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 7:31PM
avatar

The Republican Party has changed and not for the better. The change started as a result of the Bush  family and its administration. Couple that time frame with the Fox news people and you now have a bunch of crazy people who behave like thugs and uneducated people.

 

At one time the party had mostly educated people in its ranks. Now, there are only followers of Fox News and out right thugs.  

Nov 8, 2012 7:24PM
avatar
GOP'S BOEHNER just said during a Diane Sawyer interview that Obamacare is now the law of the land and that the GOP will not be fighting this issue anymore. This is a miracle. This is a very honorable gesture on the GOP's part and will increase our chances dramatically of getting a budget resolution before the fiscal cliff begins on December 14th. I am very encouraged by this leader's compromise and I thank God that very soon all Americans will have the same socialized medicine currently enjoyed by illegal aliens in this country. This is the greatest news for the markets tomorrow. VERY POSITIVE FOR STOCKS.  
Nov 8, 2012 7:19PM
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timothy asked;
"How did this guy get in ? No valid birth certificate........ Muslim......."

Haven't you heard? It's not PC to ask for ID............
Nov 8, 2012 7:19PM
avatar
Nobody that reads these posts voted for the current president, I would assume mostly because they can't read. They are just sitting on the couch waiting for the Shepard to tell his sheep what to do next. The reason I say this is because after four years of failed economic policies, failed foreign policies and failed energy policies, all of which had been clearly printed and displayed all over the place, they still voted for a clueless president and now the downward spiral continues, 4 more years of hell. So, obviously, they can't read or even have their own brain to think for themselves. Nice job sheep! Get a clue! My question is, Now who are you going to Blame?
Nov 8, 2012 7:17PM
avatar

How did this guy get in ? No valid birth certificate........ Muslim.......Pro-Planned Parenthood ( Eugenics )

 

Does the voting public really understand what Barack Obama stands for ?

 

 

Nov 8, 2012 7:17PM
avatar

I am delighted by all the misery being espoused! We will close the gap between the folks who work for a living, and those who siphon their unearned fortunes from our hard work!

Nov 8, 2012 7:15PM
avatar
KOOk said;
"It is very depressing to see so many trailer dwellers blogging below about their conspiracy theories on why the market is going down. This article fails to address why. The market is going down because the do-nothing GOP Congress has refused to address the budget crisis for 2.6 years."

what? They failed to address the fact that Obama hasn't even proposed a budget in FOUR YEARS? THAT'S THE CRISIS!!!

Is that what you accuse them of failing to address?????
Nov 8, 2012 7:11PM
avatar
"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."

IN PART????????????????  LMFAO!!!!!!!!!!!!!!

350 points in the two consecutive days since the election, and you're going to bullchit us with, "In Part" ????

What a BUFFOON!!!!!!!!!!!!!!!!!
Nov 8, 2012 7:06PM
avatar
Day two of the aftermath ..we are just getting started Blacks, latinos, single women you thought you got yours on Tuesday. You aint seen nothing yet.
Updated: 11/08/2012 06:43 ET
Market Update
Symbol Last Change
12,811.32 -121.41
2,895.58 -41.71
1,377.51 -17.02
Nov 8, 2012 6:51PM
avatar
You know what they say, a nation generally does not fall at the hands of it's enemy but rather from the inside.
Nov 8, 2012 6:47PM
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It is very depressing to see so many trailer dwellers blogging below about their conspiracy theories on why the market is going down. This article fails to address why. The market is going down because the do-nothing GOP Congress has refused to address the budget crisis for 2.6 years. Now, as we move forward Wall Street is selling off deliberately because they don't know for sure which stocks will be affected because we don't know yet which government agency or which private or public company will be affected by cuts to defense or government. Some companies, like Lockheed Martin, are guessing they will be hit hard so they are giving out pink slips effective in December if the automatic $1 trillion in cuts happen. Even Romney admitted he wouldn't do this any different than Obama and he hoped that Congress would address the issue and avoid the fiscal cliff. Now that the American people have resoundly proclaimed their disgust at the lines of separation of church and state being violated by the GOP over abortion, this issue is dead. I believe we will move forward and a budget deal will be worked out soon. Stocks are an absolute bargain right now. These same bloggers were ecstatic when Obama came in and the market was still stalled from Bush. When the market went up, these same angry bloggers lost everything as the market skyrocketed. It will be the same again. This market will steadily increase over the next 12 months. Also, Europe chose to keep rates the same and Mario Draghi of the ECB said that Europe will stabilize in 10 months and sooner if rates had been cut. I am very very optimistic that 2013 will be a great year.
Nov 8, 2012 6:44PM
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I guess what amazes me is so many of you can foretell the future of America with absolute certainty and yet the re-election of Obama, it would appear, came as a complete surprise. Intermittent clairvoyance perhaps or are you just poor losers spouting the republican cult's venom with a calculated carelessness with the facts? Guessing that the economy will tank is not rocket science, it is overdue and, I believe, quite necessary. Sadly we will not embrace it as americans but rather 2 contentious children that are engaged in an endless argument of " did", "did not".  
Nov 8, 2012 6:43PM
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Just need to hold on a few more years... then I say good bye to this country.  I served in Viet Nam .. and now I ask for what.. for a bunch of people who want everything for free and expect the government to be the answer to all their problems.
Nov 8, 2012 6:42PM
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During my military career, the Federal Government passed laws on preventing waste, fraud and abuse by any government employee or member of the armed forces. I think these waste, fraud and abuse laws should apply to elected officials, including the POTUS. If these laws were applied to them we could start pressing Congress tomorrow to begin the impeachmant process on the POTUS...   
Nov 8, 2012 6:42PM
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For all you delusioned investors out there start thinking of investing in companies that produce guns and ammo..................
Nov 8, 2012 6:38PM
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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
avatar
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
avatar
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.
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