Profit-taking, Europe worries keep stocks in check

The Dow falls 12 points as worries about Greece plus profit-taking limit gains. Still, the major averages are off to their best start since 1997. Investors jeer Research In Motion's management change. Oil and gold move higher.

By Charley Blaine Jan 23, 2012 2:20PM
Charley BlaineUpdated: 8:24 p.m. ET

Last week, the stock market was about bullishness for the economy.

Today, the stock market was a contest amnog bulls and those  who remain skeptical that Europe can pull off a miracle in restructuring its financial system and those who simply want to cash in their profits.

The contest ended the day basically in a draw. The Dow Jones industrials ($INDU) and Nasdaq Composite Index ($COMPX) ended with tiny losses, but the Standard & Poor's 500 Index ($INX) and Nasdaq-100 Index ($NDX) enjoyed tiny gains. It was a bit of a seesaw battle. Stocks opened higher but dropped back after 10 a.m. ET. A rebound set in shortly after noon.

Research In Motion (RIMM) shares fell $1.44 to $15.56 after Jim Balsillie and Mike Lazaridis resigned as co-CEOs. A conference call with new CEO Thorsten Heins didn't go well. He talked about the need for better marketing; investors wanted to hear about innovation. And Netflix (NFLX) dropped $6.28 to $93.96 after Wedbush Securities said the company may offer a weak first-quarter forecast.

The Dow closed down 12 points to 12,709; the blue chips had been down as many as 55 points at 12:10 p.m. The S&P 500 gained 1 point at 1,316. The Nasdaq was off 3 points to 2,784; the Nasdaq-100, which tracks the largest Nasdaq stocks, was up very slightly to 2,437.

Article continues below.
After the close, Texas Instruments (TXN) reported earnings of 42 cents a share, 11 cents better than estimates. The number excludes 16 cents a share in costs related to its acquisition of National Semiconductor and 7 cents a share for closing two chip factories in Japan and Houston. It includes 6 cents for a tax benefit.

Shares were up $1.11 after hours to $34.30.

Separately, railroad giant CSX (CSX) shares were down 48 cents to $22.21 after fourth-quarter earnings of 43 cents a share were up 13% from a year ago but missed Street estimates by a penny. Revenue of $2.95 billion was up 5% from a year ago and in line with estimates.

On Tuesday, the Federal Reserve starts a two-day meeting that will end on Wednesday with its first explicit projection of interest rates, inflation and other indicators.

It's a heavy day of earnings. Reports are due from McDonald's (MCD), DuPont (DD), Harley-Davidson (HOG), Johnson & Johnson (JNJ), Travelers Companies (TRV), Verizon Communications (VZ) and Yahoo (YHOO). The big report is Apple (AAPL), which comes after the close.

But futures trading suggests U.S. stocks will open basically flat.

Hard to win investor affection
This was a day when a lot of investors said, "Show me."

Decent earnings from Halliburton (HAL) didn't impress investors; profit margins were trimmed by lower spending on natural gas drilling in North America. McDonald's was off 79 cents to $100.95 ahead of Tuesday's earnings report.

Europe was causing worries, even if stocks on the Continent moved higher. A deal with Greece still hasn't come together, and Spain, unhappy with fire-sale offers, halted plans to sell airports in Madrid and Barcelona.

The market has enjoyed a strong January. At the end of the day, the Dow was up 4%, with the S&P 500 up 4.6%, potentially their best January performances since 1997. The Nasdaq's S&P 500 was up 6.6%. If the gain holds for another week, it will be the best January 2001. (An earlier version version incorrectly said the gain would be the best since 1999.) 

Why oil moved higher
Crude oil (-CL) in New York settled up $1.25 to $99.58 a barrel -- its first gain in four days -- after the European Union agreed to ban crude imports from Iran starting July 1. That raised concern that retaliation from the Islamic Republic may disrupt the oil supply from the Middle East.

The EU also agreed to freeze assets of the Iranian central bank in Europe as well as of eight other entities and ban the trade in gold, precious metals, diamonds and petrochemical products from Iran.

Brent crude, the benchmark North Sea crude, was up 94 cents to $100.80 a barrel.

Retail gasoline was at $3.383 a gallon, according to AAA's Daily Fuel Gauge Report, down slightly from Sunday but up 3.5% this month and 8.7% from a year ago.

Gold (-GC) settled up $14.30 to $1,678.30 an ounce. Silver (-SI) was up 59.5 cents to $32.27 an ounce. Copper (-HG) had added 5.35 cents to $3.7985 a pound.

The U.S. dollar index fell below 80 for the first time since Jan. 3 as the euro rallied. The 10-year Treasury yield rose to 2.06% from Friday's 2.028%.

Energy shares were generally higher, led by Noble Energy (NE) and Chesapeake Energy (CHK).

But Chesapeake rose $1.32 to $22.28 because it's cutting. It said it will cut output, idle drilling rigs and reduce spending in gas fields by 70% after prices for natural gas hit a 10-year low of $2.231 per million British thermal units early today. Gas was at $2.48 per million BTU.

Other natural gas producers were higher on hopes that production shut-ins would boost natural gas prices.

Meanwhile, oil-and-gas producer Apache (APA) said Monday it agreed to buy Cordillera Energy Partners III, a privately owned oil and gas company, for $2.85 billion. Cordillera owns about 254,000 net oil and petroleum liquid field acres. Apache rose $1.58 to $98.38.

Separately, Pan American Silver (PAAS) fell $2.43 to $22.29 after it agreed to buy Canadian silver producer Minefinders (MFN) for about $1.5 billion. Pan American is offering $15.40 ($15.60 Canadian) in cash or cash and stock. Minefinders operates the Delores gold-and-silver mine in Mexico. Pan American has seven mines in Mexico, Peru, Argentina and Bolivia. Minefinders was up $2.60 to $13.95.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$99.58

$98.33

0.76%

0.76%
(per barrel)











Heating oil (-HO)

$3.0098

$2.9884

3.28%

3.28%
(per gallon)











Natural gas (-NG)

$2.5250

$2.3430

-15.52%

-15.52%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7856

$2.7903

4.82%

4.82%
(per gallon)











Brent crude 

$110.58

$109.86

2.98%

2.98%
(per barrel)











Retail gasoline

$3.3830

$3.3850

3.49%

3.49%
(per gallon; AAA)












More talks on Greeceand worries about Europe
The eurozone's 17 finance ministers were meeting in Brussels today to discuss the terms of a second bailout package, worth about $130 billion euros, or $168 billion, for Greece from the European Union and the International Monetary Fund.

If a debt deal for the country falls through, Greece would default on roughly 14.5 billion euros of bonds maturing in March.


The country's private creditors, such as banks and investment firms, say they have reached a limit on the losses they are willing to take on their sovereign debt holdings.


They've been asked to swap their existing bond holdings for ones that are lower in value by 50% and with longer maturities. The move would slash Greece's debt by about 100 billion euros or $129 billion.


Their creditors' representative, the Institute of International Finance, reportedly remains optimistic that a deal preventing Greece from defaulting on its debt will be reached. But there was a Dow Jones report this afternoon that creditors would not agree to a bridge loan without a deal.


Separately, Germany's economy is set to "move sideways" over the coming months amid head winds from a slowing global economy and the eurozone's ongoing debt crisis, the country's central bank said today.

"Sideways movement is looming for the German economy at the start of 2012," while a contraction "can't be ruled out" for the fourth quarter of 2011, the Bundesbank said in its monthly report.


The wackiness of Sears shares

Sears Holdings (SHLD) were down $1.61 to $47.39 in another day of mind-boggling volatility. The shares opened up 11.8% to $54.76 and then fell apart. The shares were up 54% as last week ended -- 46% last week alone.


Many investors had been shorting the shares, believing that Chairman Edward Lampert couldn't engineer a turnaround. But new buying came into the stock last week. Some of the buying was speculation that Lampert was going to take the company private or at least buy back shares.


The buying forced short-sellers to cover. Short-sellers borrow shares to sell in hopes of profiting in buying them back and returning to their owners, usually their brokers.


The stock seems to have turned lower after numerous articles, including this piece on Seeking Alpha, pointed out that Sears is limited in how much it can spend on buybacks by the covenants in some of its borrowings. And those limits, apparently, are close to being met.


Utilities and energy shares lead the market

Utilities and energy shares were the market leaders today. Technology and financial stocks were close to breaking even.

Only 12 of the 30 Dow stocks were higher, led by Bank of America (BAC) and Hewlett-Packard (HPQ). In addition, 240 S&P 500 stocks and 41 Nasdaq-100 stocks were higher.

Southwestern Energy (SWN) was the S&P 500 leader, up $3.03 to $32.46. Netflix was the laggard.

Marvell Technology was the Nasdaq-100 leader, with Research In Motion the laggard.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0400%  0.040%

300.00%  300.00%
5-year Treasury note 

0.911%  0.891%

9.76%  9.76%
10-year Treasury note

2.067%  2.028%

10.48%  10.48%
30-year Treasury bond

3.146%  3.101%

8.90%  8.90%
Currencies











U.S. Dollar Index

79.934  80.406  -0.73%  -0.73%
British pound

1.5567  1.5552  0.19%  0.19%
(in U.S. $)

          
U.S. $ in pounds

£0.642  £0.643  -0.19%  -0.19%
Euro in dollars

$1.30  $1.29  0.52%  0.52%
(in U.S. $)

          
U.S. $ in euros

€ 0.768  € 0.776  -0.52%  -0.52%
U.S. $ in yen 

77.16  76.97  0.08%   0.08%
U.S. $ in Chinese

6.35  6.31  0.32%  0.32%
yuan

            
Canada dollar

$0.992  $1.015  1.15%  1.15%
(in U.S. $)

          
U.S. dollar 

$1.008  $1.015  -1.14%  -1.14%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,678.30

$1,664.00

7.12%

7.12%
(per troy ounce)











Copper (-HG)

$3.799

$3.745

10.55%

10.55%
(per pound)











Silver (-SI)

$32.2700

$31.6750

15.60%

15.60%
(per troy ounce)











Wheat (-ZW)

$6.1975

$6.1050

-5.06%

-5.06%
(per bushel)











Corn (-ZC)

$6.2000

$6.115

-4.10%

-4.10%
(per bushel)











Cotton 

$0.9946

0.9863

8.49%

8.49%
(per pound)











Coffee

$2.2255

2.285

-3.09%

-3.09%
(per pound)











Crude oil (-CL)

$99.58

$98.33

0.76%

0.76%
(per barrel)










 

53Comments
Jan 23, 2012 5:10PM
avatar

Politicians and diapers have one thing in common.

They should both be changed regularly, and for the same reason.

Jan 23, 2012 4:06PM
avatar

"How come when Iran say's it might close the waterway oil goes up?

 How come when  U.S.A. say's it will keep it open should not  oil go down?"     This line of reasoning falls under the same category of why is it when the price of oil goes up you see the effects at the pumps 12hrs. later and when oil goes down you see the effects at the pumps 4 weeks later. GREED.

Jan 23, 2012 3:36PM
avatar

 How come when  U.S.A. say's it will keep it open should not  oil go down?

 

I guess a "MIGHT" from Iran carries more weight than a WILL from obama!!!!!!!!

 

Imagine THAT!!!!!!!!

Jan 23, 2012 5:17PM
avatar

You do not need a parachute to skydive. You only need a parachute to skydive twice.

Hey Ombama, you don't need to know anything to become the president of the stupid people who elected you, however you will need to know that you failed in your first attempt and you will not be allowed to skydive twice...............​..........

Jan 23, 2012 4:37PM
avatar
"Stocks slide on Europe worries?"   Wait a minute, the Euro is trading higher today against the dollar.  Perhaps stocks are sliding on the worry that the US is becoming an entitlement society like Europe and will suffer the same catastrophe as Europe awaits. 
Jan 23, 2012 3:51PM
avatar

Good luck and good judgement on the future of America. greed is taking over fast.

have a good day.

Jan 23, 2012 3:36PM
avatar
Russia is backing Iran so let them drink the oil. Plenty oil elsewhere, no prob! Isreal, Canada.
Jan 23, 2012 3:41PM
avatar

As long as the fed keeps printing money (FTTM up $5 Trillion+ since Obama) oil prices will keep climbing, along with the cost of everything else.  The Iran issue is a smoke screen.  This administration's purpose is to devalue the dollar and increase the price of oil.  This helps them in two big ways:  1.  It furthers their "Green" agenda by raising the price of gasoline, and 2.  It is a covert tax that helps them monetize the giant debt they have created.

Jan 23, 2012 3:32PM
avatar

How come when Iran say's it might close the waterway oil goes up?

 How come when  U.S.A. say's it will keep it open should not  oil go down?

Jan 23, 2012 4:15PM
avatar
Why is it on one day the market shrugs off bad news out of Europe and post's gains. The next day the markets down and it's because of "EUROPEAN WOES" among other things.
Jan 23, 2012 4:05PM
avatar
CHARLIE BOY, THE AMERICAN PEOPLE(OR WHATS LEFT OF THEM) ARE GETTING TIRED OF YOUR EUROZONE BLUES, WHICH IS A SMOKE IN THE **** SUBJECT. TRY TALKING ABOUT DOMESTIC ISSUES FOR ONCE.LIKE HOW THE NATIONAL ASSOCIATION OF REALTORS AND OTHER GOV CONTROLLED AGENCIES ARE ATTEMPTING TO MAKE THE PUBLIC COME OUT AND SPEND WHEN IN REALITY A NEW WAVE OF FORECLOSURES IS ABOUT TO HIT AND EVEN THOUGH THE EMPLOYMENT MAY HAVE TICKED UP A TINY BIT ALOT OF THESE ARE EITHER PART TIME OR LOWER PAYING JOBS PEOPLE HAVE NO CHOICE TO TAKE.
Jan 23, 2012 3:43PM
avatar

Got that right Taz.

 

Get this one, now price increases due to  eagle farts.

Forget about Somali pirate rowboats and 1200 ft tanker ships.

 

Natural gas prices also rose more than 7 percent after one of America's biggest natural gas producers said it would cut production and exploration this year.

So if we use domestic energy sources' we are still at the mercy of ?

 

 

Jan 23, 2012 6:25PM
avatar

With the super abundance of natural gas in America, combined with our trade balance and deficit problems .. you would think politicians in Washington would wake up to the potential of LNG export to Japan and China.  I guess one thing at a time .. and re-election is about all they can handle.  With about 30 Trillion cubic feet of natural gas reserves on Alaska's north slope .. you would think someone would come up with the bright idea of getting a drop of the stuff to market.

Jan 23, 2012 6:53PM
avatar

You should know by now that Obama just bought the letter N to be added to DOW

and it will start tomorrow

 

Get OUT of the stock Market and GET A REAL JOB

 

I guess there is one guy who don't want a real job...he probably votes for living...

Jan 23, 2012 3:50PM
avatar
I'm with you chipper, staying away from the kool-aid makes it easier to see through the smoke.Wink
Jan 23, 2012 4:11PM
avatar
Agree with REAPER 90. Europe is just a crutch the markets are using to take our eye off of more potential domestic problems that might just bite us in the azz when we least expect it.
Jan 23, 2012 4:36PM
avatar

TSA

stands for

TERRORIST SINKING AMERICA

 

AIG

stands for

ALL IS GONE

Jan 23, 2012 3:25PM
avatar
 in New York was up $1.04 to $99.37 a barrel -- its first gain in four days after the European Union agreed to ban crude imports from Iran starting July 1. That raised concern that retaliation from the Islamic Republic may disrupt oil supply from the Middle East.

 

I sure as hell hope Iran doesn't do anything because they stir up more crap just talking about it. Probably sitting around laughing going 'Watch what I can Make them do now!!!!!" This country has been sold out to the point we are nothing but a "JOKE". POLITICAL PUPPETS!!!!

Jan 23, 2012 7:26PM
avatar
Does anyone really and I mean REALLY believe that it  matters who we put in office without changing the system in which they are allowed to operate by is going to make a DAMN BIT OF DIFFERENCE..........​...NOT !!!! They are just changing their posistion in the CRAP PILE!!!!!!!!!
Jan 23, 2012 7:15PM
avatar
YEA, clear as mud!!! Just like obamas transparency to government!!!!!!!
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