Dow off 61; stocks fall for 4th straight day

Despite Steve Jobs' appearance, Apple falls 1.6%. Banks slide after analyst Dick Bove downgrades Wells Fargo. Harley Davidson gets an upgrade. Crude oil slips; gold and silver rise. Temple-Inland shares soar on International Paper's $3.4 billion bid.

By Charley Blaine Jun 6, 2011 12:57PM
Charley BlaineUpdated: 8:44 p.m. ET

Stocks fell for the fourth straight day as worries about the economy, banks and even technology combined to drive the market lower.

The declines were a disappointment because the market had opened badly, then recovered nearly all of its early declines. Then, the market faded again. The Standard & Poor's 500 Index ($INX) closed under 1,300 for the first time since March 23.

Apple (AAPL) was initially higher in anticipation of Steve Jobs' speech at the company's Worldwide Developers Conference. But the shares started to fall back once Jobs, who has been on medical leave, finished. The day introduced Apple's iCloud service and new operating systems for the iPhone and Macintosh computer lines but failed to generate huge amounts of investor excitement. The shares ended down 1.6% at $338.04.

Harley Davidson (HOG) was up 2.8% to $36.86 on an upgrade from UBS amid expectations that the motorcycle maker will see a double-digit increase in June sales.

The Dow Jones industrials ($INDU) closed down 61 points to 12,090. The S&P 500 was off 14 points to 1,286, and the Nasdaq Composite Index ($COMPX) was down 30 points to 2,703. The Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks, was off 18 points to 2,274.

Article continues below.
After the close, shares of Temple-Inland (TIN) jumped a whopping 42% after International Paper (IP) bid $30.60 a share, or $3.38 billion, for the company and vowed to take the offer directly to shareholders.

Temple-Inland, which makes corrugated packaging and building products, said the bid undervalued the company. The offer was a 46% premium to Temple-Inland's close of $21.01 today. The deal reflects the willingess of companies to expand by buying new manufacturing facilities on the floor of the New York Stock Exchange.

International Paper was up 4.1% to $30.85 after hours. It had closed off 0.8% to $29.65 in regular trading.

Despite the prospect of a good takeover fight, stocks are likely to open flat on Tuesday. Earnings are due from Booz Allen Hamilton Holding (BAH), home builder Hovnanian (HOV), LDK Solar (LDK), a manufacturer of solar energy equipment, and women's apparel retailer Talbot's (TLB).

Market's off roughly 4% in four sessions
The four straight losses for the major averages have trimmed the Dow by 3.8%, with the S&P 500 down 4.4% and the Nasdaq down 4.7%. Since peaking on April 29, the major averages are off a touch less than 6% each.

Financial stocks, the weak link for the market this year, were hit again today when Rochdale Securities analyst Dick Bove downgraded Wells Fargo (WFC) to "sell." Wells Fargo shares fell as much as 2.9%, then rebounded modestly before closing down 2.2% to $26.26.

Regions Financial (RF) was off 4.9% to $6.05. Citigroup (C) fell 4.5% to $38.07.

The Philadelphia Banking Index ($BKX) was off 2% to 46.72; it's down 10.5% for the year, while the Dow and S&P 500 are up 4.4% and 2.3%, respectively. There are worse performers: Goldman Sachs (GS) is off about 20.4%, with Morgan Stanley (MS) off 17.2%.

Energy shares were down in response to lower oil prices. Exxon Mobil (XOM) and Chevron (CVX) were off about 1.1% to $80.29 and 1.3% to $99.68, respectively.

Crude oil (-CL) settled down $1.21 to $99.01 a barrel in New York and was continuing to move lower after hours. Brent crude was off $1.31 to $114.53 a barrel in London. Many traders are awaiting the outcome of Wednesday's meeting of the Organization of Petroleum Exporting Countries.

Gold (-GC) was up $11.80 to $1,554.20 an ounce. Silver (-SI) added 6.4 cents to $37.095 an ounce. Copper (-HG) was up slightly to $4.1385 a pound.

Metals shares initially moved higher after an upgrade of Freeport McMoRan Copper & Gold (FCX) from Goldman Sachs, but the rally stalled. Freeport closed off 0.3% to $49.79.

The dollar was slightly higher as interest rates moved up. The 10-year Treasury yield was at 3.002%, up from Friday's 2.997%.

Energy prices -- New York close
 
 Mon.  Fri.  Month chg.  YTD chg.
Crude oil (-CL)

$99.01  $100.22  -3.59%  8.35%
(per barrel)

 

 

 

 
Heating oil (-HO)

$3.0174  $3.0567  -1.17%  18.62%
(per gallon)

 

 

 

 
Natural gas (-NG)

$4.8270  $4.7070  3.45%  9.58%
(per mil. BTU)

 

 

 

 
Unleaded gasoline (-RB)

$2.9499

$2.9931

-6.36%

20.25%
(per gallon)

 

 

 

 
Brent crude 

$114.19  $115.84  -2.18%  20.52%
(per barrel)











Retail gasoline

$3.7710

$3.7750

-0.24%

22.75%
(per gallon; AAA)












The problems that had traders worried last week were still in play. Greece was still grappling with its debt problems. There was lots of posturing but no real progress over raising the United States' debt limit.

And, of course, Friday's disappointing jobs report cast a pall over the markets because it confirmed other reports suggesting the economy is slowing down.

European officials are considering a plan that would require Greece's creditors from the private sector to accept a debt exchange that would result in delayed payments -- a move that would likely be viewed as a default by Standard & Poor's standards, according to The Wall Street Journal.

 

Portugal ousted the Socialist government on Sunday in favor of the center-right party, paving the way for strict austerity measures.


Meanwhile, Goldman Sachs tossed out a bullish outlook it had adopted in December. Blowing up the bullish view of the economy: the March Japanese earthquake and tsunami, which caused surprisingly wide disruptions in supply chains for a variety of industries; higher oil prices and the probability of little or no help from Washington.

Only nine of the 30 Dow stocks were higher, led by United Technologies (UTX), up 0.6% to $83.71, and Microsoft (MSFT), up 0.4% to $24.01. (Microsoft is the publisher of MSN Money.)

Microsoft unveiled a new Xbox dashboard at the E3 video-game conference today. The dashboard will feature YouTube and Bing voice search. Microsoft also said it will release "Halo: Combat Evolved, Anniversary" on Nov. 15 to mark the 10th anniversary of the game's launch, with "Halo 4" pegged for a holiday 2012 launch.

The Dow laggards were Bank of America (BAC), down 4% to $10.83; JPMorgan Chase (JPM), off 2.5% to $40.53; and Alcoa (AA) and General Electric (GE), down 2% to $15.61 and 1.9% to $18.46, respectively.

At the same time, only 16 Nasdaq-100 shares were higher, led by Dell (DELL) , up 2% to $15.91, and Starbucks (SBUX), up 1.7% to $35.74. Starbucks was upgraded by BMO Securities. Ctrip.com International (CTRP) and Baidu.com (BIDU) were the laggards.

Harley-Davidson was the top performer among S&P 500 stocks, followed by packaging manufacturer Sealed Air (SEE), up 2.7% to $22.48. The laggards were Lorillard (LO) and Regions Financial (RF).

Southern Copper (SCCO) was off 11.4% to $30.78. Peru’s biggest producer of the metal declined after Ollanta Humala claimed victory in the country’s presidential runoff as voters rallied behind his pledges to stamp out corruption and extend a mining boom to the nation’s poor.

Short hits from the markets -- New York close
 
 Mon.  Fri.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.030%

0.030%

-40.00%

-75.00%
5-year Treasury note 

1.598%

1.608%

-5.33%

-20.73%
10-year Treasury note

3.002%

2.997%

-1.57%

-9.17%
30-year Treasury bond

4.262%

4.231%

1.09%

-2.29%
Currencies











U.S. Dollar Index

73.999

73.807

-0.93%

-6.67%
British pound

$1.6383

$1.6431

-0.52%

4.98%
(in U.S. $)











U.S. $ in pounds

£0.610

£0.609

0.53%

-4.74%
Euro in dollars

$1.460

$1.463

1.18%

9.16%
(in U.S. $)











U.S. $ in euros

€ 0.685

€ 0.683

-1.17%

-8.39%
U.S. $ in yen 

80.321

80.220

-1.61%

-1.29%
U.S. $ in Chinese

6.502

6.477

0.00%

-1.72%
yuan











Canada dollar

$1.022

$1.023

-1.20%

1.83%
(in U.S. $)











U.S. dollar 

$0.979

$0.977

1.20%

-1.79%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,547.20

$1,542.40

0.68%

8.85%
(per troy ounce)

 

 





Copper (-HG)

$4.142

$4.135

-0.85%

-6.86%
(per pound)











Silver (-SI)

$36.782

$36.191

-3.98%

18.89%
(per troy ounce)











Wheat (-ZW)

$7.440

$7.7375

-4.89%

-6.33%
(per bushel)











Corn (-ZC)

$7.320

$7.5400

-2.07%

17.59%
(per bushel)











Cotton 

$1.5563  $1.6163  -1.92%  7.47%
(per pound)











Coffee 

$2.605  $2.71  -1.55%  8.32%
(per pound)











Crude oil (-CL)

$99.01

$99.01

-3.59%

8.35%
(per barrel)












66Comments
Jun 6, 2011 2:18PM
avatar
Story of my life.
I never pull out in time...

... and now I have four kids!!!


avatar
Get ready everyone the Wall Street bankers are about ready to steal the money you have put in your 401k pension plan since 2007 once again. Look for the DOW around 6,000 by end of year and Nasdaq about 2,000 and S&P 500 about 500 this time around.

Yes we are on the roller coaster ride of the ponzi scheme stock market. Place your bets folks.

I am betting that with 10,000,000 newbie retired people a year for the next ten years with only 38,000 new hires a month for the next ten years in the private sector at minimum wage that there will be no one pumping money into the stock market as the baby boomers take it out to live on.

MAY DAY MAY DAY the stock market ponzi scheme is going to go bankrupt even before medicare.
Jun 6, 2011 6:55PM
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not only the market down, but jobs are down and the government is a couple of trillion dollars farther in debt.  now tell me the economy is recovering
Jun 6, 2011 1:40PM
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Good to see Wells fargo take its lumps. It is well deserved. They are the worst bank I have ever dealt with. Make sure you take the time to read every word of the fine print when dealing with WF.
Jun 6, 2011 2:41PM
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All this good news (sic) and the market only drops 30 or so.  Hold onto your hats its going to be fun.
Jun 6, 2011 2:27PM
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I am dumping my 401k today!! I dont trust Wall Street manipulation.I was going to wait till 12000 but good solid companies with good quarter results are tanking and that usally means manipulation is happenning in Wall Street. When they go down for no reason the mice are at work!!
Jun 6, 2011 7:51PM
avatar
I am reminded of the day of truth when a hooker realizes her choices in life have ravaged her looks, that her habits have critically damaged her health, and her choice of making money has left her no respect except to keep her pimp in the high life...no one will want her when she can not earn and no one will want because she is just plain used up by evil, selfish men....I truly hate to say that is where I find the country I love and unlike most of the pontificators that post here I do not have a clue on how to make it right. I used to suggest a national strike and trot out the declaration of independence in the hope that I would inspire some sort of coordinated effort to show the present group of thieves and all the ones future that they had better beware, but we are not those people any more and the only sand we have comes from the beach....I'm just gonna hunker down and hope like heck me and mine survive whatever is next
Jun 6, 2011 7:18PM
avatar

Cash is still king!  There is no way to keep up with an inflation rate listed in this article.  Year to date for Retail Gas up 23%, Corn up 18%, Cotton up 7 %, Wheat is down 4%,  These are just some of the basic's for living, Gas, Food, & Clothing up by 11%. since last year at this time.  What investment is giving a 11% return?  Add in the fact the dollar has lost 7% of it's value.

The best idea today is take out all your cash and make sure your home is paid off and to sell anything with a loan to get rid of payments, 18%+ interest payment are killing you.  So the best return on investment is to retire debt and interest over 8%, the YTD increase for gold.

 

Job growth has not matched the needed 300,000 per month break even #.  The government wants to claim 1 million new jobs since the 1st for the year.  The only problem is 6 * 300,000 = 1.8 million just to account for population.  Recovery starts with 1.5 million new jobs per month to get the 25 million unemployed working.  U6 unemployment at 16%

 

8 million families have lost homes and another 4 million in the wings.  Government wants to cancel it's debt to SSI.  500+ banks have failed.  Now government wants to increase it debt.

 

I'm not waiting for the system to fail, it has!  The only ones saying it's not broken beyond repair are those who still profit and want more time to get more money out of the treasury.

Jun 6, 2011 5:21PM
avatar
Let it SINK!!! Who cares? Like the stock market being back to 12,000 plus has really had any impact on the pathetic situation for Main Street America? The joblessness, inflation, and the highest decrease in home values since the Great Depression. That's the REALITY of what is REALLY going on in America today! Any recovery on Wall Street has merely been profit taking by rich high level investors. Its in no way any indication of the true econnomic climate nor is it sustainable either.
Jun 6, 2011 1:27PM
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Great, makes all of us Wachovia people feel great..merging with Wells Fargo. Ugh!!!
Jun 6, 2011 3:24PM
avatar

Looks like the traders using super computers need to do a software upgrade. The market has dropped like 570 points or more since 5 days ago?  10k by next week? We are one the road to a long, deep and painful depression.

Jun 6, 2011 6:37PM
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The Federal Reserve holding's of U.S Treasury Notes is  $ 1.532 Trillion that's with a (T) That is a new record for the FED ?= DISASTER
Jun 6, 2011 4:29PM
avatar
Unbelievable. Nothing can stop this economic slide. Nothing. And those idiots on the floor actually clap and smile as the bell closes. I wonder if they'll be smiling when the market loses another 1000 or 2000 points in another few weeks... probably. Are they dumb or just numb? This country is in so much economic trouble. These are terriying times for the American people. Don't believe any of those "experts". They just tow the party line. Inflation, unemployment, a huge national debt and sinking currency... all the ingredients for a perfect economic storm! And they told us that we would never experience anything like the Great Depression and stock market crash of 1929. Who will be standing when the final bell tolls? God help us.
Jun 6, 2011 2:59PM
avatar
At 1445 hrs they called for another wave of selling, manipulators in complete control....Nothing to do with fundamentals, we hear they will try triple digits again today...We call it as we see it people, nothing is made up....Will be a tough last hour apparently. Nobody is going to give up but its better to just stay on the sidelines and wait. When these scumbags manipulate the market down there is nothing anyone can do. Sad.
Jun 6, 2011 5:52PM
avatar
Well it's time for the Grand Wizard Helicopter Ben and his Federal Reserve to appear with a magic act  Quantative Easing III. Printing more digital money not worth the paper it's printed on to bail out the stock market and the banking cartels. OFF THE CLIFF WE GO !!!!!! Great for Wall Street and a slow death for Main Street !!!!!!!!!!!!!!!! God Bless America !!!!!!!!!!!!!!!!!!!!!!!!
Jun 6, 2011 3:26PM
avatar
better get the rest of my 401k money,before they steal the rest.lost over 30% already,wonder where that money goes?
Jun 6, 2011 7:14PM
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When a company like General Electric who has a strong balance sheet gets taken down 20% in a few week there is no hope foe the markets. Today 12,000 and looking at 9000 or below in a month.  As far as a true correction we have not even had a gain in stocks since 2008. Back then it was about 12,000 and today it is going under 12,000. Correct what?/?
Jun 6, 2011 5:18PM
avatar
This article is telling us the truth! But don't listen to the media when they say the economy is improving. Just a week ago there was an article saying that the Dow stock market will reach 20,000, but now it is a different story. The truth is the economy is not getting better, so is the job market and the housing market. Don't invest in anything to be on the safe side. Things will either stay the same or get worse.
Jun 6, 2011 2:35PM
avatar

You ain't seen anything yet.

How can anyone expect tis guys economic policies to work.

Don't you follow history and the soc/comm countries collapse.

avatar
It will be interesting to see if the "manipulators" will allow the market to drop below 12,000 tomorrow due to the negative psychological impact.  My guess...the market will go up around 70-80 points.
Hmmm as the "manipulators are the 10,000,000 babyboomers retired in the last year taking out their money in the stock market to live on I don't see the stock market going up for about another two decades. Of course Bernanke could break his agreement with China and pump more money into the stock market by printing it but if that happens the Chinese will trash the dollar and sell all their US T-bills.

China has passed the point where the nearly $1 trillion dollars in US T-bills is very meaningful to them. They are making more than that each year from the rest of the world. If they lose 50 percent of the value of the $1 trillion in US bills they can make it back in half a year. And the US economy would be worse off than during the crash as Bernanke would have to print $1 trillion over night. 

No I see no recovery for the US now. We blew the only chance we had by resupplying the Wall Street bankers with trillions of dollars which they turned around and invested in China and India and not the USA. 

The Fat Lady is singing and it will not end well for the USA.






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