Stocks slip on global growth worries

The S&P 500 sees a 6-day winning streak end, and the Dow falls 39 points after Japan says growth is fading. Groupon shares slump on revenue miss. Sears will spin off several businesses. Google will cut about 4,000 jobs from Motorola Mobility.

By Charley Blaine Aug 13, 2012 12:44PM
Charley BlaineUpdated at 9 p.m. ET

Stocks opened badly today as worries grew about slowing growth in Asia. The major averages rebounded off their lows, but the Dow Jones Industrials ($INDU) and the Standard & Poor's 500 Index ($INX) ended down slightly.

The S&P 500 suffered its first loss -- an admittedly small decline -- after six straight gains. Gains in Apple (AAPL) and Google (GOOG) led technology shares higher.

The selling pushed gold (-GC) and crude oil (-CL) in New York lower, but Brent crude, the benchmark North Sea oil, was higher because of annual maintenance shutdowns and some speculation that Israel might soon attack Iran's nuclear facilities.

Groupon (GRPN) shares were down sharply after hours, hitting $6.35, down $1.20 from a regular close of $7.55. The company's revenue of $568 million missed Street estimates of $573.1 million. Earnings were 8 cents a share; the Street had expected 3 cents. If the after-hours price holds on Tuesday, it will represent a 79% decline since Groupon's $31.14 high on its first day of trading.

The Dow closed down 39 points to 13,169. The blue chips had been down as many as 95 points. The S&P 500 fell 2 points to 1,404 after dropping as many as 9 points after the open. The Nasdaq Composite Index ($COMPX) was up 2 points to 3,023.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 6 points to 2,729, though only 28 stocks in the index finished with gains.

Apple, the biggest influence on the index, was up $8.30 to $630 and is now just $14 beneath its all-time intraday high of $644, set on April 10.

Technology was the S&P 500's strongest sector, followed by financial and consumer discretionary stocks. Materials and energy were the weakest sectors.

The market dropped at today's open after as Japan reported lower-than-expected second-quarter growth.

Coming up Tuesday are earnings from Home Depot (HD), Saks (SKS), Estee Lauder (EL) and JDS Uniphase (JDSU). Government reports include retail sales and the Producer Price Index, both for July.

Why Groupon disappointed
Groupon sagged after hours because the earnings results suggest that online coupons have lost popularity.

The company makes money by selling discounts -- known as Groupons -- from businesses such as restaurants and nail salons. It then splits the revenue with the businesses.


Third-quarter revenue will be $580 million to $620 million, Groupon said in its earnings statement. The consensus estimate has been $607.4 million.


Also of concern, according to Bloomberg Businesseeek: The company plans to add hundreds of workers to its office in Palo Alto, Calif., where it’s building a suite of technology products for local merchants including Groupon Scheduler, an online appointment-booking system, and Groupon Rewards, a loyalty program.


Why Sears and Tesoro gained
Sears Holdings (SHLD) was up $2.94 to $54.36 on news that it plans to spin off its Sears Hometown and Outlet businesses and some hardware stores into a new company.

Independent refiner Tesoro (TSO) was up $3.37 to $38.87 after it said it would buy BP's (BP) refinery in Carson, Calif., for about $2.5 billion. BP shares in New York were off 31 cents to $42.09.

Is the market overbought?
The market has experienced a two-leg rally since June 4, when the Dow closed at 12,101. The first leg ended on July 3. The second may yet be ongoing.

With today's close, the Dow is up 8.8% since June 4, with the S&P 500 up 9.9% and the Nasdaq up 10%. Those are big gains in a short amount of time, and there are suggestions the market is getting toppy.

The biggest suggestion may well be the 14-day relative strength indexes for all three averages. An RSI measures the performance of a stock, commodity or index against past performance.

A reading above 70 suggests the market is overbought and ready for some sort of pullback. Dow's RSI closed at 76.45, with the S&P 500 closing in on 79.35 and the Nasdaq at 78.196. The bottom line may well be that the rally since June is ready for a pullback. How deep a pullback is not yet clear.
Energy prices -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$92.73

$92.87

5.30%

-6.17%
(per barrel)











Heating oil (-HO)

$3.0183

$3.0205

5.98%

3.57%
(per gallon)











Natural gas (-NG)

$2.7290

$2.7700

-14.96%

-8.70%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9907

$3.0039

7.80%

12.54%
(per gallon)











Brent crude 

$113.60

$112.95

8.27%

5.79%
(per barrel)











Retail gasoline

$3.6960

$3.6920

5.60%

12.82%
(per gallon; AAA)












Google rises on cuts at Motorola, Frommer's deal
Google shares rose $18.01 to $660.01, its third-best close of the year. Its intraday high of $660.15 was its highest since Jan. 6.

The company said it would cut 20% of the workforce -- about 4,000 jobs -- of Motorola Mobility, the money-losing cellphone maker it bought for $12.5 billion last year, and shut nearly a third of Motorola's offices worldwide.

Google is also buying the Frommer's travel brand from John Wiley & Sons (JWB) for an undisclosed price to bolster its offerings of local reviews around the world. In Frommer's, Google sees an opportunity to broaden its consumer offerings outside of restaurant reviews.

Because of the Frommer's announcement, Yelp (YELP) was off $1.98 to $23.87. Expedia (EXPE) was off 61 cents to $53.83. TripAdvisor (TRIP) dropped $1.58 to $33.52. Orbitz Worldwide (OWW) was down 12 cents to $3.22.

A disappointing report from Japan
Japan’s reconstruction-fueled rebound waned in the second quarter as consumer spending growth almost stalled and export gains diminished, increasing the chance for monetary and fiscal stimulus.

Gross domestic product advanced 0.3% from the first quarter. On an annualized basis, Bloomberg News said, the gain came to 1.4%, less than the median estimate of 2.3% in a Bloomberg survey of economists and down from 5.5% the previous quarter.

Facebook slips as lockups start to expire
Facebook (FB) shares were off 21 cents to $21.60 and were off an additional 24 cents to $21.36 after hours. Investors appeared to be bracing themselves for a big supply of new shares hitting the market after lockup provisions in the company's initial public offering expire.

Some 2 billion shares will be unlocked between now and May. The first set of shares can be sold starting Thursday.

As The Wall Street Journal noted today, lockups are a common practice as companies go public, especially firms with substantial private-equity or venture-capital backing. Underwriter of the deals typically require selling shareholders to hold on to a portion of their stakes to reassure investors that their interests will remain aligned and to help boost the stock through scarcity.

Market has risen for 5 straight weeks
Slowdown worries are hitting stocks of big companies most exposed to global economic forces. About a quarter of the Dow's loss today came from three stocks: DuPont (DD), Caterpillar (CAT) and United Technologies (UTX).

Today's pullback comes after the market has risen for five straight weeks of gains that saw the major averages rise nearly roughly 3.8%. The S&P 500 had climbed for six straight days and closed above 1,400 for four straight days.

Sears reports results Thursday. And in a big week for earnings, Home Depot (HD), Cisco Systems (CSCO), Deere (DE), Target (TGT), Ross Stores (ROST) and Wal-Mart (WMT) also report results.

Only five of the 30 Dow stocks were higher, led by American Express (AXP) and Walt Disney (DIS). Alcoa (AA) and Cisco were the percentage laggards.

Meanwhile, 162 S&P 500 stocks were higher, led by Tesoro and Sears. TripAdvisor and First Solar (FSLR) were the laggards.

Sears Holdings, eBay and Google were the best performers of the 28 Nasdaq-100 shares showing gains.

Research In Motion (RIMM) and Avago Technologies (AVGO) were the laggards.

Gold pulls back; oil drops
Gold settled at $1,612.60 an ounce in New York, down $10.20. Silver(-SI) was off 29.5 cents to $27.767 an ounce. Copper (-HG) fell to $3.3535 a pound.

Crude oil in New York settled down 14 cents to $92.73 a barrel, after falling to as low as $92.05.

Domestic retail gasoline prices were higher and have jumped more than 10% since bottoming on July 2, according to AAA's Daily Fuel Gauge Report.

The national average price of regular unleaded gasoline was $3.696, AAA said. That's up from $3.692 on Sunday and up 37 cents from a low of $3.326 on July 2. It's up 12.8% for the year.

Corn (-ZC) for December delivery fell 17 cents to $7.9225 a bushel. It's off 56.75 cents since peaking at $8.49 a bushel on Friday.

Wheat (-ZW) for September delivery fell 28.5 cents to $8.5675 a bushel. It is off 9.6% since peaking at $9.4725 on July 23.

Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.100%

-10.00%

800.00%
5-year Treasury note 

0.702%

0.696%

17.20%

-15.42%
10-year Treasury note

1.654%

1.649%

10.86%

-11.60%
30-year Treasury bond

2.739%

2.737%

6.29%

-5.19%
Currencies











U.S. Dollar Index

82.486

82.631

-0.27%

2.44%
British pound

1.5699

1.5681

0.11%

1.04%
(in U.S. $)

 








U.S. $ in pounds

£0.637

£0.638

-0.11%

-1.03%
Euro in dollars

$1.24

$1.23

0.41%

-4.68%
(in U.S. $)

 








U.S. $ in euros

€ 0.810

€ 0.814

-0.41%

4.91%
U.S. $ in yen 

78.43

78.29

0.40%

1.73%
U.S. $ in Chinese

6.39

6.36

0.43%

0.95%
yuan











Canada dollar

$1.007

$1.009

0.98%

2.63%
(in U.S. $)

 








U.S. dollar 

$0.994

$0.991

-0.90%

-2.56%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,612.60

$1,622.80

0.13%

2.92%
(per troy ounce)

 








Copper (-HG)

$3.354

$3.393

-1.87%

-2.40%
(per pound)

 








Silver (-SI)

$27.7670

$28.0620

-0.53%

-0.53%
(per troy ounce)

 








Wheat (-ZW)

$8.5675

$8.8525

-3.55%

31.25%
(per bushel)

 








Corn (-ZC)

$7.9225

$8.093

-1.61%

22.54%
(per bushel)

 








Cotton 

$0.7169

0.7302

0.49%

-21.80%
(per pound)

 








Coffee

$1.6705

1.6935

-4.21%

-27.26%
(per pound)

 








Crude oil (-CL)

$92.73

$92.87

5.30%

-6.17%
(per barrel)










 

350Comments
avatar
A female CNN journalist heard about a very old Jewish man who had been going to the Western Wall to pray, twice a day, every day, for a long, long time.

So she went to check it out. She went to the Western Wall and there he was, walking slowly up to the holy site.

She watched him pray and after about 45 minutes, when he turned to leave, using a cane and moving very slowly, she approached him for an interview.

"Pardon me, sir, I'm Rebecca Smith from CNN. What's your name?

"Morris Feinberg," he replied.

"Sir, how long have you been coming to the Western Wall and praying?"


"For about 60 years."

"60 years! That's amazing! What do you pray for?"

"I pray for peace between the Christians, Jews and the Muslims."

"I pray for all the wars and all the hatred to stop."

"I pray for all our children to grow up safely as responsible adults and to love their fellow man."

"I pray that politicians tell us the truth and put the interests of the people ahead of their own interests."

"How do you feel after doing this for 60 years?"

"Like I'm talking to a wall."
Aug 13, 2012 3:10PM
avatar
Is Obama ever going to tell us why we should re-elect him or is going to continue to talk about tax returns? 
Aug 13, 2012 3:15PM
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Who get to decide the dividing line between rich, middle class and poor? 

If you made $249,000 last year are you rich or middle class? If you made $39,500 are you poor or middle class? 

Which Washington douche bag gets to decide?
Aug 13, 2012 2:02PM
avatar

looks like the speculators are trying to make everything go up and the people are cutting back, so let the speculators drink the oil and eat the farmers rottening food.

The speculators are ruining the market and the country along with the thieving banks and crooked bankers.

Aug 13, 2012 2:03PM
avatar
One might ask, how is it the fed can constantly dilute the buying power (real value) of the dollar by excess money supply (debt) while keep it's stated value high?  Because it is worth what they say it is, at least on Wall Street, despite the real world experiences of the working class. Thus they must continue to try and hide the real rate of inflation, actual unemployment and ever diminishing buying power of the dollar by any means necessery.  Pay no attention to the man behind the curtain, Big Ben, bought and paid for with your money by banksters, mega-corporations and brokerage houses.  What a world, what a world.  The wicked witch of the north was right on. 
Aug 13, 2012 2:48PM
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What a mess...and corruption of power!!! Will Americans ever regain their lives!!
Aug 13, 2012 2:47PM
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If a Federal Judge orders Eric Holder to give up the documents, will he ignore that too? Or will King Obama step in and make new rules to suit his agenda?
Aug 13, 2012 3:05PM
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Stocks will sag until we vote Obama out. Plain and simple.
Aug 13, 2012 1:54PM
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1:50 EST. Look out! Here comes money from somewhere to stem the flow and erase the losses! If it's not you buyin' and it's not me buying then...who or what is buyin'? Computers? Black pools? Hmmmm???
Aug 13, 2012 4:03PM
avatar

THIS STORY HAS BEEN EDITED AND APPROVED BY THE ACLU/ ACORN FOR POLITICAL CORRECTNESS !

Barrack the RaCcoon
One day about a decade ago, while driving through Chicago, in my Mercedes S class Convertible, a RaCcoon suddenly jumped into the car.
I was very concerned about getting attacked ,  rabies, etc but the RaCcoon promptly  introduced himself as a Jr. Senator from Chicago. He explained that he had to jump out the window of Tony Rezko's house because the cops were coming to bust poor, old Tony,  for embezzlement !
Of Course Barrack the RaCcoon had nothing to do with it , he explained, he was just a guy from the neighborhood .I asked him why he just didn't jump into the beautiful , empty lot right next door to Rezko, instead of my car. He smiled and said don't worry about that , I got that covered!  Drive on.

 
Still in a daze, I asked this RaCcoon how did he ever learn our language ? Barrack the RaCcoon said he has a college degree with very, very high GPA. and he has a very high IQ, to boot ! I became skeptical and I asked him to prove this point , he became very feisty, said sorry,  his transcripts were sealed forever!  Just take his word for it, he's real smart.

I asked where we are going and he said to Bill Ayers birthday party out in another suburb about 1 hour away.

Silence reigned for a few moments , when Barrack the RaCcoon suddenly asked if I would like to hear his I have a Dream, vision. You means Dreams of Finding My Daddy, Barrack ?

 No, no - been there , done that. Didn't you read my book?

no, sorry, I never heard of you or your book until today, Mr RacCoon.

What then, Mr. RaCcoon?

Well, I have a dream  ----
Hope and Change would be someday coming to Amerika and a vision of a welfare utopia where no people of color or even white trailer trash, ever needed to work ! His dream of taking the non tax payers from 49% of the population to 70 % of the population !  Illegal's would be welcomed with a red carpet ! Free medical and they never , ever, need to pay a dime in taxes for their entire lifetime !  Not one dime and they don't even need to learn English !

(For the sake of "fairness", we must note Strawberries are only $3.00 a PINT !) Thank you , illegal's, thank you!

Aren't we LUCKY?

To continue on the, I Have a Dream moment, of Barrack the RaCcoon --

No person of color should EVER have to pay one single dollar of taxes !
Of food stamps and welfare increasing 45% under his regime.
Of creating a communists utopia of state run auto industry and health care !
Of racist black people controlling the government. Our attorney general being one of them.
Of lesbian, communist leaning , supreme justices.
He told me our real leader is George Soros, super commie.

When I asked , how in the world can the 30% who work pay for the upkeep of the 70% who do not, he simply smiled and said -- Think , Greece!

But yes, Barrack, Greece is going belly -up, isn't it ?

He smiled and replied, you learn fast, don't you !

We arrived at Bill Ayers house and the "Rev" Wrong came to the car, asked what Barrack was doing with a honky, looked at me and said G DAMM America !

I drove off, hoping to distance myself from Barrack the RaCcoon and his nasty friends.

He never even thanked me for the ride or gave me gas money. Said I made too much money now , anyway.


Yes, I learned many things from Barrack the RaCcoon that day , the best being not to trust him with your money.
After he got out , I noticed my wallet was missing and replaced with small "change"  and a little card that said "hope".


Oh,  that Barrack the RaCcoon,  I wonder where he ended up,  these days?

Aug 13, 2012 2:56PM
avatar

Manipulation Monday...btw, this stock market is not only propped up by Helicopter Ben and his minions but it is also the lowest volume trading in 60 years comparitively.

 

meaning, YES, it is a total joke!

Aug 13, 2012 2:45PM
avatar
The market is doomed......it is a certainty...the printing is the only thing keeping it a float....IT IS A WELL ORCHESTRATED ILLUSION" THEY ARE ALL CORRUPT AND BANKRUPT...!!!
Aug 13, 2012 1:34PM
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Note to the libtards - No one votes for the VP. Once the election is over, they disappear for months at a time. Their only function is to stand behind the Prez during speeches and smile. Then clap when prompted. 
Aug 13, 2012 1:21PM
avatar
"As long as we are selling for profit we are destroying for profit."

But but but but... if we can't conspire in corner office suites in ivory towers... what will we do?

Close the banks. End the Fed. Get rid of Wall Street. It's pretty easy to see that New World Order is attempting to homogenize the globe so it can be neatly controlled financially. Sorry, but I'll take Chaos over suppression forever.
Aug 13, 2012 6:40PM
avatar

Obama announced that the Department of Agriculture will buy up to $170 million of pork, lamb, beef, chicken and catfish to help support farmers suffering from the drought. 

 

Sounds like another price increase directly on the middle class.

Aug 13, 2012 4:03PM
avatar
Can't have a Parrot or a Mutt rant without a RacCOON story !


Aug 13, 2012 5:00PM
avatar
Yes,why don't we list Obuma;s greatest accomplishemwnts before and after his preseidency ~!

Before Dear emperor -
voted present over 100 times !
community organizer

As POTUSA
accomplishments ?
uhhh, ummm, ahhh
Tripled the deficit?
Least jobs gained by any president before him?

Aug 13, 2012 2:12PM
avatar

Just another typical example of how the market moves on the headline of the day and totally discounts every other headline that made it move previously.   Did that previous news change all of a sudden?  I don't think so, so it can only be that the previous news was really not that consequential to begin with.  The market spiked on a jobs report that was really not even mediocre, and the FED and ECB did nothing after giving off lots of signals to the contrary.  

 

And then the media pundits wonder why people like me are sitting on the sidelines for the most part.

Aug 13, 2012 2:29PM
avatar

Charley Blaine.........I wish I had a job that required so little accountability. 

Aug 13, 2012 7:09PM
avatar

Let's face it, Obama sucks as president and he is clueless about capitalism because his Marxist parents didn't know any better.

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