Dow falls 44 as economic worries grow
Weakness in energy stocks keeps the market in check. Apple hits a new high. Home prices fall in January and may be headed lower. Higher gasoline prices weigh on consumer confidence. Natural gas hits a 10-year low.
Updated: 9:47 p.m. ETThe stock market fell modestly today as gains in technology stocks faded and energy and telecom shares were weak. The culprits were declines in home prices and consumer confidence.
The market was unable to capitalize on Monday's rally, which saw the Dow Jones industrials ($INDU) jump 161 points. Still, the major averages are headed toward their best first-quarter finish in at least 14 years.
The market's weak performance came despite 107 stocks hitting all-time highs, including Apple (AAPL), Starbucks (SBUX), Sherwin Williams (SHW), McCormick (MKC) and Costco Wholesale (COST). Chevron (CVX), Exxon Mobil (XOM), Schlumberger (SLB) and BP (BP) all struggled as crude oil (-CL) was initially lower in New York and natural gas (-NG) hit a 10-year low.
It was a day of contradictions: Home prices were down slightly in January, according to the 20-city Standard & Poor's Case-Shiller Index. Consumer confidence slipped because of higher gasoline prices, The Conference Board said today. But, as IHS Global Insight's Chris Christopher noted, "Oddly enough, more Americans expect to buy a car, a home or a major appliances within six months."
The Dow closed down 44 points to 13,198. The blue chips have been trading in a narrow range of about 71 points. The Standard & Poor's 500 Index ($INX) was down 4 points to 1,413, and the Nasdaq Composite Index ($COMPX) slipped to a loss of 2 points to 3,120. However, the Nasdaq-100 Index ($NDX), which tracks big-cap Nasdaq stocks, was up 4 points to 2,782. Apple, up $7.50 to $614.48, contributed about 6 points of the gain by itself. The shares hit an all-time high of $616.28.
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In fact, only 35 of the Nasdaq-100 stocks were higher, along with seven of the 30 Dow stocks and 177 S&P 500 stocks.
On the other hand, the market continues to be resilient, resisting any major selling efforts. The S&P 500's low was just below 1,412, and it ticked up at the close. The index is up 3.4% this month and 12.3% for the year.
The Nasdaq is up 5.2% in March and 19.8% for the year. The Dow is looking at a 1.9% gain for the month and is up 8% this year. The Dow's and the S&P 500's quarterly performances are their best since 1998. The Nasdaq's quarter is its best since 1991.
Futures trading suggests the U.S. market will open higher on Wednesday. The big earnings reports are due from fertilizer maker Mosaic (MOS) and payroll processor Paychex (PAYX). The big economic reports are a Commerce Department report on durable goods orders and the Mortgage Bankers Association's weekly report on mortgage applications.
Crude oil moves higher
Crude oil settled up 33 cents to $107.33 a barrel. Brent crude was down 11 cents to $125.54. The conventional wisdom seems to be that traders were buying because they like the trend in the U.S. economy.
Natural gas settled at $2.208 per million British thermal units, down 1.8 cents. It had fallen to as low as $2.2176.
The retail price of gasoline, however, was up slightly to $3.898 from Monday's $3.897.
Gold (-GC) settled down 70 cents to $1,684.90 an ounce. Silver (-SI) had dropped 13.4 cents to $32.616 an ounce, and copper (-HG) had fallen 0.75 cents to $3.88 a pound.
The metals declines, as well as declines in corn and wheat, may well be due to a rising dollar.
Interest rates, meanwhile, were lower, with the 10-year Treasury yield at 2.187%, down from Monday's 2.244%.
| Energy prices -- New York close | ||||||||||||
| Tues. | Mon. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $107.33 | $107.03 | 0.24% | 8.60% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $3.2360 | $3.2465 | 0.94% | 11.04% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.2080 | $2.2260 | -15.60% | -26.13% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $3.3864 | $3.3987 | 3.97% | 27.43% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $125.54 | $125.65 | 2.35% | 16.91% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.8980 | $3.8970 | 4.48% | 18.99% | ||||||||
| (per gallon; AAA) | ||||||||||||
Could home prices fall more?
The S&P Case-Shiller home price index fell 0.8% in January and 3.8% year over year on an unadjusted basis. On an adjusted basis, the index was unchanged from December. Economists expected prices to drop 0.2%, according to estimates from Thomson Reuters.
The report followed a slew of recent data pointing to a still-weak housing market. "Prices are bottoming but not necessarily turning upwards," wrote Dan Greenhaus, strategist with BTIG.
"Historically, housing bubbles tend to see home prices on average bottom out six years after peaking. As such, if the United States were to suffer a decidedly average housing crash, this summer would mark the point at which prices should begin turning upwards on a sustained basis."
Meanwhile, The Conference Board's consumer confidence index pulled back to a reading of 70.2 in March, falling short of expectations of 70.4 and down from 71.6 in February.
"It appears that the increase in gasoline prices, which are now inching close to the $4-a-gallon mark, was the dominant factor taking a toll on consumer sentiment," said Amna Asak, an economist with Capital Economics. "The dip in confidence is a good reminder that consumption growth will be solid, but not spectacular."
But declining home prices may not be a bad thing.
Homebuilder Lennar (LEN) reported better-than-expected results for the fiscal first quarter and CEO Stuart Miller said the company has "seen the market stabilize, driven by a combination of low home prices and low interest rates."
Lennar shares were up $1.23 to $27.63, and homebuilding shares generally were higher. PulteGroup (PHM) added 27 cents to $9.06. D.R. Horton (DHI) was up 34 cents to $15.77. Luxury builder Toll Bros. (TOL) rose 75 cents $24.40.
Toll Bros. CEO Douglas Yearly told CNBC today that 2012 has so far been its strongest year for sales in five years. The company is seeing strength from Washington, D.C., to Boston, Texas and parts of California. It still sees weak markets in Las Vegas and Reno, Nev.
Apollo shares drop on forecast
While Apollo Group (APOL), the for-profit education company, trounced Wall Street's fiscal-second-quarter expectations, the company said enrollments are likely to be volatile. Shares fell $3.66 to $39.54. Apollo reported earnings from continuing operations excluding one-time items of $73.8 million, or 58 cents a share, for the quarter ended Feb. 29. Revenue of $969.6 million beat the Street estimate of $933.3 million.
Walgreen (WAG) shares were up 43 cents to $34.80. The company reported fiscal-second-quarter earnings Tuesday of 78 cents a share on sales of $18.7 billion. Analysts were expecting profit of 77 cents a share on sales of $18.58 billion. The company said the effect of no longer being part of the Express Scripts (ESRX) pharmacy provider network as of Jan. 1, 2012, impacted earnings by 7 cents a share.
Bausch & Lomb, the privately held eye-care company, agreed to acquire Ista Pharmaceuticals (ISTA) for roughly $500 million in cash to expand its eye health portfolio. The acquisition price of $9.10 a share represents a 9% premium to Ista's closing price on Monday. Ista shares jumped 66 cents to $9.04.
| Short hits from the markets -- New York close | ||||||||||||
| Tues. | Mon. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0800% | 0.070% | 0.00% | 700.00% | ||||||||
| 5-year Treasury note | 1.020% | 1.081% | 16.57% | 22.89% | ||||||||
| 10-year Treasury note | 2.187% | 2.244% | 10.62% | 16.89% | ||||||||
| 30-year Treasury bond | 3.300% | 3.330% | 6.93% | 14.23% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 79.222 | 79.179 | 0.54% | -1.61% | ||||||||
| British pound | 1.5967 | 1.5977 | 0.21% | 2.76% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.626 | £0.626 | -0.21% | -2.69% | ||||||||
| Euro in dollars | $1.33 | $1.34 | -0.03% | 2.93% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.750 | € 0.748 | 0.03% | -2.85% | ||||||||
| U.S. $ in yen | 83.26 | 82.88 | 2.33% | 7.99% | ||||||||
| U.S. $ in Chinese | 6.33 | 6.31 | 0.15% | 0.04% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.000 | $0.991 | -100.00% | -100.00% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $0.995 | $0.991 | 0.62% | -2.48% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,684.90 | $1,685.60 | -1.54% | 7.54% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.880 | $3.888 | 0.01% | 12.92% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $32.6160 | $32.7500 | -5.85% | 16.84% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.3975 | $6.5950 | -4.23% | -1.99% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $6.3075 | $6.378 | -4.14% | -2.44% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.9301 | 0.9103 | 2.84% | 1.45% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.8985 | 1.814 | -6.59% | -17.33% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $107.33 | $107.03 | 0.24% | 8.60% | ||||||||
| (per barrel) | ||||||||||||
Gasoline in Oklahoma...
$3.89 for Regular
$3.99 for Premium
This is B.S. we the U.S.A. produces the most Oil and sell our crude over Seas and buy their cheap
SH!T and OUR Government rips our A$$ over it...
We need to get them out of office and put in working class Americans and not some millionaire that wants perks for themselves and their friends in the BIG BUCK CLUB....
LET'S TAKE AMERICA BACK AND GIVE IT TO THE WORKING CLASS PEOPLE!
MAKE THE RICH PAY THEIR FAIR SHARE LIKE EVERYBODY ELSE.
IHS Global Insights stated in the same paragraph that more Americans expect to by a home, new car or new appliance within 6 months. Thats a rather open statement; how many more Americans compared to what, last year, two years ago? Are these the Wall Street and Bank upper crust that afford to buy a new vehicle or new home? Has the economy magically turned around from the 220,000 minum wage jobs created and unemployment / under employment still above 16% (U-6)? Have all those uncounted unemployed who have exhausted their benefits suddenly found work and revived the economy?
Right now the majority of middle class workers are bleeding to death financially from increased gasoline, food and rising utility costs so the 1% that the media keeps trying to tax is going to buy the economy. The other 51% that pay taxes can't and the 48% that don't pay taxes won't be the ones buying, un less Obama is planning to give away Chevy Volts, give the Banks another $25 Billion in bribe money or run a cash for appliance clunkers program.
Higher gasoline prices weigh on consumer confidence.
Man these people are getting smarter. No s*** sherlock! What do you think it's going to do when you get paid, go get gas and groceries and go home and look at the walls because they don't have any more money to do anything else with. We are paying $3.85 here in our little city, it's killing us. I hope and pray for the day that the big oil companies have to suffer and struggle like we do now to make a living. That will never happen though, they will make enough this year to last them a lifetime while we work unti the day we die. I just wish that someone could give us an HONEST reason that gas is so high right now because all of the excuses they use to use don't fit right now. The sad part is other companies are following suit now, they are doing the same thing to us. It's got to stop somewhere!This is what this "Bull" Market is made of, not an improving economy but an artificial inflation of stocks (good if you own stocks, bad if you have to buy gas or food) through all of the shannanigans our goverment is doing to make it appear there is a recovery. When this house of cards falls, it will make 2008 look like a freakin picnic!
Also tried to put a link in but it wouldn't let me post.
Today, Federal Reserve President of New York, William Dudley told a subcommittee of the US House of Representatives’ Financial Services Committee what we have suspected all along. The Fed has been buying European Sovereign Bond debt.
It is amazing how this works.
Let’s see if I have this right we are borrowing from the Chinese to fund our soaring deficits while the Fed prints money to buy European Sovereign Bonds who in turn are buying Greek bonds and as we do this causes the US dollar to weaken and crude oil/gasoline and food prices to soar, which causes the need to borrow even more as we watch the Chinese and European economies plunge but our economy improves, even as we consider to reelect President Obama who was just heard making promises to Russia to be more flexible in missile defense talks after his reelection.
Do I have this right? . . . and because of this we have a bull market? I guess so!
Am I the only one that is getting sick of hearing about Apple? The world economy does not revolve around this company. Personally, I would like to see a tablet maker come out with a windows based operating system, lightweight, reliable and cost less than $200 and be easy to use. Then let's see how Apple reacts.
Mr. Borgman; Thanks for your critique... I'm glad that you liked my analysis... Apparently some others did not and so it disappeared... That's why I'm putting it back in again... Of course we need mining! Who says we don't?
My own model for the economy and, of course, the stock market is that of an aircraft in flight... We must use fuel at a certain rate simply in order to remain in flight. If we do that, however, there is sometimes the risk of running out of fuel... But we have no choice. If we run out of fuel we will crash but we will also crash if we cut back on its rate of use.. What we need is a refueling aircraft to come up and keep our tanks full.
The 'fuel' is, of course, 'currency,' and the refueling aircraft is our banking system -- including the Federal Reserve -- and our investment sector whose 'fuel' [currency] is characterized by the amount of energy which it contains -- its 'energy density,' or 'buying power' so to speak. A fuel rich in energy can keep us flying for a long time while a poor fuel may not do the job. What is it that determines the 'energy density' of our fuel? More than anything else, it is the health and productivity of our manufacturing sector. If our manufacturing sector is healthy -- busily producing products -- there will be a free flow of currency throughout the land; There will be goods, there will be salaries, there will be a respectable balance of trade --- here and overseas, and there will be a healthy amount of energy left over for reinvestment and in order to supply the needs of our government.
But what about the aircraft? How does this relate? Simple, if the Federal Reserve and the rest of the banking system can supply fuel of high energy density then our economy will remain in the air, otherwise there's going to be a problem. Well, there IS already a problem... We are trying to remain airborne while using fuel whose energy density is steadily decreasing --- because our manufacturing sector is steadily decreasing in size. Some will tell us that we must 'cut back' on fuel "consumption," while others will insist that we must continue to use the poor -- and growing poorer -- fuel; only MORE of it. If we think about it we can see that NEITHER of these two 'solutions' are going to work for very long. In either case our aircraft will soon crash. What we need is a GOOD supply of GOOD fuel... What we need is a healthy manufacturing sector as we once had.
So what has happened to our manufacturing sector? Where is it now? Well, it sure isn't here anymore and our aircraft is flying pretty darned low.. For those of us who seek our own personal 'parachutes' inside the stock market; GOOD LUCK! If you've made a few dollars, have you looked at the energy density -- the buying power -- of those dollars compared to the worth of your original investment? You should do that... You may discover that you are running on very 'poor fuel.' WE NEED OUR MANUFACTURING SECTOR BACK!!!
CLASSIC LADY .. the EMF disruption to our electrical distribution system from confrontation .. isn't near the potential of disruption of our electrical power grid, as over-load and system failure from lack of up grade by the utilities. America is in need of major retrofit of our electrical, roads, bridges, railroads, ports and manufacturing sectors. And what have we got .. bankers setting on stock piles of cash, corporate executives interested in bonuses and politicians preaching from a soap box to keep their jobs, while the rest of this Great Nation flounders in recession. Now that is the three stooges I want to get out the big stick and spank.
hjahahahahahahha .... hhooooooohaaaaaaaa ... you kill me sometimes charley!!!!!Oil/ Gasoline need their own classification. For years now they are not a commodity. How can a commodity dictate the world economy? People in power WAKE UP!!! There currently is no viable alternative to GASOLINE for the masses. The people in power across the world have created an environment where the world infrastructure depends on Oil/Gas almost as much as they do water. Now this is time for a change.
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