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.

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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.

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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



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Nov 8, 2012 5:46PM
All eyes are on the congress!  Are we going to have more grid lock or will they compromise  with the administration! We need the leaders to start working together!
Nov 8, 2012 5:46PM
So, with the fiscal cliff looming, the devluation of our currency by the Fed, the stock market in what seems to be an almost continual state of wonkiness, it's looking like gold and silver, and some oil stocks are the only safe places to put your money these days. I'm not  seeing any other safe place to park you money out there.
Nov 8, 2012 5:44PM

 I just bought a lot of silver one ounce eagles coins, before the downgrade credit rating. I am sure they will kick the can further down the road.

Nov 8, 2012 5:44PM
Halie Barber says Sandy saved Obama- I'll bet after the next 4 yrs he will have wished he lost- got a feeling it will be hell- its already started-sell your stock and get out- and as our economy tanks further China wont loan us more money- guess where the 1st cuts will be- these idiots wont care til the checks are smaller then they'll burn fires like Greece- Obama won- America lost
Nov 8, 2012 5:42PM

I have trouble understanding the hate and bigotry on these posts. Right wing nut bags are the reason this country is in trouble. It takes both parties to work a compromise. I have a job , have never been unemployed. Bush and the Republicans created the s--t show and Obama will fix it with help from any open minded Republicans if any exist.

Nov 8, 2012 5:42PM
Half of the market drop is because of Apple.
Nov 8, 2012 5:41PM
People keep buying at big box stores like,Walmart and support and give the Chinese more power to take us over !
Nov 8, 2012 5:41PM
The sky is falling.....better get to the bank and pull all the liquid cash you can....then the revaluation of the dollar can begin......ever watch a boat sink?  Looks like our economy with the government (fed, state, and local) as the captain.
Nov 8, 2012 5:41PM
Nothing to worry, just the elitists being pissy because they blew 400 Million on buying the elections and lost. And for those who complain about all those "Business Killing Regulations", where was your b!tching when those businesses where killing people? First comes business killing people, then comes a regulation so they don't. If you can't understand that, then you are part of the problem.
Nov 8, 2012 5:41PM
Nov 8, 2012 5:39PM
I had 3 good post......That didn't; Can't get one in between a lot of this bullsh!t...I give..
Nov 8, 2012 5:38PM

So repubs are happy the market is down.  You guys are F'd up in the head.  Your like a 4 year old who was just told to share his toys and instead broke them so he didn't half to.  The market will recover but your party as you know it will never win a presidential election again.  Not unless you are willing to look yourself in the mirror and be honest about what you see. 

Oh and any of you thinking of moving to Canada to hide from health care and taxes.....

ha ha ha ha ha ha ha ha ha ha ha

That is funny you guys really are stupid.

Nov 8, 2012 5:38PM
Red States are RED because they are embarrassed of what the rest of the country has become.
Nov 8, 2012 5:36PM
Obama didn't set up this fiscal cliff...congress did.  Also, if a robust stock market equals job creation, then where are the jobs for the past however many months that the DOW has been back at pre-recession levels?   I am reading a headline right now on this page from last week that says "Dow Jumps 136 on jobs data" does Obama get credit for that, or only blame when the DOW goes south?  And the reason Eurpoe's economy is so volatile right now?  Austerity measures.  Now which party is calling for that type of response here?  You can't make easy money creating an economy driving by spending and then suddenly blame the spenders when things go wrong.   If you simply try to force the pendulum in one direction (cuts) or the other (revenue) it will not be fruitful.  CAn there be no middle ground?
Nov 8, 2012 5:34PM
This has nothing to do with any news event!! There hasnt been anything happen that wasnt known two weeks ago already that would pull the markets down over 10 points!!This is the big boys pulling the gains out of the market! Plain and simple!
Nov 8, 2012 5:32PM
THE SKY IS FALLING ...THE SKY IS FALLING... ! Grab your bibles and your guns and all the gold you can and slither under a rock. Don't come out 'til we tell ya. 
Nov 8, 2012 5:30PM
It's strange how the Bible Belt, or better known as the Poverty Belt, voted solid Republican. Almost all the Poverty Belt States, take billions more in Welfare from the Federal Government than they pay in taxes. If Republican policies are so great, then why do the Democrat States have to support the Red Leech states ? The south will only rise again once they realize the Earth is more than 6 thousand years old, the world isn't flat and they don't have to grab their ankles and take it from the Right Wing Taliban any more. Amen.
Nov 8, 2012 5:29PM
Welcome clownfeet....... it's been a while.
Nov 8, 2012 5:29PM
Bend over America; "the best is yet to come."
Nov 8, 2012 5:29PM
They wanted Obama and Biden for 4 more years and now they got them. Yet, I tend to believe that the brokers and traders had this all planned no matter who got into office! Seems like they are never happy no matter what happens. I will be interested in seeing how many people will commit suicide due to the O and B team once 2013 starts!  And to think that A-Hole Clinton thinks we are better off with Obama.  I guess that's what happens when you get old and have to have emergency heart surgery!!!!!
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[BRIEFING.COM] The stock market finished the Wednesday session on a modestly lower note, but it is worth mentioning today's retreat took place after six consecutive gains. The Dow Jones Industrial Average (-0.1%) and S&P 500 (-0.2%) settled not far below their flat lines, while the Nasdaq Composite (-0.8%) lagged throughout the session.

Equity indices started the day in the red, with the Nasdaq showing early weakness as large cap tech names and biotechnology weighed. The technology ... More


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