Dow falls 228 on economic fears, Saudi unrest
The blue chips drop below 12,000 for the first time since Jan. 31. News that Saudi police disperse protesters worsens a slumping market. Oil drops. Weekly jobless claims are worse than expected. Green Mountain Coffee will sell Starbucks coffee.
The Dow Jones industrials ($INDU) suffered their worst losses since August as stocks sold off broadly on worries about continued unrest in the Middle East and Libya and disappointment with a report on jobless claims in the United States.
Adding to the stress was a surprising decline in Chinese exports that sent commodity prices plunging until news broke that police in Saudi Arabia had fired rubber bullets on protesters in Qatif, a city on the east coast near Bahrain. There were reports of injuries.
Within seconds of the report, the Dow saw a decline of some 160 points grow to as many as 239 points.
Crude oil in New York, which had dropped below $101 in the morning, shot up to as high as $104.25 before falling back to settle at $102.70, down $1.68 from Wednesday. Crude was at $102.27 in electronic trading this afternoon.
Standard & Poor's 500 Index ($INX) was off 25 points, or 1.9%, to 1,295 -- its first close below 1,300 since Jan. 31. The Nasdaq Composite Index ($COMPX) was off 51 points, or 1.8%, to 2,701.
As important as the losses themselves, all three indexes finished below their 50-day moving averages on the same day for the first time since Aug. 31. The 50-day average is watched closely as an important measure of investor confidence. A drop below the 50-day moving average could be a signal the market is headed lower. If you're a bull, you'll like how futures trading says U.S. stocks will open: higher.
Article continues below.
The market's abrupt slump this afternoon reflects how jittery Wall Street is about continued unrest in Libya and the Middle East. Websites have called for a "Day of Rage" Friday in Saudi Arabia, Human Rights Watch said.
The day's selling also reflected renewed worries about European debt problems after Moody's downgraded Spain's credit rating.
While crude was traded lower in New York, Brent crude, the benchmark North Sea crude, settled down 51 cents to $115.43 a barrel. It had hit $116.39 on the Saudi report.
Gold was off $16.10, or 1.1%, to $1,413.50 an ounce in electronic trading. It settled at $1,412.50 an ounce, down $17.10. Copper was down 4.2 cents to $4.1975 a pound. Silver settled at $35.066 an ounce, down 98 cents.
Interest rates were lower, with the 10-year Treasury yield falling to 3.393% from Wednesday's 3.469%.
|Energy prices -- New York close|
|(per mil. BTU)|
|(per gallon; AAA)|
Jobless claims move higher
The market struggled with a long string of bad news.
U.S. jobless claims rose an unexpected 26,000 to 397,000. Most analysts had expected claims to rise only to 376,000.
The U.S. trade deficit widened more than forecast in January to the highest level in seven months as a surge in imports led by costlier crude oil overshadowed record exports. The gap in goods and services increased 15% to $46.3 billion, from $40.3 billion in December, the Commerce Department said.
China reported an unexpected trade deficit in February as exports declined and higher commodity prices boosted its import bill. The news pushed stocks in Japan and Hong Kong lower. The Nikkei 225 Index ($JP:N225) fell 1.5% to 10,434.
Moody's lowered Spain's credit rating by one notch to Aa2, citing concerns about the cost to restructure banks and the government's ability to reduce borrowing. Britain's FTSE-100 Index ($GB:UKX) was off 1.4% to 5,845. Germany's DAX Index ($DE:DAX) dropped 0.5% to 7,132.
McDonald's only Dow stock in black
All that bad news just battered stocks, and the Dow is off 3.2% since peaking on Feb. 18. The S&P 500 is off 3.4%, with the Nasdaq off 4.7%.
Starbucks, Green Mountain are the stars of the Nasdaq
If you wanted some splashy news, look no further than Green Mountain Coffee Roasters (GMCR), whose shares jumped 41.4% to $61.71, tops among Nasdaq stocks. The company agreed to sell Starbucks' (SBUX) coffee and Taxo tea products for use in Green Mountain's Keurig brewing system this fall.
Starbucks was up 9.9% to $37.97, tops among Nasdaq-100 ($NDX.X) stocks and among S&P 500 stocks.
The partnership strengthens Starbucks' presence in the nearly $2 billion single-cup coffee market, which the coffee giant entered last year with the launch of VIA Ready Brew. It also ends speculation that Starbucks will debut its own single-cup brewer.
But decliners dominated the market
Only 26 S&P 500 stocks were higher today, along with just eight Nasdaq-100 stocks. The Nasdaq-100 was down 38 points, or 1.7%, to 2,284. Following Starbucks in the Nasdaq-100 were Netfix (NFLX), up 3.6% to $200.02, and F5 Networks (FFIV), up 1.8% to $110.06.
The biggest laggard was Nvidia (NVDA), down 6.4%, to $17.92. Next was NetApp (NTAP), down 6.1% to $48.41. Investors are skeptical on how well it can manage the acquisition of LSI's (LSI) Eugenio business. NetApp announced the $480 million deal on Wednesday.
All 10 sectors of the S&P 500 were lower, with energy hit the hardest, thanks to lower oil and natural gas prices. In addition to Exxon Mobil's decline, Chevron (CVX) was down 3% to $99.08. Peabody Energy (BTU), the big coal producer, was down 5.8% to $61.59. Schlumberger (SLB) dropped 4.5% to $84.61, and BP (BP) was off 3.7% to $45.66 in New York.
Worries of a tablet glut weigh on techs
The problem is that everyone is trying to catch up to Apple's iPad, analyst Mark Moskowitz wrote.
Research In Motion was off 3.4% to $62.60. Apple fell 1.7% to $346.67.
|Short hits from the markets -- New York close|
|Thur.||Wed.||Month chg.||YTD chg.|
|13-week Treasury bill||0.070%||0.100%||-50.00%||-41.67%|
|5-year Treasury note||2.058%||2.147%||-3.70%||2.08%|
|10-year Treasury note||3.393%||3.469%||-0.62%||2.66%|
|30-year Treasury bond||4.536%||4.599%||1.02%||3.99%|
|U.S. Dollar Index||77.274||76.719||0.46%||-2.54%|
|(in U.S. $)|
|U.S. $ in pounds||£0.623||£0.617||1.37%||-2.84%|
|Euro in dollars||$1.380||$1.391||-0.19%||3.15%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.725||€ 0.719||0.19%||-3.05%|
|U.S. $ in yen||83.056||82.740||1.16%||2.08%|
|U.S. $ in Chinese||6.598||6.556||0.10%||-0.25%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
Where has Obama been? Has he tossed in the towel.?
If Michelle starts traveling on the taxpayer dime soon it will prove he knows his presidency is a one term and out deal.
Up and down, the roller coaster ride of economic drivel. Our unemployment rate is declining as the millions of unemployed have exhausted benefits. Any new claims spell trouble down the road. Here in Michigan we lost 100's of thousands in jobs during the lost decade 2000 to 2010. Remember the numbers will get better as those who have run the course of unemployment, but the economy still won't be healed. People are still moving out to find work, but what to do with all the vacant homes. In Detoilet values of homes have dropped like a rock, even in Northern Michigan values have plummeted. Who is left to buy, at $8 to $10 jobs no one can make payments with salaries like that. Last week things looked all rosy for the economy so says Mr. Bernanke.....these guys are smoking some good stuff.
i know you don't want to hear this, but you will know in your heart of hearts that it is true. it is you guys/gals that are smoking the good stuff and not facing the realities of the new normal yet.
jobs as we knew them are not going to improve for a long time and many will never return in either home construction or public services. obama has been busy doing his best to help dig us out from the whole we were put in my over thirty years of abuse from BOTH parties in an incestuous relationship with BOTH the wealthy elite and we the American public. WE voted these people into office believing campaign promise after campaign promise and living off of dirty "earmarks," lobbyist industry money, the housing industry, unsustainable lifestyle, unrealistic tax rates, and pie-in-the-sky medical and retirement entitlements. WE elected bush and watched as he and congress doubled the debt in 8 years. WE stood by and let it run up to $14 trillion and climbing.
you want housing? YOU CAN'T AFFORD HOUSING for all. MOST people around the world live in wood huts, dirt floors, outdoor toilets, slums, steel and tin shacks, public housing, and multi-generational shared living space. there is nothing that makes us different. time for a lot more renters and shared living space while we learn to live within our means as a country. EVERYONE DOES NOT GET A CELL PHONE, or a house, or a car, or a flat screen, etc.!!!
the damage has been done and the GOP can't save things, but they can help us get closer to fiscal austerity measures that we need. the Dems have the better idea in green industry, infrastructure and moving rapidly over to an export economy (that's why the dollar is being de-valued - this makes US goods less expensive and stimulates exports. you are getting a "thumbs down" because you are expecting the impossible bt clinging to the OLD NOTION of which party can kiss it and make it better mommy. mommy has left town with the loot and the guitar player. time to man-up and look within.
and finally for canoe, love the passion but this is not egypt. get involved as a volunteer in your community. start working for local campaigns for people who can make a difference and will not be career politicians. stop voting these party-line incumbents back into office again and again. look at libertarians, look at qualified non-nut-case Tea Partiers, look at the independents. make democracy work for us and not against us.
y'all need to breathe deeply and face the realities of the new normal ...
God Bless America
Again you can fill in the blank with these stories, the rollercoaster ride continues. We're hiring 4 people to work 4 months. Pay 10.25 to 11.00 no benefits. These people where happy to get these jobs. Their unemployment had ran out, they're all over 50.
Stop the cheerleading, tell the truth, BOTH PARTIES need to work together for the common good of the American People, not the Lobbyist who passes out the cigars and the cash.
Stop blaming each other, the past is done, only the future is ahead. I wasn't a fan of President Reagan but. he was right when he said to get positive and look to the future. Dwindling on past failures needs to stop, People it's time to be responsible for OURSELVES and the future, But we will need American Corporations to come home, American workers to again take pride in their work.
"Youre right, Lybia does not even supply us with their oil , and prices rise to 105. what will happen if the Saudies start. Speculations are as high as 200.per barrell. 7 to 10 dollars gallon. Hope does not happen .and keep your fingers crossed. "-DPO715
Too late for wishful thinking. Disruption in Saudi Arabia has already begun. If this continues or escalates to the point where oil distribution is disrupted the $hit will hit the fan, not just for the U.S., but on a global scale. My intel has informed me that WWIII is a very likely reality due to what is going on in the Middle East. Also; keep an eye on what China is doing.
I was just watching this past week’s 60 minutes segment on Homeless children. As I treat many of these stories as biased or self-serving this one brought me to physical tears.
Our politicians, Democrat and Republican, liberal or undecided have all turned their backs on us, “We the people”.
I can no longer just sit here tapping out my observations about a market that really has no bearing on the true economy and those who have been forgotten. These children are the future of this country and could very easily be so bitter they spark change through violence. We need to do something now to stop this uncalled for greed by the few against the many.
Though I wish I had the money to bring real change I do have my mind and mouth to do what is asked of me. Who is willing to take the bull by the horns and help me help our fellow Americans? I for one feel other countries can take care of theirs until we get our house in order...
I am stepping forward to offer my services. Who else will stand with me?
Don't you just love that change were getting. Despite a media that pushes a liberal agenda BO has proven he has no plan for our economy, and now it is apparent that he has no foreign policy either, which is now going to kill any positive consumer sentiment that the media machine had created.
Wisconsin's Democratic lawmakers went to Illinois to hide out. Maybe those in Washington can go hide in ........... OK, all of you out there can fill in the blank.
Before the crash half of Americans made less than $32,000 a year now half of Americans make less than $26,500 a year. Things are 20 percent worse than they were before.
Its worse then that: Over the past decade, wages haven't even kept pace with inflation.
As such, consumer spending is dropping, which is bad considering consumer spending is 70% of our economy. Worse, the top 5%, which is the direct recepient of the wealth transfer, is being taxed less and less. So the people who are getting the largest increase in wealth is also hte group getting the biggest tax breaks...no wonder we're broke; we're taxing less money!
"In Soc -- you will never see WWIII with obama in charge for he fears his own shadow much less that of the military." -LairdN
I really wish that were the case, but the reality is the President does not run this nation. Just to reiterate, I nor my information resources are not making any direct prediction about WWIII. I have merely stated that if oil supply from Saudi Arabia becomes disrupted WWIII becomes more of a reality. One only needs to know about history to understand why.
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