Dow sees first weekly loss of 2012

The blue chips fall 74 after the government says fourth-quarter growth is 2.8%; Wall Street was expecting 3%. Facebook may file for its IPO next week. Ford, Chevron and Starbucks drop on earnings letdowns.

By Charley Blaine Jan 27, 2012 1:58PM
Charley BlaineUpdated: 7:35 p.m. ET

Stocks struggled all day after a report on U.S. economic growth wasn't as strong as expected and earnings from Ford Motor (F), Chevron (CVX) and Starbucks (SBUX) disappointed.

The Dow Jones industrials ($INDU) were lower for the fourth day  this week -- but off their lows of the day. The index finished with its first weekly decline of the year. The Standard & Poor's 500 Index ($INX) and the Nasdaq Composite Index ($COMPX) ended higher for the fourth straight week, though with small gains.

The market did find some support after The Wall Street Journal reported that Facebook intends to file papers for its long-expected initial public offering, perhaps by Wednesday. The company is looking at a valuation of $75 billion to $100 billion, the Journal said. At $100 billion, Facebook would be worth more thanAmazon.com (AMZN).

The government said gross domestic product grew at an annualized 2.8% rate in the fourth quarter, the best performance since the second quarter of 2010. But most analysts had expected a 3% growth rate. Most of the growth came from inventory rebuilding. Consumer spending grew 2%, but much of that was due to spending on new motor vehicles. Most economists see slower consumer spending growth in the next few months.

The Dow closed down 74 points to 12,660. The blue chips had hit a three-year high soon after Thursday's open and fell as as many 104 points early this afternoon. The S&P 500 was down 2 points to 1,316. The Nasdaq was up 11 points to 2,817. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, gained 7 points to 2,462.

Article continues below.
The market's performance today suggests there's some wariness about the market heading into next week, a big week, climaxing on Feb. 3 with the monthly jobs and unemployment report.

The Dow fell 0.5% for the week, with the S&P 500 up 0.1%. The Nasdaq had a 1.1% gain. For the month, the Dow is still up 3.6%, with the S&P 500 up 4.7% and the Nasdaq up 8.1%.

Crude oil (-CL) in New York settled down 14 cents to $99.56 a barrel. Brent crude, the benchmark North Sea oil, rose 66 cents to $11.45.

Gold (-GC) settled up $5.50 to $1,732.20 an ounce. Silver (-SI) added 4.7 cents to $33.79 an ounce. Copper (-HG) was off slightly to $3.889 a pound.

Interest rates were lower, with the 10-year Treasury yield falling to 1.898% from 1.931% on Thursday, even as the dollar was lower against major currencies, particularly the euro. The euro was at $1.3217 today, up from $1.311 on Thursday. The currency rose 2.2% against the dollar.

Markets for the week



1/27/2012

1/20/2012

% chg.

YTD chg.
Dow Industrials

12,660.46

12,720.48

-0.47%

3.63%
S&P 500

1,316.33

1,315.38

0.07%

4.67%
Nasdaq 

2,816.55

2,786.70

1.07%

8.11%
Russell 2000

798.85

784.62

1.81%

7.82%
Crude oil 

$99.56

$98.33

1.25%

0.74%
(per barrel)











U.S. Dollar Index 

79.01

80.41

-1.73%

-1.88%
10-yr. Treasury

1.90%

2.03%

-6.41%

1.44%
Gold

$1,732.20

1,664.00

4.10%

10.56%

Morgan Stanley may lead the Facebook IPO

Investment bank Morgan Stanley (MS), sources told the Journal, appears to be the frontrunner for the much-coveted "lead left" position on Facebook's IPO documents to be filed with the Securities and Exchange Commission. Goldman Sachs (GS) is also vying for the spot. Morgan Stanley was up 5 cents to $18.61. Goldman was up 11 cents to $111.88.


Facebook's IPO, which people familiar with the matter have said could raise as much as $10 billion, has been hotly anticipated as a defining moment for the latest Web investing boom. Even a $5 billion offering would be the largest for an Internet company.


The Menlo Park, Calif., social-networking company, which has more than 800 million members, has changed the way people interact with each other and share information on the Internet.


The valuation may be lower than guesses this summer that had put the overall value of Facebook at more than $100 billion. But disappointing IPOs from Groupon (GRPN) and Zynga (ZNGA) have tempered Wall Street's exuberance.

 

Europe, rising commodity costs, Thailand hurt Ford
Ford shares were down 53 cents to $12.21. The company earned 20 cents a share, or $797 million, in the fourth quarter on revenue of $34.6 billion. That excludes a $12.4 billion noncash gain  from eliminating a valuation allowance against deferred tax benefits.

Analysts had expected earnings of 25 cents a share from operations. Ford blamed the shortfall on a rising dollar, higher commodity costs, sales declines in Europe, and floods in Thailand that disrupted its Asian business.

The European market is deteriorating and Ford is not sure when it will turn around, Chief Financial Officer Lewis Booth said. There is too much automotive factory capacity in the region, forcing automakers to boost incentives. Ford increased incentives in the fourth quarter, while still improving net prices, he said. "Europe is a very challenging business environment."

The automaker also spent $2.3 billion on commodities (steel, aluminum, plastics and the like) last year, more than its forecast of $2.2 billion.

Energy prices -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$99.56

$99.70

0.74%

0.74%
(per barrel)











Heating oil (-HO)

$3.0593

$3.0446

4.98%

4.98%
(per gallon)











Natural gas (-NG)

$2.7560

$2.6540

-7.80%

-7.80%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9234

$2.8508

10.01%

10.01%
(per gallon)











Brent crude 

$111.46

$110.79

3.80%

3.80%
(per barrel)











Retail gasoline

$3.3890

$3.3790

3.67%

3.67%
(per gallon; AAA)












Refining hurts Chevron
Chevron shares fell $2.63 to $103.96. The second-largest U.S. oil company reported its biggest quarterly profit decline in two years after refining losses undercut gains from record fourth-quarter crude prices.

Net income fell to $5.1 billion, or $2.58 a share, from $5.3 billion, or $2.64, a year earlier, the company said. Per-share profit was 32 cents below the average of five analysts’ estimates compiled by Bloomberg.

CEO John Watson has been selling oil refineries and filling stations in Europe and Africa to focus on higher-profit crude production and natural-gas liquefaction projects.

Apple takes over top position in market cap
Chevron's woes hurt shares of rival Exxon Mobil, which were off 94 cents to $85.83. Exxon reports fourth-quarter results before Tuesday's open.

The Exxon price decline meant that Apple (AAPL) has retaken the top position as the world's most valuable company. Apple, up 65 cents to $447.28, had a market cap of $417 billion. Exxon's market cap was $411.4 billion.

Other oil companies were lower as well.

Starbucks outlook disappoints
Starbucks shares finished down 49 cents to $47.85; the shares had dropped to as low as $46.91. Its percentage decline was the largest among Nasdaq-100 stocks and 18th-worst among S&P 500 stocks.

Starbucks reported late Thursday that fiscal-first-quarter revenue grew 16% -- the largest quarterly gain since 2007.

Profit rose 10% to $382.1 million, or 50 cents per share, for the quarter that ended Jan. 1. That's up from $346.6 million, or 45 cents per share, a year ago. Revenue increased to $3.44 billion with growth from all its business lines.

Guidance, however, was a problem.

Starbucks now expects to earn $1.78 to $1.82 per share for the full year, up from prior guidance of $1.75 to $1.82 for the year. But it falls just short of analyst expectations of $1.83 per share.

Leaders and laggards
Newell Rubbermaid (NWL) gained $1.39 to $18.82. The maker of Sharpie pens and Graco car strollers reported fourth-quarter earnings of 40 cents a share, excluding some items, beating the average analyst estimate of 38 cents.

Solutia (SOA) surged $8.01 to $27.52 for the biggest gain in the Russell 1000 Index. Eastman Chemical (EMN) agreed to buy Solutia for about $4.7 billion, including debt, to drive expansion into higher-margin specialty plastics and chemicals. Eastman jumped $3.29 to $50.41.

Transocean (RIG) gained 87 cents to $48.13. A judge ruled BP must indemnify Transocean for pollution-related economic damage claims related to the Macondo oil spill. Halliburton (HAL), which provided cementing services for the project and also wants indemnification for compensatory damages, was up 94 cents to $37.10.

Cirrus Logic (CRUS) slid $1.84 to $20.23. The supplier of audio chips for Apple’s iPhone and iPad forecast fourth-quarter revenue will be at least $108 million, exceeding the average analyst estimate of $103.8 million. But apparently investors wanted more.

Financials lead the market

Financial stocks were the strength of the market, followed by health care and materials stocks. The lagging sector in the S&P 500 was utilities.


Only two of the 30 Dow stocks were higher -- Alcoa (AA) and United Technologies (UTX). Chevron and Cisco Systems (CSCO) were Dow laggards.


A total of 240 S&P 500 stocks and 47 Nasdaq-100 stocks were gainers. First Solar (FSLR) and Newell Rubbermaid were the S&P 500 leaders, with Robert Half International (RHI) and Federated Investors (FII) the laggards.


First Solar and Green Mountain Coffee Roasters (GMCR) were the Nasdaq-100 leaders, with Illumina (ILMN) the laggard.


Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0500%  0.050%

400.00%  400.00%
5-year Treasury note 

0.752%  0.770%

-9.40%  -9.40%
10-year Treasury note

1.898%  1.931%

1.44%  1.44%
30-year Treasury bond

3.064%  3.090%

6.06%  6.06%
Currencies











U.S. Dollar Index

79.011  79.513  -1.88%  -1.88%
British pound

1.5741  1.5694  1.31%  1.31%
(in U.S. $)

          
U.S. $ in pounds

£0.635  £0.637  -1.29%  -1.29%
Euro in dollars

$1.32  $1.31  2.00%  2.00%
(in U.S. $)

          
U.S. $ in euros

€ 0.757  € 0.763  -1.96%  -1.96%
U.S. $ in yen 

76.80  77.46  -0.38%   -0.38%
U.S. $ in Chinese

6.36  6.31  0.52%  0.52%
yuan

            
Canada dollar

$0.000  $1.001  -100.00%  -100.00%
(in U.S. $)

          
U.S. dollar 

$1.001  $1.001  -1.83%  -1.83%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,732.20

$1,726.70

10.56%

10.56%
(per troy ounce)











Copper (-HG)

$3.889

$3.902

13.18%

13.18%
(per pound)











Silver (-SI)

$33.7900

$33.7430

21.05%

21.05%
(per troy ounce)











Wheat (-ZW)

$6.4725

$6.5350

-0.84%

-0.84%
(per bushel)











Corn (-ZC)

$6.4175

$6.345

-0.73%

-0.73%
(per bushel)











Cotton 

$0.9609

0.9604

4.81%

4.81%
(per pound)











Coffee

$2.2020

2.2255

-4.11%

-4.11%
(per pound)











Crude oil (-CL)

$99.56

$99.70

0.74%

0.74%
(per barrel)










 

78Comments
Jan 27, 2012 2:38PM
avatar

Disappointed   a little not-so-fun poll for the TGIF crowd ... AFTER reading the article below ....

 

Please click Thumbs up if you think it's about damn time they went after these greedy banksters and wall street leeches ....

 

Click Thumbs down if you think this was all the fault of stupid homeowners, the government and the GSE's (freddiemac/fanniema​e) and they should leave the bankers and wall street alone as they were just doing their job of trying to make money for themselves and their shareholders via free-market capitalism (greed is good) 

 

"Federal and state law enforcement officials announced Friday that they have launched a fraud-fighting initiative to root out wrongdoing in the market for residential mortgage-backed securities.

Attorney General Eric Holder told a news conference that bringing full enforcement resources to bear will help expose abuses and hold violators accountable.

Residential mortgage-backed securities are the huge investment packages of what turned out to be near-worthless mortgages that bankrupted many investors and contributed to the nation's financial crisis.

Appearing with Holder, New York Attorney General Eric Schneiderman, a co-chair of the initiative, said the effort will link state and federal probes of the mortgage-backed securities bubble.

The collapse in value of mortgage-backed securities resulted in unprecedented losses and "all of us" in law enforcement are dedicated to holding accountable financial institutions that lied and cheated and misled investors, said Robert Khuzami, director of the enforcement division at the U.S. Securities and Exchange Commission.

President Barack Obama disclosed the effort in his State of the Union address Tuesday night.

Jan 27, 2012 4:23PM
avatar
Georgia, frankly anyone who votes nowadays for a person who doesn't look seriously at what he's saying and what he's done is stupid!  That's the problem with voters today, they vote for a particular party only because it's been their family history. Obama made it as President, but what did he really do that proved to people that he could do the job?  Yes, he promised change, and let's put it this way, the changes we have experienced in the past 4 years have not been that great!
Jan 27, 2012 4:26PM
avatar

hmmm...  Who cares what religion Obama is?  He says he is a Christian, and I have no reason to doubt him, and if he changes his beliefs I am OK with that too...  

 

Now as to his being a Communist, that is open to debate.  Communism preeches state ownership and supervision of industry.   The government now owns or controls the following:

Education, Post Office, Insurance, Banking, Mortgages, Government Motors, to name a few.  Obama has tried to sieze control of Healthcare as well through Obamacare. 

 

Communists and Socialist believe that government should seize the lawfully earned wealth of one group and give it to another by force.

 

Certainly Mr. Obama's actions and speeches have a Marxist tone to them.  He preeches 'FAIRNESS' by UNEQUAL treatment.  He has government picking winners and losers in the private sector via PUBLIC funds... Solandra, Brazilian Oil, Finnish Car companies, etc...

 

If the Shoe Fits, Wear it....

Jan 27, 2012 6:03PM
avatar
Get ready for the first of many. There are just too many things in our economy that are so screwed, that a positive stock market just isn't happening. Unemployment, the housing crisis, medical care costs, the insane deficit that is unpayable which will probably devalue the dollar even more?? Obama's printing money like it's toilet paper must and will come back to bite us in the **** in the terms of city and state bancruptcy and eventually radical inflation. Obama's stance on drilling will result in gas climbing up over $4.00 by summer and then inflation will kick in .... Soon, your dollar will be worth less, you won't be able to buy the same items for for the same cost, so, you're expense will go up!! And there are still some people that are so stupid that they want Barry back for 4 more years. OMG ... who are these moronic, metally defective, ignorant clodpates.  It's frightening.
Jan 27, 2012 5:05PM
avatar

                      BREAKING NEWS

 

A man jumped the White House fence, but after a brief chase, the Secret Service was able to talk President Obama into coming back and finishing his term.

Jan 27, 2012 4:30PM
avatar
Al Gore says President Obama's economic plan has zero chance of working. Now, this raises on important question: Obama has an economic plan?
Jan 27, 2012 5:10PM
avatar

Troll,

The Dems controlled the congress the first 2 years and nothing got done.  The Reps aren't without blame, but, don't try to lay the lack of any worthwhile action by this adminisration off on congress.  Next you'll be blaming Bush.  You can't have it both ways.  If Bush had the power to screw it up then Obama has the power to fix it.  If Obama is powerless to fix it because of Congress, then Bush was powerless to screw it up because of Congress.  

Jan 27, 2012 4:56PM
avatar

Troll,

I don't know what made you think I was supporting the economic plans of the republican candidates.  I was simply stating that our current President's plan seems to be a catch phrase laden ball of crap that has no substance.  This is the way he rallied the voters last time and the way he will rally them again this time. 

We elected a catch phrase (Hope and Change) and that's what we have to live with for four years, no substance.  Now he is pushing the term "fair" around and pretending to be the friend of the middle class.  He hasn't shown any substance on those subjects in his first 3 years, I don't think we'll see any substance if he gets re-elected.

Jan 27, 2012 4:43PM
avatar
Facebook will end up like MySpace.  The next great social media site will pop up and people will flee Facebook like rats from a sinking ship.  Never mind the way they alienate their users with privacy issues and other nonsense.
Jan 27, 2012 5:24PM
avatar
i wish they would stop pointing the finger at everybody  and get busy and  fix the  problem  if there is any fix  left
Jan 27, 2012 7:33PM
avatar
Obama said that we are importing less oil to the US in history.

Why is it so high at the pump then,it is January  wait till Labor Day!   

The Kool -Aid is the new flavor of old B/S
Jan 27, 2012 7:35PM
avatar
Coffee cupHockey, Do you real feel it's a good idea to allow a foreign country to build a oil pipe line across are nation so they can export to Europe, how is that going to make us less dependent on foreign oil and you do realize that Canada is a foreign country. Now if we were to stop the pipe line in Oklahoma where we have over 13 Refineries and distribute the gasoline across our country lowering the price here, well now were talking.Auto
Jan 27, 2012 3:01PM
avatar

Yay today is tax day for me. Oh wait I didn't make enough to pay! Yay!Smile

Jan 27, 2012 4:38PM
avatar

"There was some excitement this afternoon on a report in The Wall Street Journal that Facebook intends to file papers for its long-expected initial public offering, perhaps by Wednesday. The company is looking at a valuation of $75 billion to $100 billion, the Journal said"

 

So how many full time sustainable jobs will this create here in America?  I'm sure the hedge fund boys, stock brokers and the other "money-makers" are licking their chops to get in on the action.


Jan 27, 2012 6:13PM
avatar

I got it, I got it and don't repeat it, I got it, you understand?

 

President Obama said he plans on running for re-election against the Republicans. After the tax cuts for the rich, the bailouts for Wall Street, and the bombing in Libya, I already thought he was the Republican candidate."

Jan 27, 2012 5:18PM
avatar

Sorry Classic,

I'll try to keep up but last I saw they were blaming Tebow for the financial crisis and then Obama did his state of the union address and explained that we need to be fair to everyone, especially him and the other Democrats, so I thought we were back to blaming Bush.

Jan 27, 2012 8:43PM
avatar
Max ... the pipeling starts in Canada but then goes through Montana, S Dakota, Nebraska, Oklahoma and Texas. It will bring 15,000 jobs just from the pipeline and 120,000 spin off jobs just to Americans. So, we help employment and get away from our dependence on foreign oil?? So ... what is bad about that? I'm really curios. Obama has got his hands all over Middle East oil ... and his cunning BS about the environment is just that. Total BS. Talk about a guy whose interests are strictly personal.
Jan 27, 2012 8:02PM
avatar
one of many downs for 2012!!!!!!!!!!!!!! more to come.
Jan 27, 2012 6:27PM
avatar
I'M GIVING 3 TO 1 ODDS THAT THIS WON'T BE THE ONLY LOOSING WEEK IN 2012, JANUARYS NOT EVEN OVER YET.
Jan 27, 2012 4:39PM
avatar
Its not Gold or Silver in a bubble, it is a DOLLAR bubble.  The money has to go somewhere...  Real Estate, Specie or Stocks....  Bonds/CD's are dead as FED has decided savings are worth nothing...  Pure capital destruction through easy money....
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