will do is   illustrated in his mind he will go step by step with the obstetrical that he face from his political performance the biggest beneficiary will be the hard working peoples not the rich not the entepanurs and not the peoples that exchange paper with each other to make money with out contribution to society he will challenge difficulty's he will take bigger risks that peoples will get fear of it but he will get to  his destination his god is strong he put him in this higher position from no wear and i believe that he don't let him down 
Nov 9, 2012 1:11AM
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Bill, how is Obama responsible for higher food prices?  Energy prices are less that they were din the summer of 2008, when gas was about 4/gallon and oil was over $120.  And what exactly makes you expect the higher taxes for everyone are imminent?  Certainly we can expect that payroll taxes will likely return to their former levels, and the tax credits Obama has signed will likely end.  The 1500 education credit and making work pay.. those credits may go.
Nov 9, 2012 1:07AM
avatar

@ 1 Classic Lady.

 

Your mouth runs more than a Whipoorwill's a** in berry season. Get a life or some friends, somebody you can talk to.

Nov 9, 2012 1:05AM
avatar

Classic:  Is that "Obamazombie" look anything like the look I get when I ask what freedoms Obama has taken?

 

Or what he's done to take guns away?

 

Or what socialism/communism is and how he is a socialist?  The only example of the state taking ownership in a private enterprise is GM, where the government was notably hands off in the actual operation.  Enough to actually earn a letter of apology from The Economist.

Nov 9, 2012 1:04AM
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Millionaires stealing from Millionaires, God I love the Stock Market, and computer trading with the new, how to lose your bu^^ programmed right in.
Nov 9, 2012 1:03AM
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So happy that 51% of my brothers and sisters voted for four more years of no growth, high unemployment, and high energy and food prices.  Now we can add higher taxes and more debt to our future.  Beautiful.   
Nov 9, 2012 12:57AM
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What's the matter classic, your ranting like a scorned woman, it's not like your party was rejected in a landslide election by 100 electoral votes, or was it ? To bad, so sad. Republicans can't add more regulation, more spending and more borrowing for 4 more years, when they can try to trick America again. Everyone but you and the Poverty Belt have stopped buying their lies, borrow spend and debase America, drive us off the fiscal cliff, the Republican Taliban wants to rule from the pulpit  and has declared war on woman, Minorities, Gays and all Americans who work for a pay check. The GOP's Burned all their bridges losing more Senate seats and alienating a Nation.
Nov 9, 2012 12:38AM
avatar
You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
Know when to RUN!!  Yes its time to RUN!!!!
Nov 9, 2012 12:21AM
Nov 9, 2012 12:21AM
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chriscc, I have never accepted a dime from the government, I'm very succesfull and i'm half native american and also
Nov 9, 2012 12:06AM
avatar
REMEMBER WHAT YOU DEMS HAVE DONE TO THE  AMERICAN PEOPLE ????
NOW IT IS OUR TURN TO TORMENT  YOU AND YOUR SOCIALIST HANDLERS
---------------------------------------------
WHAT PART OF NO POWER DO YOU NOT UNDERSTAND?????????

YOU WERE REGURGITATED......BY THE AMERICAN PEOPLE.........AT THIS TIME IN HISTORY, YOU AND YOUR KIND HAVE NO VOICE,,,,,,,,,,,,NO POWER,,,,,,,,,,,,AND ARE ON YOUR WAY OUT........
THE SUPREME COURT WILL BE SET FOR THE REST OF YOUR LIFE...........DEAL WITH IT.......BE AN AMERICAN..............

OVER AND OUT.....A FOOTBALL GAME IS AWAITING ME.....
Nov 8, 2012 11:53PM
avatar

CLASSIC LADY,

ELECTIONS ARE DECIDED BY THE WILL OF THE PEOPLE !!!!   THE AMERICAN PEOPLE HAVE DECIDED......ACCEPT IT.!!!!   .....WE CAN NO LONGER STAND BY AND LET THE CLASSIC LADY'S OF THIS COUNTRY TRY TO DESTROY THE WILL OF THE PEOPLE,.....!!!!!!!!!!!!!

YOU ARE THE MINORITY.....!!!!!!!       YOU HAVE BEEN OUT VOTED.......ACT LIKE YOU HAVE SOME KIND OF PATRIOTISM........ACT LIKE YOU HAVE CLASS..........

RESPECT THE VOTE OF YOUR FELLOW AMERICAN'S   !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

AGAIN IN YOUR HONOR CLASSIC LADY .....I TYPED ALL IN CAPS..

GOOD NIGHT, I AM OUT OF HERE......


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[BRIEFING.COM] The major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.

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