Dow off 125; stocks close at 3-month lows
Greece appears headed toward another election; European stocks slump. The Dow suffers its eighth loss in 10 days. Facebook boosts its price range. JPMorgan's chief investment officer leaves in the wake of its huge trading loss.
Stocks fell to their lowest levels since early February today as investors looked at Europe and hated what they saw. While the market did find substantial support in the midmorning, late selling pushed the major indexes lower again.
The problems: Greece can't form a government and may well have to hold another round of elections, and it's hard to find anyone who sees the country staying in the eurozone. Stock markets across Europe were lower by 2% or more. Yields on Italian and Spanish bonds jumped to levels that many consider burdensome.
In addition, JPMorgan Chase (JPM) shares were off $1.17 to $35.79 after Ina Drew, the bank's chief investment officer, retired after presiding over JPMorgan's $2 billion trading loss, which was announced last week. She had earlier offered to resign. The stock is down nearly 22% since hitting a 52-week high on March 28.
Late today, The Wall Street Journal reported that Facebook and its investment bankers have raised the price range on Facebook's initial public offering to $34 to $38 a share from $28 to $35 in a sign of intense investor interest in the offering. The price boost could make company worth $104 billion.
The Dow Jones industrials ($INDU) closed down 125 points to 12,695. The blue chips had been down as many as 159 points. The Standard & Poor's 500 Index ($INX) was off 15 points to 1,338. The Nasdaq Composite Index ($COMPX) fell 31 points to 2,903. The Nasdaq-100 Index ($NDX) dropped 26 points to 2,590.
The turmoil in Europe pushed many investors to seek safety, which meant Treasury securities. U.S. interest rates were lower. Gold (-CL) fell $23 to to $1,561 an ounce. Gold is now off 0.4% for the year. Crude oil (-CL) dropped below $95 a barrel.
Apple (AAPL), the biggest influence on the Nasdaq-100, was down $8.49 to $558.22, subtracting 7 points from the index. The stock is down 12.9% from its intraday peak of $644, reached on April 10, and 11.8% from its closing high of $636.23, set on April 9.
Groupon earnings cheer investors
Deal-site Groupon (GRPN) shares were up roughly 13% after hours to $13.25. The stock jumped $1.84 to $11.74 in regular trading. The company reported first-quarter earnings of 2 cents a share. Analysts had expected a penny a share. The stock hit $31.14 on Nov. 4, its first day of trading and, until today, has traded mostly lower, closing Friday at $9.90.
Revenue was $559.3 million, up from $295.5 million in the first quarter 2011 and up about $67 million from fourth-quarter revenue of $492 million.
The company's earnings were a big improvement over a year ago when the company lost 41 cents a share. At the time, Groupon was still private.
The market's reaction to the results are being closely watched as a barometer of Facebook's initial public offering, due to be priced on Thursday.
Market slide continues
The stock market has been quietly sliding for a bit more than a month, giving up roughly half of its gains for the year in the process.
The Dow is off 4.4% since its 2012 peak on May 1. The S&P 500 is down 5.7% since its closing high on April 2. The Nasdaq is down 7.1% since its closing high on March 26.
Something to watch: The S&P 500 finished the day below 1,340, an important support level that has tended to generate buying. To technically minded investors, the index's close suggests the market swoon is not done.
For the year, the Dow is still up 3.9%, with the S&P 500 up 6.4% and the Nasdaq up 11.4%.
Tuesday: Big earnings ahead
Tuesday brings some heavyweight earnings: Home Depot (HD), Dick's Sporting Goods (DKS), J.C. Penney (JCP), TJX Companies (TJX) and Saks (SKS), the parent of Saks Fifth Avenue.
The government reports on retail sales and the consumer price index, both for April. A number of European countries report on their economic growth.
Futures trading suggests stocks will bounce higher at the open.
Financial and energy stocks lead the market lower
This should not be a big surprise, given the decline in oil prices and the problems in Europe and swirling around JPMorgan.
None of the 10 sectors of the S&P 500 showed a gain.
Only two of the 30 Dow stocks were higher: Cisco Systems (CSCO), up 20 cents to $16.71, and pharmaceutical giant Merck (MRK), up 19 cents to $38.23. The laggards were JPMorgan and Bank of America (BAC).
Meanwhile, 161 S&P 500 stocks were higher, led by BMC Software (BMC), up $3.52 to $43.92 on takeover speculation, and Chesapeake Energy. The laggards were Akamai Technologies (AKAM) and Pitney Bowes (PBI).
And 18 Nasdaq-100 stocks were higher, led by BMC Software and Vertex Phamaceuticals (VRTX), up $2.68 to $64.70. The laggards were XM Sirius Radio (SIRI) and Akamai Technologies.
|Energy prices -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|Crude oil (-CL)||$94.78||$96.13||-9.62%||-4.10%|
|Heating oil (-HO)||$2.9295||$2.9636||-8.00%||0.53%|
|Natural gas (-NG)||$2.4310||$2.5090||6.39%||-18.67%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.9590||$3.0008||-5.30%||11.35%|
|(per gallon; AAA)|
Greece's political stalemate
Greek political leaders stuck to entrenched positions before another round of coalition talks on Monday, dashing hopes of a last-minute compromise to avoid a new election that risks pushing the country closer to financial default.
Greece's political landscape has been in disarray since an inconclusive election on May 6 left -arliament divided between supporters and opponents of a 130 billion-euro ($168 billion) bailout organized by the European Union and the International Monetary Fund, with neither side able to form a government.
With the country set to run out of money as early as next month and no government in place to negotiate the next aid tranche, investors are betting that a long-speculated Greek default and euro exit will happen sooner rather than later.
The issue is whether Greece will accept extreme austerity to get its debt under control or the financial chaos if it leaves the eurozone -- nations that the use the euro as their currency.
More change ahead at JPMorgan?
The retirement of JPMorgan's Ina Drew is just the start of what is expected to be a house-cleaning in its corporate division.
The group put on a very complex trade to protect Morgan against European financial turmoil. Instead, the trade went badly, saddling the company with its huge loss.
Yahoo shares gain after CEO departs
Yahoo (YHOO) shares were up 31 cents to $15.50 today. Scott Thompson resigned as CEO on Sunday, and the company has reached a settlement with activist hedge fund manager Daniel Loeb's Third Point.
Before he resigned, Thompson disclosed to the company's board that he has been diagnosed with thyroid cancer, according to reports.
For all its turmoil, the company's shares are off just 3.6% this year. The shares, however, are still down nearly 50% from their peak after Microsoft (MSFT) made a $44 billion bid for the company in 2008. (Microsoft publishes MSN Money.)
Yahoo's future remains murky at best. The company has struggled to compete against Google and Microsoft's Bing search engine. Yahoo's share of search advertising has been declining. And it is now for its sixth CEO since the turn of the century.
Chesapeake share rise
Chesapeake Energy (CHK) shares were up 71 cents to $15.52. Late Friday, the big natural-gas producer said it had received a $3 billion loan from Goldman Sachs (GS) and Jefferies Group (JEF), giving the company more time to sell assets and lower its debt. Earlier in the day, Chesapeake said it might have to delay some planned asset sales because of debt agreements it had. Over the weekend, reports said Chesapeake expects activist shareholder Carl Icahn to disclose he has taken a significant stake in the oil and gas company.
Best Buy (BBY) added 28 cents to $19.56, its first gain since May 1. Founder Richard Schulze will step down as chairman after a probe found he failed to tell the board about allegations that then-Chief Executive Officer Brian Dunn was having an inappropriate relationship with a female employee. The probe also said Dunn did not use company resources while having what it termed "an inappropriate relationship" with a female employee. Schulze will be replaced by Hatim Tyabji, chairman and CEO of Bytemobile, which provides video optimization and traffic management systems for mobile network operators.
Avon Products (AVP) shares were up 77 cents to $20.96. The company is considering a buyout offer from Coty that it previously rejected after Coty lifted the terms of the deal, Avon said Sunday. Coty said last week that it would increase its bid for Avon to $24.75 a share, or almost $10.7 billion, from its previous offer of $23.25, or $10 billion. Warren Buffett's Berkshire Hathaway (BRK.B) has agreed to help finance a deal.
The dollar is a hot property -- for the wrong reason
With all the turmoil in Europe, money flowed into the U.S. dollar. The euro fell to $1.284 against the dollar, its lowest level since Jan. 17. As a result, interest rates and many commodity prices fell.
The U.S. Dollar Index, which measures the greenback against a basket of currencies, settled at 80.748, its highest close since March 14. It was also the index's 11th straight gain, something not seen since the summer of 2008.
Gold fell to as low as $1,555 an ounce before rebounding slightly.
Crude oil fell $1.35 to $94.78 a barrel in New York, a level not seen since early November. Brent crude, the benchmark North Sea oil, was down $1.18 to $111.08.
The national average price for unleaded gasoline was off slightly to $3.727 a gallon today from $3.728 on Sunday and $3.734 on Friday, according to the AAA Daily Fuel Gauge Report. The price is down 20 cents from its high in early April.
The 10-year Treasury yield fell to 1.788% from 1.841% on Friday.
|Short hits from the markets -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0900%||0.090%||0.00%||800.00%|
|5-year Treasury note||0.721%||0.748%||-11.10%||-13.13%|
|10-year Treasury note||1.788%||1.841%||-6.63%||-4.44%|
|30-year Treasury bond||2.949%||3.015%||-5.15%||2.08%|
|U.S. Dollar Index||80.748||80.404||2.41%||0.28%|
|(in U.S. $)|
|U.S. $ in pounds||£0.620||£0.622||0.75%||-3.62%|
|Euro in dollars||$1.29||$1.29||-2.98%||-0.81%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.778||€ 0.776||3.07%||0.82%|
|U.S. $ in yen||79.94||79.96||-0.08%||3.68%|
|U.S. $ in Chinese||6.34||6.31||0.67%||0.27%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$94.78||$96.13||-9.62%||-4.10%|
Ina Drew, the bank's chief financial officer, retired after presiding over JPMorgan's $2-billion trading loss, announced last week. She had earlier offered to resign.
I asked Barack what the problem was with Greece and he told me that "It was George Bush that caused this just like the Tsunami, the Gulf Oil Spill, J.P Morgan losing $2 Billion, A real unemployment rate of 17% +or-, and everything else bad that has happened over the past three years.
But don't get too down on yourself George; he is ging to have to leave you alone and start blaming things on Mitt pretty soon!!!
max your boy obame is going to top 6 Trillion in 4 years and owe more He will not make it back
Did ya really think that the socialists in Europe were going to accept austerity. The people there have been on the dole for so long they they have become parasites not only on their own countries but now have infected the entire world.
At home we have massive unfunded pension obligations in both private industry and in many states. How long before we go the same way as Greece, Spain, France, Italy...........
Mr.Kyte, I agree, Republicans took a balanced budget and over spent by $5 trillion dollars in 8 years, leaving the American people with a parting gift of a $1.3 trillion dollar annual deficit in 2009. Who in their right mind would re-hire someone who committed a screw up of that magnitude. It makes one question the intelligence of the American people and Mr. Kyte
Frr the life of me, I can't believe people are still ignorant - or foolish enough - to believe that this president is worthy one. Case in point:
1.) Fast and Furious gun running debalce:
U.S. Attorney General Eric Holder has been withholding key documents about Fast and Furious from Congress and has been consistently stonewalling U.S. Representative Darrell Issa, U.S. Senator Chuck Grassley and other members of Congress that have attempted to look into this matter. Allowing guns to fall into the hands of Mexican drug cartels. Thank God for the whistle blowers.
2.) Solyndra, which got $535 million in federally-backed stimulus act loans and was heavily touted by the Obama admin, abruptly declared bankruptcy late last month, then was raided by the FBI.
With President Obama seeking a fresh $447 billion government injection to boost the stalled economy, the GOP is touting the Solyndra debacle as evidence the last stimulus failed. And some have gone farther, including party chairman Reince Preibus, who suggested Solyndra investors got a sweet deal on the loans because one investor -- George Kaiser -- is an Obama fundraiser." (Huffington Post, 2011).
3.) G.E. and CEO Immelt:
How about Obama hiring Jeff Immelt, the CEO of GE. And in 2010:
"The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion. (New York Times , 2011).
I'm just saying...
Here comes the Train....and I thought there was a light at the end of the tunnel.....
Suckers of the world unite ....LOL
LOW? well, lower is in sight!!!!!!!!!!!!
JUST ELECT BARACK OMBAMA FOR ANOTHER TERM AND PREPARE TO DIVE...........
Now all I'm waiting for is the damage control commitee to set the propaganda machine in motion spewing forth how Greece is mending itself, how things are getting better etc. all in an attempt to make things appear that all is well when the TRUTH is that Greece will continue to struggle, unemployment is well over 20%, their pension funds will be depleted which will only cause riots and more unrest all of which will only discourage tourists from visiting Greece which will impact one of their main revenue generating industries and things will get worse. They will not pay back the loans so to continuing giving money to them is just a major waste. Maybe the Michigan Consumer Confidence Survey should call a few Athens numbers to see how consumers there really feel about the economy now that we are a "global society"....
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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