Dow falls 19 despite lower jobless claims

The Dow ends with its fourth straight loss as an early rally falls apart. Jobless claims hit their lowest level since 2008. Sprint Nextel is talking about a deal with Japan's Softbank. Apple slumps. Oil rises on Middle East worries.

By Charley Blaine Oct 11, 2012 12:55PM

Charley BlaineUpdated: 11:27 p.m. ET

 

For a while, it looked like stocks would enjoy a nice rebound after two painful losses.


But the rally gave way as discount retailing and homebuilding stocks gave up recent gains and Apple (AAPL) closed below $630 for the first time since Aug. 10. A U.S. appeals court overturned a decision to ban sales of a new Samsung smartphone. The Dow Jones industrials ($INDU) suffered their fourth straight loss. The Nasdaq Composite Index ($COMPX) fell for the fifth session in a row.


The market opened nicely on a Labor Department report that jobless claims fell to their lowest level in 4 1/2 years. And Wall Street was cheered on news that Sprint Nextel (S) is talking with Japanese telecommunications giant Softbank (SFTBY) about Softbank buying as much as 75% of the U.S. telecom company, The New York Times said. Bloomberg News said a deal might be worth some $13 billion. Sprint shares were up 72 cents to $5.76 after hitting $5.90, a 52-week high.

On Friday, investors will get third-quarter results from JPMorgan Chase (JPM), the nation's largest banking company by assets, and Wells Fargo (WFC), the fourth-largest -- and the nation's biggest mortgage lender. JPMorgan is expected to earn $1.21 a share, up from $1.02 a year ago. Analysts see Wells Fargo earning 87 cents a share, up from 72 cents a year ago.


The Dow closed down 19 points to 13,326. At midmorning the blue chips had been up as many as 84 points. The Standard & Poor's 500 Index ($INX) was barely higher at 1,433, but that was down from an 11-point gain. The Nasdaq was off 2 points to 3,049, also down from an early 11-point gain.


Article continues below.

The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was off 9 points to 2,719.

The market's non-performance reflected the unease many on Wall Street have about the next few months. There is also some belief that traders are selling because they fear a Mitt Romney win in the presidential election.

The reason: Ben Bernanke would probably resign as Federal Reserve chairman, and Romney has suggested he would appoint someone more inclined to raise interest rates rather than let the Fed's stimulus efforts continue.

Apple falls on a court ruling
Apple was the big issue for the Nasdaq and Nasdaq-100. The stock opened up $5.59 to $646.50 but fell steadily for the rest of the session, closing down $12.81 to $628.10. That's down 10.5% from its closing peak of $702.10 on Sept. 19. The shares were higher in after-hours trading, however.

A federal appeals court today overturned a preliminary injunction banning the sale of Samsung Electronics' Galaxy Nexus smartphone. If the device does get introduced to the U.S. market, Apple's iPhone could face significant competition.

Apple has been waging patent infringement suits over the device around the world.

Dollar Tree dismays investors
Another big issue was Dollar Tree (DLTR), which finished down $3.63 to $43.28 after warning its fiscal-third-quarter revenue will come in around $1.71 billion. It earlier projected a range of $1.71 billion to $1.75 billion.

The news surprised investors who see deep discounters as a counter-cyclical trade. The companies often perform better in weak economies than other retailers.

Dollar Tree's drubbing affected its rivals. Family Dollar (FDO) fell $1.89 to $66.11. Dollar General (DG) was off 89 cents to $49.57. Five Below (FIVE) bucked the trend, closing up 12 cents to $35.05.

Meanwhile, U.S. residential foreclosures fell to a five-year low in September as fewer homes were on track to be seized by lenders, according to Realty. September filings in California were the lowest since 2006. But homebuilding shares moved lower.

After hours, Advanced Micro Devices (AMD) shares fell 23 cents, or 7.2%, to $2.97, after warning that third-quarter revenue would fall 10% from the second quarter as chip makers struggle with slumping personal computer sales and the emergence of tablets as a competitive threat.

Gartner said Wednesday that Hewlett-Packard (HPQ) was no longer the top PC maker. HP was up 7 cents to $14.25 today.

Futures trading suggested U.S. stocks should open modestly higher on Friday. In addition to the JPMorgan Chase and Wells Fargo earnings, the Labor Department issues its September Producer Price Index report. The University of Michigan Consumer Sentiment Index also comes out.

Energy prices -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$92.07

$91.25

-0.13%

-6.84%
(per barrel)











Heating oil (-HO)

$3.2571

$3.2131

3.10%

11.77%
(per gallon)











Natural gas (-NG)

$3.6040

$3.4750

8.55%

20.58%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9556

$2.9593

1.22%

11.22%
(per gallon)











Brent crude 

$115.71

$114.33

2.95%

7.76%
(per barrel)











Retail gasoline

$3.8130

$3.8130

0.69%

16.39%
(per gallon; AAA)












Crude oil is up; natural gas is up more
Crude oil prices surged early in the day on news of rising Middle East tensions. Turkey forced the landing of a Syrian jet that was flying to Damascus from Moscow. But the surge has faded. Light sweet crude (-CL) settled up 82 cents to $92.07 a barrel after rising nearly to $93. Energy stocks were higher on the news.

Natural gas had a better day, rising 12.9 cents, or 3.7%, to $3.604 per million British thermal units, their highest settlement of the year after Energy Department showed a smaller-than-expected rise in U.S. gas storage levels.

Morgan Stanley analysts see gas moving up to $5 per million BTU by the first quarter of 2013.

But is the price run-up -- 87% since April 20 -- justified? Maybe not. The domestic natural gas inventory -- 3.725 trillion cubic feet -- is still a record for this time of the year, Dow Jones News said. And traders are betting on normal winter temperatures.

Gold settled up $5.50 to $1,770.60 an ounce. The dollar was lower against major currencies.

The 10-year Treasury yield was at 1.677%, down from Wednesday's 1.691%.

Sprint and Softbank: Potentially a complicated deal
A Sprint-Softbank deal may also involve Clearwire (CLWR), the cellphone-tower operator. Sprint owns about 49% of Clearwire, and CNBC's David Faber reported that Sprint would buy Clearwire before a deal with Softbank comes together.

Clearwire was up 92 cents to $2.22.

The attraction of the deal to Sprint is that it would provide the resources to build out its 4G network and compete more effectively with AT&T (T) and Verizon Wireless, half-owned by Verizon Communications (VZ).

AT&T was down 66 cents to $36.26. Verizon was off 58 cents to $45.20. They were the worst and third-worst performers among the 30 Dow stocks. Also lower: MetroPCS (PCS), off 40 cents to $11.64. MetroPCS has agreed to merge with T-Mobile, but there had been speculation Sprint might be a bidder as well.

Some decent news on jobs
Initial jobless claims fell to a seasonally adjusted 339,000 in the week ended Oct. 6. That was the lowest level since early 2008.

There was some controversy about the number because the unadjusted read was 327,063, up 26,000 from a week ago. The factor used to make the adjustment was "aggressive," Nomura Securities' Ellen Zentner wrote today.

About half of the seasonally adjusted decline came from one state, which the Labor Department will identify next week.

Zentner's note said -- as many economists often say -- that the four-week moving average is a better way to gauge the trend. The average was 364,000 in today's report, down 11,500.

And, she added, "What the claims data tell us is that the weak pace of net job gains (up 114,000 in September) is more a factor of weak hiring, rather than increased layoffs."

Fastenal has a big quarter
Fastenal (FAST) jumped $3.57 to $45.89. The largest U.S. retailer of nuts, bolts and other fasteners reported sales in the third quarter were $802.6 million, exceeding the average analyst estimate of $801.4 million. Daily sales growth in September was 13%, up from 12% in August.

Realogy Holdings (RLGY) shares were up $7.20 to $34.20 on their first day of trading after hitting as high as $34.90. The real-estate brokerage company controlled by Apollo Global Management raised $1.08 billion in its initial public offering, pricing the shares at the top of the planned range.

Safeway (SWY) tumbled 58 cents to $15.71. The second-largest U.S. grocery chain posted third-quarter sales that trailed analysts’ estimates as bargain-hunting shoppers made it harder to boost prices.

Winnebago Industries (WGO) fell 33 cents to $11.87 even as the motor-home maker reported increased quarterly profit and a rising backlog of orders.

Energy and financials lead the market
Higher energy prices translated into higher prices for energy stocks. Chevron (CVX) was up 61 cents to $113.06. ConocoPhillips (COP) added 5 cents to $56.63. Chesapeake Energy (CHK), the second-largest natural gas producer, jumped 79 cents to $20.14.

Coal producer Peabody Energy (BTU) added $2.15 to $26.18.

Financials were paced by Bank of America (BAC), UnitedHeath (UNH), American Express (AXP), JPMorgan Chase (JPM) and Aetna (AET).

Twelve of the 30 Dow stocks were higher, along with about 311 S&P 500 stocks and 59 Nasdaq-100 stocks. Remember: Apple represents around 4% of the S&P 500's total market capitalization and 17% of the Nasdaq's total market cap.

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.100%

11.11%

900.00%
5-year Treasury note 

0.663%

0.660%

5.24%

-20.12%
10-year Treasury note

1.675%

1.691%

2.32%

-10.48%
30-year Treasury bond

3.032%

3.032%

0.00%

4.95%
Currencies











U.S. Dollar Index

79.86

80.017

-0.21%

-0.82%
British pound

1.6044

1.6003

-0.72%

3.26%
(in U.S. $)

 








U.S. $ in pounds

£0.623

£0.625

0.73%

-3.15%
Euro in dollars

$1.29

$1.29

0.69%

-0.12%
(in U.S. $)

 








U.S. $ in euros

€ 0.773

€ 0.778

-0.68%

0.12%
U.S. $ in yen 

78.68

78.16

0.91%

2.05%
U.S. $ in Chinese

6.30

6.29

0.28%

-0.43%
yuan











Canada dollar

$1.023

$1.019

0.64%

4.30%
(in U.S. $)

 








U.S. dollar 

$0.978

$0.982

-0.56%

-4.12%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,770.60

$1,765.100

-0.19%

13.01%
(per troy ounce)

 








Copper (-HG)

$3.752

$3.718

-0.17%

9.18%
(per pound)

 








Silver (-SI)

$34.0820

$34.109

-1.43%

22.09%
(per troy ounce)

 








Wheat (-ZW)

$8.8600

$8.698

-1.83%

35.73%
(per bushel)

 








Corn (-ZC)

$7.7325

$7.368

2.25%

19.61%
(per bushel)

 








Cotton 

$0.7071

$0.721

0.08%

-22.87%
(per pound)

 








Coffee

$1.6075

$1.635

-7.35%

-30.00%
(per pound)

 








Crude oil (-CL)

$92.07

$91.250

-0.13%

-6.84%
(per barrel)










 

525Comments
Oct 11, 2012 2:37PM
avatar
Hey the left complained about the BLS when Bush was in. Claiming the numbers were fixed.
I don't know if they are fixed, but I do think the calculation is very suspect.
Couldn't the IRS report since they get Tax money in and are the ones who would know best how many people are working...

Just a question.
Oct 11, 2012 2:36PM
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If you really think all the conspiracy theories are only from the right then sounds like you have made up your mind before you hear the question.  No point for debate.
Oct 11, 2012 2:36PM
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MSN IS  not allowing comments earlier in the day......controlling. They will do anything to get Obama elected....................even with Obamas cover ups!!!!  UNBELIEVABLE!
Oct 11, 2012 2:36PM
avatar

The mother of Sean Smith, one of the four foreign service officers killed in the attack on the U.S. consulate in Libya, said Wednesday that she "begged" officials in the Obama Administration for information about her son's death, but believes she only been told “outright lies” about the details of the Sept. 11 terrorist attack.

"I begged them to tell me … what happened. I said I want to know all the details, all of the details no matter what it is, and I'll make up my own mind on it," Pat Smith told CNN. "And every one of them, all the big shots over there told me that -- they promised me, they promised me that they would tell me what happened."

Oct 11, 2012 2:35PM
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DHL ... where is your evidence??? So much pessimism  .. where is the confident America we once had!!! 
Oct 11, 2012 2:32PM
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I have a question for the right leaning people on this post. Who do you think controls the stock market? Do you think it's the 47% Mitt Romney doesn't care about? Or, the 30% Paul Ryan doesn't care about? Or, the 1% who are putting all their millions behind Mitt? They've made a fortune under Obama, but they are backing Mitt!! Don't you conspiracy theorists find that to be just a little coincidental? The marked slumps or starts to slump ON MOSTLY SPECULATION 4 weeks before the election? For all of you into conspiracies, this should be a red flag! Oh, wait, I forgot, it's only a conspiracy if it's working against Republicans! Give me a break! Once again, the numbers should be higher, just like the drops were not justified earlier in the week. If they think we don't know this, they are as ignorant as some of the people posting on this site!
Oct 11, 2012 2:31PM
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The leftist media is once again parroting the administration without question.  The job numbers omitted the reporting's of an entire state.  Sadly, the media are becoming irrelevant and without a conscious.  When will the manipulations become an embarrassment?
Oct 11, 2012 2:31PM
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@Jeff

 

Where did you get that info on Obummer and Hillary?  I've been on MSN this morning and have heard nothing about Obummer coming down on Hillary.

Oct 11, 2012 2:29PM
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The REAL Unemployment Numbers would be great if they were the truth and not lies to make either side look good, not played, manipulated,or even changed to make either side look good, so I believe in REAL REALITY not FICTION, this is our lives they are playing with now!
Oct 11, 2012 2:29PM
avatar
Obama writes his own Constitution


Washington Post - October 11th, 2012

When on Jan. 20, 2009, Barack Obama swore to defend the Constitution, he did not mean all of it. He evidently believes that the provision quoted above merely expresses the Framers’ now anachronistic anxieties about abuses of executive power. (Jefferson’s lengthy catalogue of George III’s abuses is called the Declaration of Independence.) So on Jan. 4, 2012, Obama simply ignored the Recess Clause.

He was in his “We can’t wait!” — for Congress and legality — mode, as he was when he unilaterally rewrote laws pertaining to welfare, immigration and education. On Jan. 4, he used recess appointments to fill  (NLRB), even though the Senate said it was not in recess. Obama’s cheeky Humpty Dumpty rejoinder was: I decide what “recess” means. Now a court must decide whether the Constitution means what it says.

Oct 11, 2012 2:26PM
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Sorry you are wrong.

Please indicate when the Left has said the numbers are fake.

On the contrary all the conspiracy theories come from the RIGHT.!
Oct 11, 2012 2:26PM
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Obama called a late night meeting with Hillary last night to chew her a$$ over the congressional hearings in which she pretty much admitted what we all knew. The video had nothing to do with the Libya terrorist attack. In fact, there was not even a protest at all. 

Not a single word of this from the MSM this morning.


avatar

Ok folks the stock market is still going into it's final descent to zero.

 

The western economies as we knew them are now gone and all your 401K and stock market money is going with them.

 

If you are not out of the stock market now is the time to do it.

 

SELL SELL SELL SELL

Oct 11, 2012 2:25PM
avatar
Evil Chris: I'm not a conspiracy guy. 
I did just find out however that the BLS left out California's unemployment #.


If I was the head I would delay the report rather that have to update it each week,. Every week it's changed up, not down.
Oct 11, 2012 2:21PM
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Rome....... you really are delusional if you think these blogs can move the market.
Oct 11, 2012 2:20PM
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When the numbers are good for Obama the right says they are fake.

When the numbers are good for Romney the left says they are fake.

Is it all one big conspiracy or do the numbers sometimes prove your opinions wrong?

Oct 11, 2012 2:19PM
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I know for a fact that the unemployment numbers are a joke and not real, due to the fact that you are kicking people off of there benefits as well as people just taking part-time job because they have no other choice and can't get full-time jobs, I live in the state of IL and have been unemployed for almost a year have 20 years of work experience and can't even get Target, Lowe's, Sear's or Kmart to call me to come to work for part-time what a joke and my benefits are also running out very soon, I have two children and a wife, been trying since I lost my job to find another job, so tell me why can't I find a job or get a job if the job market is turning around so good and the unemployment numbers are dropping so much, BS is what it is BS!
Oct 11, 2012 2:18PM
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The things that this media lets the Prez get away with are criminal
Oct 11, 2012 2:18PM
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Conspiracy theorists and non believers, the Market seems to be responding to your  senseless assertions and has lost all its gains ... this is stupidity in the extreme.
Oct 11, 2012 2:18PM
avatar
Whoo Hoo!!! A decline in jobless claims for an ENTIRE month in a row! It's over! The recession is over!!! Yay!!! Obama IS the Messiah after all...Jesus Christ, liberals are idiots...
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