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)










 

308Comments
Aug 13, 2012 1:33PM
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
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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
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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 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
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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 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
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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.

Aug 13, 2012 6:35PM
avatar

Healthcare Reform: No one wanted the Obama version. We wanted healthcare reform, but the current one is not the right answer.

The Stimulus: Had little affect on the economy. Very few jobs created. Most jobs created by the stimulus were lost after the funds were used up. Debt increased as a result of the stimulus. Unemployment increased.

Wall Street Reform: We can see daily what a joke that was.

Ended the war in Iraq: True there.

Began Drawdown from Afghanistan: No much of an accomplishment, only 10K troops come home, but yet more are going back out there.

Eliminated Osama bin Laden: True.

Turned around the US Auto Industry: True, but increased the debt as a result.

Recapitalized banks: Done as an attempt to increase spending and improve job outlook. Banks still do not lend much money to help build the private sector, even to those with perfect credit. Banks hold back most funds, so the economy does not grow as expected. Jobs created would not be considered a success story, ie McDonald's and Burger King. Government says unemployment still at 8.3%, but the number does not include the unemployed who no longer receive benefits.

Repealed 'Don't Ask, Don't Tell': True, just made it easier for gays and lesbians to serve in the military. They have been serving even before 'don't ask, don't tell', just now, they do not have to hide it.

Toppled Moammar Gaddafi: We spend too much time being the world police. It is not the job of the president to bring down the leader of another country. Bush was wrong in going after Saddam.

Told Mubarak to Go: Who are we to tell a country's leader to quit? That is not the president's job.

 

Eleven accomplishments listed, but only two of them seem to be positive ones. Now, I do not believe the Romney is the right man for the job, given his choice of a running mate, but Obama is not the right man for the job either. Of the two evils, I would pick Romney.

Aug 13, 2012 5:52PM
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. 

Buying more votes with our money. 
Aug 13, 2012 2:27PM
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."

I agree. I think they spend most of the day surfing sites like this and freaking out over the Tsunami of negativity they've caused but won't acknowledge. As a suggestion to get this over with... all of us should finish every post with: Close the Banks, End the Fed, Get Rid of Wall Street and... Where Is Our Job Recovery? Just so it starts to sink in.
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