Dow falls 19 despite lower jobless claims

Updated: 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.

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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-expecte​d 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)