Stocks slide as weakness hits Apple and Amazon.com
The Dow falls 52 as some traders take profits ahead of decisions this week from Europe and the Fed. Intel's earnings warning last week weighs on chip stocks. AIG slips after the Treasury says it will cut its stake in half.
Updated: 6:40 p.m. ETStocks pulled back today -- with most of the selling coming in the last hour of trading -- as investors await key decisions later this week from the Federal Reserve and Germany's highest court.
The Fed meets Wednesday and Thursday to decide if it will engage in a new round of economic stimulus. Germany's Constitutional Court will rule Wednesday on whether it's legal for Germany to participate in the European Central Bank's bond-buying plans to lower interest costs for Italy, Spain and other countries.
At the same time, investors were concerned by a report over the weekend that China’s imports unexpectedly fell and industrial output rose the least in three years. The reports signaled more stimulus may be needed after the government last week said it approved subway and road projects across the nation.
Meanwhile, Intel (INTC), which cut its earnings forecast last week, was a big force in pulling semiconductor stocks lower. Apple (AAPL) and Amazon.com (AMZN) hit all-time intraday highs right after the open but promptly fell -- hard. Copper, steel and aluminum shares were higher on speculation that the Fed will approve a new stimulus plan.
The Dow Jones industrials ($INDU) closed down 52 points to 13,254. The Standard & Poor's 500 Index ($INX) was down 9 points to 1,429. The Nasdaq Composite Index ($COMPX) was off 32 points to 3,104. The Nasdaq-100 Index ($NDX) was down 37 points to 2,788.
Article continues below.Volume was light with 615 million shares changing hands on the floor of the New York Stock Exchange.
The Dow finished last week at its highest level since Dec. 28, 2008. The S&P 500's finish on Friday was its best since Jan. 3, 2008, and the Nasdaq's Friday close was its best since Nov. 15, 2000.
As the market was closing, the Federal Reserve reported that U.S. consumer credit outstanding fell in July for the first time in 11 months. Much of the decline was due to a 6.8% decline in credit-card debt. But the Fed revised substantially higher its estimate for credit growth in June.
Tuesday, the National Association of Independent Business will report on small-business confidence. Also due are weekly reports on retail sales and a government report on the trade deficit.
Facebook (FB) CEO Mark Zuckerberg will be interviewed at the TechCrunch blog's annual conference. The interview starts at 2 p.m. PT. Facebook shares fell 17 cents to $18.81 on Monday and are off 50.5% from the $38-a-share sale price in its intial public offering in May.
Futures trading suggests a flat open for stocks on Tuesday.
Apple and Amazon stumble; Intel hit by warning
Technology was the market's weakest sector.
Apple, the biggest influence on the Nasdaq-100 index, was off $17.70 to $662.74 after hitting a new high of $683.29. The company is expected to announce its iPhone 5 at a big media event on Wednesday. There's hope the company will also announce a new iPad, but that now appears to be unlikely.
Notwithstanding the share-price decline, the new iPhone is expected to generate lots of excitement and sales. So much so that the device's introduction could add up to 0.25% to 0.5% to U.S. economic growth in the fourth quarter, according to Michael Feroli, JPMorgan Chase's chief U.S. economist.
Amazon.com was off $2.05 to $257.09 after hitting a new high of $260. Last week, Amazon announced three new models of its Kindle Fire tablet and an upgrade to a fourth.
Intel was off 93 cents to $23.26. The stock is off 7.3% since closing at $25.10 on Thursday. It warned on Friday that third-quarter revenue would be about $1 billion less than expected, as demand for personal computers is weakening, even among corporate users.
"The breakdown in corporate demand is particularly disheartening; it had been a relative bulwark against persistently lousy consumer PC sales," Barron's noted over the weekend.
Intel is down 20.4% since peaking at $29.18 on May 2 and is off 4.3% for the year.
Google (GOOG) fell $5.38 to $700.77. Its close on Friday was a 52-week high.
| Energy prices -- New York close | ||||||||||||
| Mon. | Fri. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $96.54 | $96.42 | 0.07% | -2.32% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $3.1668 | $3.1489 | -0.42% | 8.67% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.8120 | $2.6820 | 0.46% | -5.92% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $3.0240 | $3.0196 | 1.72% | 13.80% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $114.81 | $114.25 | 0.21% | 6.92% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.8280 | $3.8250 | -0.03% | 16.85% | ||||||||
| (per gallon; AAA) | ||||||||||||
Shares of American International Group (AIG) were down 69 cents to $33.30 after the Treasury Department said over the weekend it will sell $18 billion of AIG stock in a public offering. The move will cut the Treasury's stake by half and make the government a minority shareholder in the insurance giant for the first time since September 2008. The stock had fallen to as low as $32.90 before buying began.
Oil giant BP's (BP) shares rose 11 cents to $42.04 in New York after the compoany agreed to sell its interests in a number of oil and gas fields in the U.S. Gulf of Mexico for $5.55 billion. The buyer is Plains Exploration (PXP), which fell $4.24 to $36.09 on the news.
BP is raising cash -- and lots of it -- to be able to pay off the government for the 2010 Gulf oil spill.
Copper rises on stimulus hopes
Copper (-HG) was a star commodity, rising 3.1 cents to $3.676 a pound on the expectation of stimulus coming from China and the Fed. Freeport-McMoRan Copper & Gold (FCX) was up 28 cents to $39.71. U.S. Steel (X) added 19 cents to $20.70.
Gold (-GC) and silver (-SI) settled down $8.70 to $1,731.80 an ounce and 5.7 cents to $33.63 an ounce, respectively. Both were trading lower afterward in electronic markets.
Crude oil (-CL) traded as low as $95.34 a barrel on the Chinese news. But it rebounded to finish up 12 cents to $96.54. Brent crude was up 42 cents to $114.67 a barrel.
The national average price of gasoline was $3.828 a gallon, up slightly from Friday, according to AAA's Daily Fuel Gauge Report.
The yield on the 10-year Treasury note rose to 1.683% from 1.661% on Friday.
Stocks wanted to move lower
Nineteen of the 30 Dow stocks were lower today. The leaders were Hewlett-Packard (HPQ) and Verizon Communications (VZ). The laggards were Intel and Bank of America (BAC).
Sealed Air (SEE) and printer R.R. Donnelly (RRD) were the S&P 500 leaders. For-profit education company Apollo Group (APOL) and Teradata (TDC) were the laggards. Only 144 stocks in the index were higher.
Only 18 Nasdaq-100 stocks were higher, led by Green Mountain Coffee Roasters (GMCR) and O'Reilly Automotive (ORLY).
Apollo Group and Intel were the laggards.
| Short hits from the markets -- New York close | ||||||||||||
| Mon. | Fri. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.1000% | 0.100% | 11.11% | 900.00% | ||||||||
| 5-year Treasury note | 0.657% | 0.638% | 10.23% | -20.84% | ||||||||
| 10-year Treasury note | 1.683% | 1.661% | 7.75% | -10.05% | ||||||||
| 30-year Treasury bond | 2.842% | 2.826% | 5.89% | -1.63% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 80.343 | 80.234 | -1.07% | -0.22% | ||||||||
| British pound | 1.5995 | 1.6021 | 0.67% | 2.94% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.625 | £0.624 | -0.67% | -2.86% | ||||||||
| Euro in dollars | $1.28 | $1.28 | 1.31% | -1.51% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.784 | € 0.781 | -1.30% | 1.53% | ||||||||
| U.S. $ in yen | 78.43 | 78.24 | -0.08% | 1.73% | ||||||||
| U.S. $ in Chinese | 6.36 | 6.34 | -0.07% | 0.53% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $1.023 | $1.023 | 0.87% | 4.28% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $0.978 | $0.977 | -0.86% | -4.11% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,731.80 | $1,740.50 | 2.62% | 10.53% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.689 | $3.645 | 6.70% | 7.35% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $33.6330 | $33.6900 | 6.97% | 20.48% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $8.8975 | $9.0500 | 0.03% | 36.31% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $7.8325 | $7.995 | -2.06% | 21.15% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.7563 | 0.763 | -2.11% | -17.51% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.7365 | 1.6305 | 5.40% | -24.38% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $96.54 | $96.42 | 0.07% | -2.32% | ||||||||
| (per barrel) | ||||||||||||
Even the pro-Obama media can’t spin hard enough to make the latest jobs numbers sound good for the president.
Headlines across the nation yesterday and today scream that 96,000 jobs were created in August and unemployment fell 0.2 percent, but any read of the data below the headlines is dismal for Democrats coming off a weak convention that was topped Thursday by a lackluster performance from the Great Bloviator himself.
The number of jobs created is about 30,000 or more below expectations, depending on whose predictions you use, and even that number is barely at the level the country would need to break even for the month.
The important number for the month is 368,000. That’s how many formerly employed Americans gave up hope of finding a job in August and fell off the government’s tables.
The number of people employed in August actually decreased by 119,000, according to the Bureau of Labor Statistics. But because of the huge number of people dropping out of the job market altogether, the total number of people counted as unemployed shrank by 250,000, producing an illusory decrease in unemployment from 8.3 percent to 8.1 percent.
The previous month, when unemployment rose to 8.3 percent, the administration had argued hard that it was “really” a rounded up number, that it was barely over 8.2 percent and statistically insignificant. This month, a phony 0.2 percent improvement is gospel.
The BLS also revised the employment numbers for July and June, noting that there were 19,000 fewer jobs in June and 22,000 fewer jobs in July than previously reported.
The mainstream media explanation for the poor jobs performance is, as the Washington Post put it, that corporations (those evil corporations) are just “sitting on a pile of cash,” and not hiring amid slow growth around the world.
The media actually are trying to use the numbers to bolster Obama’s convention claim that the economy is recovering, he just needs more time.
Obama has already benefited by dragging out this recession. According to the American Enterprise Institute’s James Pethokoukis, if not for the people who left the job market entirely in August, the jobless rate would have risen to 8.4 percent, and if the number of people in the job market was currently the same as when Obama came into office, the unemployment rate would be 11.2 percent.
Meanwhile, the U-6 unemployment number, which many people believe to be a truer accounting of the unemployment situation in the country, remains at 14.7 percent, down from 15 percent the month before, also a beneficiary of the shrinking labor pool.
In 2008, voters gambled on an unknown to “change” the country. No matter how you spin the numbers, Obama’s Administration has been one long, losing bet for America.
Obama claims that America is better off than we were 4 years ago, yet:
Copper rises on Stimulus Hopes...........
I guess the copper thieves will get busy............
Now read this News of the day from Howie Mandel:
"The President and Mitchelle Obama are in the front row at a Yankees game.
The row behind them is taken up with the secret service, one of whom leans over and whispers something into Obama's ear. As soon as he finishes, Mr. Obama grabs Mitchelle by the scruff of the neck and heaves her over the railing. Mitchelle falls 10 feet to the top of the dugout, kicking and screaming obscenities. The Secret Service agent leans over again and whispers: "Mr. President, I said, they want you to throw out the first PITCH!"
hey!! hey!! wha't this!! what's this!!!! Trenton DEMCRAPIC mayer arrested?? for corruption?? in an FBI sting????!!! OMG!!! that never happens with the "I'm for the little people" DEMOCRAPIC phony mantra....oh wait!! why just the other day another DEMOCRAP in Queens NY also arrested in a sting operation for, what else, CORRUPTION!! wow when you DEMOCRAPS get power you just can't help yourselves can you?? oh did George Bush make you steal the PEOPLE's money!! did Chenney do that to you?? Bet it was BIG OIL that corrupted you huh?? or did my Big Bad SUV do it?????you vial marxist pigs, so many corrupt black people too, hmmm, guess when your messiah is pres and head king of all marxists and corruption inside the Beltway you think you can get away with murder, hehe well your just helping the Conservative cause, you jackazzes are the very thing the voters have just about HAD ENOUGH of these past dismal 3.8yrs all you DEMOCRAPS are more finished than you can possibly imagine, and it took a marxist black regime to wipe you out, how funny is that!! I"m laughin' right now! HAHAHAHAHAHAHAAAAHAHHAHAAHA!!!!
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