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)










 

773Comments
Nov 8, 2012 6:42PM
avatar
For all you delusioned investors out there start thinking of investing in companies that produce guns and ammo..................
Nov 8, 2012 6:38PM
avatar

What's really telling about these rightwingnut posters is their collective claim that Obama is a puppet of Wall Street. Now talk about hilarious infantile redactive thinking, or lack of it. You rightwing nuts are the puppets of Wall Street, you worship money and especially those who have lots of it. You salivate at your collective fantasy that someday, just like ole Mitt promised, you'll all be millionaires as well. And yet, now you claim Obama is in the CEO's pockets. If that is actually the case, then you should be rejoicing, singing from every mountain top, since that is what ole Willard and his billionaire CEO buddies are all about, Wall Street.

Oh BTW, anyone with even half a financial brain will be right back next week buying shares and taking advantage of these minor bargains. I sure as hell will regardless of who is in the White House. Oh yeah, my 401 plan has literally doubled since Obama took office. And yet, how can that be? 

Nov 8, 2012 6:37PM
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Yeah, fellow Blogmericans, its been swell once again.
I shall now depart to get some Real Work done.
Again, CONGRATS TO MY BRETHREN, LOVERS OF FREEDOM.

As to the remainder,  while you are busy sitting around all
nervous in your room full of rocking chairs and licking your crotches,...

No need to thank us...We saved you from yourselves, and all we
ask is the opportunity for all of us to forgive, forget and forge a new
Tomorrow,  everyone included who so desires.  Thats it.

Ciao! .........and..................

CHRIS VAN HOLLEN & ELIZABETH WARREN 2016. (If you know
whats good for you)



Nov 8, 2012 6:37PM
avatar

Threatened unknown amount of Cap Gains tax coupled with NO known real tax cuts equals a trend???????????

Worth a thought.

Nov 8, 2012 6:36PM
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I expected the Bad News to begin after election day. Like the price of gas dropping  just before the election. Well now the flood of bad news!!!! Huge Deficits Federal and State, Higher Inflation, More Job losses this Winter. Higher Energy Prices and Higher Food Prices. Things will get steadily worse!!! Wait till the big Liberal States like Calif. jack up Taxes and begin to slide into depression era levels of Unemployment. It was a Great Country Founded on Great Principles and Destroyed starting with FDR and the """New Deal?? The new deal is third world poverty and hunger for all.
Nov 8, 2012 6:33PM
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Why do I get the impession that the likes of you little whiny white males are throwing a little tantrum that

you can't use your little short term profits because of a non-Romney win.. Go ahead you little men whiners.  Throw your equities away and let some real women enter the market and ride the next wave.

Your ridiculous little tirade is laughable.

 

No Fear!  Happy birthday to me....I can get some Apple now.... 

Nov 8, 2012 6:33PM
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One more thing before I go and enjoy some spirits....Do not blame this on Europe, China, oil, your ugly mother in law or anyone else...This is all the socialist, arrogant, incompetent, lying, community organizer's fault, nobody else. Now, if you are an ignorant liberal, of course you will be blaming someone or something else....Oh well, have to be back here early tomorrow.
Nov 8, 2012 6:28PM
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CGT again...with the 20/500 Hindsight.  Ha ha ha ha....
Nov 8, 2012 6:26PM
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Based on the last four years performance, if Obama hadn't been president the market would be around 18,000 right? Think about it.
Nov 8, 2012 6:25PM
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What happened today on Wall Street...Here it goes, pay attention....The Obummer selloff continued, as simple as that....People, presidents do not move markets in the long run, they can do in the short run, anything can move markets in the short run; Wall Street is an emotional entity, face it...You should see the disappointment here when inept got reelected; the markets do not trust this socialist to deal with the fiscal cliff or the economy; he had 4 years and did nothing, how can anyone convince Wall Street that the next 4 will be any different...And please don't let some fool tell you that this idiot is not here to please Wall Street; well, you mess with Wall Street you mess with the American people, at least the ones that are employed and taking care of all the freeloaders....Everyone's 401k, 403b, IRAs, 457, non-qual. accounts, etc took a major hit these last 2 days...Unless you were invested 100% in bonds you lost a boat load of money...Now, manipulators made a boat load without having to do much, that's a story for another day...We hope this losing streak is over tomorrow, guess what? Tomorrow is friday, not our favorite day down here unfortunately but, maybe the investment gods will be with us...We warned you of all of this remember? Romney DOW 15,000, Obummer, down the crapper....At least for the short run. So sad.

Nov 8, 2012 6:23PM
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What's truly so bizarre about this Republican minority in America today is that they've allowed themselves to be devolved from a once great political party of fiscal and financial responsibility into a lunatic fringe group of gullible bible-mongering, hate filled, frothing at the mouth band of rightwingnuts. These pea brains actually thought that a MAN OF BAD BUSINESS, a puppet of BILLIONAIRES who could in reality care less about your well-being and future, would ever make it into the Whitehouse. America is much smarter, they've wised up and understand the relentless, endless revisionist and manipulative tactics of the far right. The sad part is that the rightwingnuts are so fundamentally mired down by their own hatreds and darkness that they don't even see what puppets they are. As if these billionaires and corporate CEO's give a SH*T about you and your families. UTTER FOOLS. 
Nov 8, 2012 6:23PM
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Well looks like the n@@@@@  is taking us to the wood shed.  OH sorry it is a black man in the lumber business.  Either way you idiots voted for this idiot.  The smart ones like myself moved there money before the election to cash.  Might be 3.5% but much better than losing it.

How many of you idiot democraps did anything?  Answer none because you ate the mushrooms this loser was selling AGAIN.....

You deserve what you are getting.

Nov 8, 2012 6:17PM
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Obama will get the market to 2008 lows faster than Obama can say "it's Bush's fault"
Nov 8, 2012 6:15PM
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Did everyone see the Red-Blue Map ,Obama has a mandate in Big Cities only.Looks like the rest of the Nation was pretty much RED.

GIGANTATHON...I guess you missed Colbert (or one of those shows) where the R's got mad,
because they figured their red patches,  consisting of lots of crops, cattle and sheep,  were
grossly under-estimated?  

The line was, " Why dont they measure the election based on square footage?"  Ha ha ha...

I say,  No, they counted the Sheeple, MR G.  The People Won.

Try to get past it and let us reason together.
Nov 8, 2012 6:14PM
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Service Corporation International, the world's largest chain of funeral homes...  

A stock to consider......   STRONG BUY

A major Rapture is upon Us....!!!!!    Float Up Wing Nuts!!!! Float Up!!!!   
Nov 8, 2012 6:13PM
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Idiots it's over Obama won.

 

Time to work over Congress.

No WW III with Romney so we can rebuild the USA vs over seas.

Nov 8, 2012 6:12PM
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Did everyone see the Red-Blue Map ,Obama has a mandate in Big Cities only.Looks like the rest of the Nation was pretty much RED.
Nov 8, 2012 6:08PM
avatar
Ha ha....Write on Dole.  And this news just in....

Police investigators are at the scene of a horrible tragedy in
downtown KOCHVILLE....Found at the foot of the KOCH Industries
building were two bodies of former paid shills for what was supposed
to be an empire.  Identification found indicated they were named
"Alias" and "Jeff-R" and had roomed together underneath one of the
terminals in the computer room.  Whether or not it was a double
suicide or their contracts were 'terminated with extreme prejudice'
is still unknown

Investigation is ongoing...This has been LOM HARVEY reporting.
Video at Eleven.

Nov 8, 2012 6:07PM
avatar
I SEE A MAJOR RAPTURE COMING !!!!!!       FLOAT UP WING NUTS!!!!  FLOAT UP!!!!
Nov 8, 2012 6:05PM
avatar

Grey Goon writes: "all they want someone to give them something for free. We have become a gimmie nation."

 

My, yes! This election wasALL about the free stuff. The freedom to marry whomever we choose. The freedom not to be subjected to various body part probing against our will. The freedom not to be stopped and asked to show proof of ID just because we have a strange last name or a funny accent. The freedom to worship however we choose, or not at all,. even if it's not the way you do.

 

Yeah. Free stuff like that...

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