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

Rich powerful business men contribute large sums of money to Obama and Romney.

 

Thumbs up = True Statement

Thumbs down = False Statement

 

Lets see how many honest people are on this blog.

Oct 11, 2012 1:25PM
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Yes, we know we are adding 300K+ seasonal jobs right now.
If you work 1 hour a week you are employed.
Oct 11, 2012 1:34PM
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LIES and BullSheeit for a record umpteenth time...

 

Unemployment down only on exhausted benefits...

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 2:19PM
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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 2:47PM
avatar

The glaring fact remains that fewer and fewer people are in the workforce.

 

Number cooking, conspiracy theory, etc. all left to the side. Even in today's report we find out that an entire state, the largest via GDP for that matter was left out of this "accounting".

 

In any case anyone with any sense in their heads realize that the reported "job gains"  on a monthly basis is barely enough to keep up with those naturally entering the workforce. On the other side of the coin the "jobless" numbers dipping ever so slightly are reducing because those on unemployment for chronic periods of time have dropped from the rolls counted.

 

In the end, and very sadly for all of us the only reason we have an unemplyment rate under 10% as reported to us is the fact that millions upon millions have simply left the workforce permantley and/or run out of unemployment benefits. Many finding themselves seeking disability or other means of more permanent government dependence.

 

I only ask that people check into these numbers and understand how they are derived and what they actually mean. Don't take what the talking heads of the media tell you as the truth. Cross check and reference what you are told and you will see how misleading both the media and our government is to all of us.

 

Wake up folks.

 

 

Oct 11, 2012 2:51PM
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Congress passed a law (M.O.V.E) that every service man and women will have every opportunity to vote. Every foreign military facility was to establish a voting office to get soldiers registered and get them ballots. 

As of yesterday, the Obama administration has not complied. This news coming from the Dept Of Justice.

They want to make sure every NON-Citizen in the country has a vote but not the military. Wonder why?
Oct 11, 2012 2:10PM
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The unemployment numbers today were compiled from a missing submission from one of the 57 states, California. California did not submit their numbers in time for them to be added to todays report. Wall Street knows todays initial number is a scam.
Oct 11, 2012 3:14PM
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You know California did not turn their unemployment in this month?
Oct 11, 2012 2:52PM
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The Military Voter Protection Project found that the Federal Voting Assistance Program and Pentagon have failed to comply with the MOVE Act, the law that is supposed to prevent our military members from being disenfranchised. The DoD Inspector General confirms those findings.

How can that be?

The answer may lie in the newly released Military Times Presidential poll.  66% of the military members polled plan to vote for Mitt Romney while only 26% plan to vote for Obama.

Oct 11, 2012 2:02PM
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LOL, the numbers reported do not include California. This is a joke .....no it is a nightmare. The election cant get here fast enough.
Oct 11, 2012 1:11PM
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"Wall Street climbs on lower jobless claims"

Hey, just think how the market would SOAR if they just cut off all unemployment benefits, instead of just the ones that run out!

The jobless claims would drop to ZERO, the market would go through the roof, and Obama would be a hero!!!!!!!!!!!!!!!!​!

Never mind that the economy would still SUCK!!!!!!
Oct 11, 2012 2:39PM
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oil at 92.09 doesn't make since when gas is still 4.08 in ct. or more in other places, what the hell is obama doing with all this money.  when oil was going for 145 a barrel i was paying 4.35, something doesn't seem right to me. freak in wall street, hope you get screwed. looks to me people are starting not to believe the job data, i don't, little fishie to me when i just left unemployment office and the vet man told me that if we have this idiot in office the next 4 years we are screwed as a country, no crap, China will own us or russia, the people that voted this idiot in hope you all made alot on hope and change because all i got was the change in my pocket, nobama in november.

 

Oct 11, 2012 3:06PM
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Can one of you liberals explain to me what part of the Obama promised transparency in government got blocked or stopped by the evil Tea Party???
Oct 11, 2012 3:14PM
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Read the following........sure this was unintentional.

A sharp drop in the number of weekly jobless claims filed last week was caused by the failure of one large state to report all of its claims, a Labor Department spokesman confirmed to FOX Business.

Read more on Foxnews.......you sure won't find it here.

Oct 11, 2012 3:28PM
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ABC = all barack coverage
CBS = completely Barack station 
NBC = nonstop Barack channel
Oct 11, 2012 2:41PM
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Asked by CNN host Anderson Cooper if she still did not know her son's cause of death, she said she didn't "even know if that's true or not."

"No, I don't. I don't know where. I look at TV and I see bloody hand prints on walls, thinking, my God, is that my son's? I don't know if he was shot. I don't know — I don't know. They haven't told me anything. They are still studying it. And the things that they are telling me are just outright lies," Smith said.

Smith also said that Obama administration officials, including U.N. Ambassador Susan Rice and Secretary of Defense Leon Panetta personally told her that her son's death was the result of a protest surrounding an anti-Islam film.

The State Department said Tuesday that there was not a protest proceeding the attack.

The Obama administration initially blamed the Benghazi violence on the Muslim protests against the anti-Islam film, an explanation that was questioned by many GOP lawmakers. The White House later said additional information showed that the attack had been planned.

Smith also said she told the president that he had "screwed up."

"I told Obama personally, I said, look, I had him for his first 17 years and then he went into the service, then you got him. And — I won't say it the way I said it. But I said you screwed up, you didn't do a good job, I lost my son," Smith said.

Oct 11, 2012 1:28PM
avatar

I pose this as a serious question.

 

Are things getting better or have they stopped getting worse?

 

.

Oct 11, 2012 1:44PM
avatar
You mean "Good jobs propaganda boosts Wall Street lie machine." Right?

How many American's unemployment insurance benefits ran out this month? And how many of these Americans remain unemployed? And where are they now? How many are living in cars? How many in SUVs? How many are living on the street?

And, how many confiscated box cutters are being used by police officers to shred the tents of the homeless everywhere in America?

How about reporting on the true health of the country, rather than on the qualitiatively eased (QE) health of Wall Street. Got a soul?
Oct 11, 2012 2:31PM
avatar
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?
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