With traders on hold, stocks end flat

The Dow's 53-point gain slips away as traders hope for stimulus moves from the Federal Reserve and the European Central Bank. Apple surges on reports the new iPhone will debut in mid-September. Natural gas and corn prices jump.

By Charley Blaine Jul 30, 2012 1:07PM
Charley BlaineUpdated: 1 a.m. ET, Tuesday

The stock market saw a two-day winning streak stall today as global markets waited nervously to see what the European Central Bank and the Federal Reserve may do to prop up Europe and stimulate the U.S. economy.

The Dow Jones industrials ($INDU) ended lower for the ninth straight Monday, something that last occurred in 1973.

The hope is that the ECB will make good on the pledge by President Mario Draghi last week to do "whatever it takes" to ensure the euro currency survives. The ECB's governing board meets Thursday. The Fed, meanwhile, starts a two-day meeting on Tuesday, with concerns building that the softening domestic economy may need more support. The Labor Department reports July payrolls and unemployment on Friday.

The pullback also reflects an unease created by what have been disappointing earnings. Apple (AAPL) missed estimates, but shares moved higher today. Facebook's (FB) first quarterly report raised more questions than it answered. Shares fell 56 cents to $23.15.

The Dow closed down 3 points to 13,073 after rising as many as 53 points. The Standard & Poor's 500 Index ($INX) was off 1 point to 1,385, and the Nasdaq Composite Index ($COMPX) was off 12 points to 2,946. The Nasdaq-100 Index ($NDX) was off 5 points to 2,642.

Article continues below.
Tuesday brings the government's June report on personal income and spending. Also there are reports on consumer confidence for the month and the S&P/Case-Shiller home-price index and the Chicago Purchasing Managers Index.

Futures trading suggests a positive open as hopes build for more Fed easing.

A small gain for markets in July
With a day to go in July, the Dow is up 1.5% for the month, with the S&P 500 up 1.7% and the Nasdaq up 0.4%. The Dow has risen six out of seven months this year and is up about 7% for 2012. The S&P 500 and Nasdaq have risen five out of seven months, with the S&P 500 up 10.2% for the year and the Nasdaq up 13.1%.

Despite that cheery picture of the market to date, the anxiety is very large, especially after Draghi's big pledge to support the euro. If he can't do something for southern Europe -- and you will see it Thursday if there is only a modest change in rates and no program to buy or otherwise support Spanish and Italian bonds -- there could be a nasty sell-off for markets in Europe and elsewhere.

The problem for the ECB is that Germany has resisted aggressive moves by the ECB and may yet do so this week. But failure to protect Spain and Italy "would tip the entire global system into a downward spin, triggering the sort of feedback loop that caused such havoc in late 2008," Ambrose Evans-Pritchard wrote today in the Daily Telegraph newspaper in London.

Likewise, investors who follow the Fed are trying to divine if there's enough support among Fed governors and the six presidents of regional Federal Reserve banks to try a new round of economic stimulus.

To be fair, the Fed's ability to stimulate the economy is limited with short-term interest rates hovering barely above 0%.

To add to this week's stress are important reports on home prices, the health of the manufacturing and non-manufacturing sectors of the economy and, of course, Friday's jobs report, the most important economic report of the month.

The European crisis has had a number of perverse effects. It has set off a flight of investment capital into U.S. Treasury securities, pushing domestic interest rates lower. That flight has also pushed the dollar up enough that it is a big reason why the current earnings season has been frustrating.

Meanwhile, only 40% of companies have beaten revenue estimates this earnings season, Thomson Reuters says. The typical rate is 63%. If the trend continues, it will be only the fourth time in the past 10 years where fewer than half the companies reporting fail to beat estimates. A big reason is sales generated by companies outside the United States are worth less when translated into dollars.

An iPhone 5 announcement in September?
Apple was providing the Nasdaq-100 some strong support. The shares were up $9.87 to $595.03 on speculation the company will introduce its new iPhone 5 and possibly a smaller version of the iPad device next month.

The iMore blog said there would be a big media event to introduce the new iPhone and the mini-iPad on Sept. 12, with iPhone sales starting nine days later.

That announcement date is a little earlier than expected and may have been pushed up to help Apple's fiscal-fourth-quarter results.

There's a lot of Apple news: The company's patent infringement suit against Samsung started today. And The New York Times reported over the weekend that Apple was considering investing in Twitter.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$89.78

$90.13

5.67%

-9.16%
(per barrel)











Heating oil (-HO)

$2.8814

$2.8905

6.33%

-1.13%
(per gallon)











Natural gas (-NG)

$3.2140

$3.0150

13.81%

7.53%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8184

$2.7967

7.09%

6.06%
(per gallon)











Brent crude 

$106.20

$106.47

8.59%

-1.10%
(per barrel)











Retail gasoline

$3.4860

$3.4850

3.97%

6.41%
(per gallon; AAA)












Chicago Bridge to buy Shaw Group
There was a big deal in the energy world. Chicago Bridge & Iron (CBI) said it was buying the Shaw Group (SHAW) for about $3 billion. The result would be one of the biggest engineering and construction companies in the energy sector. Shaw was up $14.80 to $41.49. Chicago Bridge & Iron was off $5.76 to $34.94.

Shares of Peet's Coffee (PEET) were up 33 cents to $75.50 -- $2 above the $73.50 buyout price offered by Joh. A. Benckiser, a German holding company. Wall Street is betting on a better offer ahead. Speculation suggests Starbucks (SBUX) might come in with a bid of $80 a share. Starbucks was off 59 cents to $46.88.

Best Buy (BBY) added 30 cents to $18.06 after shooting up to as high as $18.80. Bloomberg News reported that founder Richard Schulze has been recruiting executives to help lead the retailer if his attempt to take the company private is successful.

JPMorgan Chase (JPM) fell 75 cents to $36.14 as Deutsche Bank analysts cut their recommendation on the stock to "hold" from "buy." Matt O'Conner and David Ho said in a note to clients that regulators may not let the company resume its stock-repurchase program this year after a trading loss of at least $5.8 billion.

General Motors
(GM) shares were off 31 cents to $19.36 in part because of the ouster of marketing chief Joel Ewanick on Sunday. Ewanick had been in charge of a $5.4 billion advertising budget. GM is expected to report second-quarter results on Thursday and has warned that its European operations are suffering major losses because of the contracting economy. GM shares are off 24.6% since the end of March and are down nearly 50% since going public in 2010.

Chrysler Group said today that second-quarter operating income more than doubled, aided by improving conditions in the U.S. auto industry and relatively little exposure in troubled Europe. The company earned $436 million, up from the $181 million reported last year before the automaker took a charge related to paying off its federal bailout loan. Because of that charge, the company reported a $370 million net loss.

Revenue jumped 23% to $16.8 billion. Cars and trucks sold worldwide rose 20% to 582,000. However, about 75% of its auto sales occur in the United States, making it by far the most U.S.-centric automaker. The company is majority-owned by Italian automaker Fiat (FIATY).

Natural gas jumps; corn hits a new high
Crude oil (-CL) finished down 35 cents to $89.78. Natural gas (-NG), up 19.9 cents, or 6.6%, to $3.192 per million British thermal units, was among the top-performing commodities today on expectations of continuing hot summer weather in much of the country boosting electricity demand to run air conditioners.

Gold (-GC) settled up $1.70 to $1,619.70 an ounce. Silver (-SI) was higher. Copper fell slightly to $3.416 a pound.

The spot price for corn (-ZC) hit a new high of $8.23 a bushel because of drought concerns before settling at $8.20. Corn for December delivery -- the contract with the greatest activity -- closed up 20.75 cents to $8.14 a bushel.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.100%

25.00%

900.00%
5-year Treasury note 

0.618%

0.661%

-15.23%

-25.54%
10-year Treasury note

1.504%

1.555%

-9.34%

-19.62%
30-year Treasury bond

2.579%

2.642%

-6.66%

-10.73%
Currencies











U.S. Dollar Index

82.868

82.765

1.36%

2.91%
British pound

1.5713

1.5743

0.06%

1.13%
(in U.S. $)

 








U.S. $ in pounds

£0.636

£0.635

-0.06%

-1.12%
Euro in dollars

$1.23

$1.23

-2.87%

-5.37%
(in U.S. $)

 








U.S. $ in euros

€ 0.816

€ 0.813

2.95%

5.68%
U.S. $ in yen 

78.31

78.49

-1.80%

1.57%
U.S. $ in Chinese

6.40

6.38

0.45%

1.19%
yuan











Canada dollar

$0.999

$0.996

1.66%

1.81%
(in U.S. $)

 








U.S. dollar 

$1.002

$1.004

-1.63%

-1.78%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,619.70

$1,618.00

0.97%

3.38%
(per troy ounce)

 








Copper (-HG)

$3.416

$3.426

-2.30%

-0.58%
(per pound)

 








Silver (-SI)

$28.0330

$27.4980

1.52%

0.42%
(per troy ounce)

 








Wheat (-ZW)

$9.1425

$8.9800

20.77%

40.16%
(per bushel)

 








Corn (-ZC)

$8.1400

$7.933

28.18%

25.84%
(per bushel)

 








Cotton 

$0.7113

0.7145

-0.28%

-22.41%
(per pound)

 








Coffee

$1.7835

1.737

4.48%

-22.34%
(per pound)

 








Crude oil (-CL)

$89.78

$90.13

5.67%

-9.16%
(per barrel)










 

152Comments
Jul 30, 2012 2:29PM
Jul 30, 2012 2:27PM
avatar

V_L: Duya was NOT a Conservative!

 

The vast majority against Obama are not for Bush!  Look how many voted for "change", and got Bush/Democratic policies on steroids!

 

Bailouts, wars, deficits, regulations, lobbyists!  All CONTINUED after 09' and have actually INCREASED!  When we heard "change" we wanted a REDUCTION, not an INCREASE!

Jul 30, 2012 1:48PM
avatar
Conservatives did not want QE 1 or QE 2 and we certainly do not want QE 3... 
Jul 30, 2012 3:13PM
avatar
QE3 will cause high inflation and a weak dollar. They will then have to raise interest rates in order for China and others to buy the debt. It's a bad move. The market is in a global slowdown. Let it correct itself. The problem is the government is creating a uncertain direction. People are holding back on buying  and compainies are holding back hiring because of this.
Jul 30, 2012 1:36PM
avatar
Looks like the parasites have temporarily run out of feed and are waiting for the central banks to chum the waters again so the septic bottom scum can resurface once again to feed off the little people. The time for talk is over - time for the eradication of the wall street plague is now....
Jul 30, 2012 3:27PM
avatar
I thought Obama was all about transparency? If so, the Audit the Fed bill should qualify for another Executive Order if Reid won't let it go to vote.  


Jul 30, 2012 2:56PM
avatar
When are we going to make the FED accountable to someone other than themselves?
Jul 30, 2012 1:31PM
avatar
Lets talk about this false economy Charley and the next big Crash, the dow should be around 8000 points, the reason Ben Bernanke is waiting to do QE3 Bernanke knows the DOW will spike in the short term then drop like a lead ballon, when this next QE3 comes poeple/traders will run for the door.
Jul 30, 2012 3:47PM
avatar
Wall Street, GM and others got their bailouts on the taxpayer's dime. Now it's time for them to return the favor. Otherwise, the economy wil remain stagnant.
Jul 30, 2012 2:00PM
avatar
What a great day in the market! I am going to buy 5K of bumps in the road, 10K of financial land mines, and 20K of booby traps today!
Jul 30, 2012 3:40PM
avatar

Waiting on stimulus packages from both Europe and the U.S.A.

 

and KOOLADE available at your local broker.......

Jul 30, 2012 3:53PM
avatar

Romney and Obama are playing poker, neither one of them has any face cards. I think Joe the plummer has the Royal Flush.  I'll fold.

 

Jul 30, 2012 1:52PM
avatar

It is interesting to see the WS weekday news cycles manufactured to move stocks higher or lower depending of who is getting fleeced that day while they wait for the next heroin drip from Uncle Ben and the President's market pumping cabal. Up 200 down 200 yada yada, euro saved/doomed - Jobs reports BS - earnings (the only thing that should really count for much on WS) etc,etc while the system does rinse and repeat cycles on small investors. No wonder they have left the market in droves. Now the big shots get to play with each other and laugh at the SEC. What a world.

Jul 30, 2012 3:58PM
avatar

Obama or Romney decisions decisions who to vote for, in fours years we will still be asking the same question: Who voted for that idiot?

To wrongs still don't make a right, do the math!

Jul 30, 2012 8:55PM
avatar

IF THERE IS A STIMULUS BY THE FED LET IT BE FREE MONEY FOR THE PEOPLE TO SPEND BECAUSE THE LAST STIMULUS WENT TO THE BANKS AND BIG CORPS WHO HAVE MADE RECORD PROFITS OFF THOSE WHO RECEIVED NO STIMULUS, AND WHAT THEY DID RECEIVE WAS KEPT IN THEIR COFFERS AND/OR GIVEN FREELY TO THEIR EXECS AND CEOS

 

IF THERE IS NO IMMEDIATE TRICKLE DOWN OF THE STIMULUS FUNDS FROM THE TOP, THEN LET THE NEW STIMULUS FUNDS TRICKLE UP FROM THE BOTTOM

Jul 30, 2012 9:16PM
avatar
Yes Borgman, it is considered OK for 46 percent to not participate in paying for their share of the American Dream. Not only do they consume as much of the infrastructure as the tax payers, they freely (literally) abuse the social programs. Who do they think they are to point at us and call us evil and mean spirited.

Disclaimer: The above statements were not directed towards the old, chronically ill or disabled. Just the population that has failed to be self sufficient.
avatar

Gee guys what do you want the Federal Reserve to keep pumping trillions of dollars into the hands of the Wall Street bankers so they can put a couple of thousand dollars into stocks??

 

Listen if the stock market can only rally when there is talk the Federal Reserve will dump trillions into the stock market shouldn't that tell you that the market is over priced by a factor of like 100.

Jul 30, 2012 3:08PM
avatar

Here we are.  Waiting on stimulus packages from both Europe and the U.S.A.

I have heard nothing but complaints from so many about how the government should never have

bailed and stimulated(one in the same in my book) and yet here we are praying that the

Fed and the European Central Bank will do just that so the market can go up.

 

Such hypocrisy. 

 

I was for stimulus, not bailouts, until they started giving the money to the banks and the

state and local governemnts along with some large businesses.  Those were bailouts,

not stimulus.

 

The only stimulus that went where it should have gone, directly into the hands of the American

people so they could decide who was to big to fail,  was from Bush.  He got that one right.    Well only half right because he started the trap project also. 

 

The government has gone trillions MORE in debt and accomplished little.  They stopped the slide

and created some jobs, but not the kind that will sustain growth, balance the budget, and

reduce the debt.

 

The sad part is, where would be without it?

 

 

Jul 30, 2012 7:24PM
avatar

When will these governments learn to stop trying to prop things up and get their spending in order. Printing presses and borrowing are NOT the solution!!

Jul 30, 2012 6:30PM
avatar

Let's see, the market is right back where it was.  Why do we need any more stimulus? Clearly there is enough cheap capital floating around to prop this market up without introducing any more. 

 

The solution should be in government action, not in monetary policy.  Our government is arguing over the color of the curtains while the house is on fire.  Fiscal cliff approaching! 

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[BRIEFING.COM] The S&P 500 trades flat with one hour remaining in the session. It has been a busy day on the economic front with the release of the GDP report for the second quarter and the latest policy statement from the Fed.

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