Dow slips on Spanish worries; techs rally

The blue chips fall 25. Gains for Apple and others offset weakness in energy and financial shares. The 10-year Spanish bond yields 7%-plus on reports of deepening bank problems. Homebuilders move up on rising confidence.

By Charley Blaine Jun 18, 2012 1:03PM
Charley BlaineUpdated: 9:05 p.m. ET.

Europe just won't get fixed. The question today was how much U.S. investors cared. Investors in energy and financial stocks worried yet again that a European economy in recession would hurt their businesses.

But those declines were offset by gains in such stocks such as Apple (AAPL), eBay (EBAY), Amazon.com (AMZN) and Google (GOOG). 

True, conservatives came out ahead in in Sunday's election in Greece. But they're now having to form a government. Spain's banks are facing growing loan-loss woes, and 10-year Spanish bond yields jumped to a a record 7.28% before dropping back slightly.

So, for the second time in a week after what was supposed to be a major positive event for markets, the initial euphoria over a major European event has given way to the realization that the problems will need time, imagination and probably money to solve.

The Dow Jones industrials ($INDU) finished down 25 points to 12,742. Late Sunday, futures had suggested far more bullish open for the blue chips, but the Dow has rebounded off a loss of as many as 71 points. The Standard & Poor's 500 Index ($INX) gained 2 points to 1,345 after falling as many as 8 points after the open. The Nasdaq Composite Index ($COMPX) was up 23 points to 2,895.

Article continues below.
The Nasdaq-100 Index ($NDX), heavily influenced by Apple was up 21 points to 2,593. Apple was up $11.65 to $585.78, contributing 9.8 points to the Nasdaq-100's gain.

Futures trading suggests a modestly higher open on Tuesday.

Oracle rises on software sales growth, stock buyback
After the close, shares of software developer Oracle (ORCL) rose 3% to $27.92. The company reported fiscal-fourth quarter earnings of of 82 cents a share after one-time charges, a penny better than expected and up 10% from a year ago. And it said it would buy back $10 billion in common stock.

Revenue was up 1% to $11 billion. The company said new software licenses, a key measure of future revenue, were up 7.5% from a year ago. Software renewals were up 5%.

But sales of hardware revenue was down 14% from a year ago, and services revenue fell 4%. The company said the dollar's rise during the quarter reduced earnings by 4 cents a share. Revenue would have been 5% higher.

The company will pay a dividend of 6 cents a share on Aug. 3 to shareholders of record as of July 13.

In regular trading, Oracle was off 58 cents to $27.12, down 7.5% for the quarter.

Investors seek safety -- in the dollar
The dollar was higher as investor money sought safety. So were gold (-GC) and crude oil (-CL) in New York and Brent crude in London, although all bounced higher from early lows.

The Greek election was the start of a busy week of important economic events. The Federal Reserve meets Tuesday and Wednesday, and many investors are hoping for more stimulus measures. The government reports on housing starts and building permits on Tuesday. A series of reports in Europe are expected to show economies on the continent sliding more deeply.

And earnings are due from a number of companies, including FedEx (FDX) and Barnes & Noble (BKS) on Tuesday.

And this week or early next, the Supreme Court is expected to rule on the constitutionality of the Affordable Care Act. Tenet Healthcare (THC) and device-maker St. Jude Medical (STJ) were the top S&P 500 performers.

The Healthcare Select Sector SPDR (XLV) exchange-traded fund rose 25 cents to $37.31. The ETF is up 3.2% this month and 7.6% this year after rising 1.4% in 2010 and 10.1% in 2011.

Energy prices -- New York close



Mon.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$83.27

$84.03

-3.77%

-15.74%
(per barrel)











Heating oil (-HO)

$2.6177

$2.6465

-3.16%

-10.17%
(per gallon)











Natural gas (-NG)

$2.6350

$2.4670

8.79%

-11.84%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6609

$2.7017

-2.27%

0.13%
(per gallon)











Brent crude 

$96.08

$97.61

-5.68%

-10.52%
(per barrel)











Retail gasoline

$3.5050

$3.5090

-3.18%

6.99%
(per gallon; AAA)












Crude oil and gold fall as dollar rises
Crude oil settled down 76 cents to $83.27 after falling to as low as $82.04. Brent crude was down $1.90 to $95.71.

Natural gas (-NG) rallied strongly again and finished up 16.8 cents or 6.8% to $2.635 per million British thermal units. Gas is up 8.8% this month and nearly 24% for the quarter -- but still down 11.8% for the year.

The average price of gasoline fell to $3.505 from $3.524 on Friday, said AAA's Daily Fuel Gauge Report. While up 6.99% this year, retail gasoline is down 11% from its early April peak.

Gold settled down $1.10 to $1,627 an ounce. Silver (-SI) fell 6.9 cents to $28.671 an ounce. Copper (-HG), however, rose 1.2 cents to $3.3955 a pound.

Interest rates were lower, with the 10-year Treasury yield falling to 2.91% from 2.964% on Monday.

Spain is the problem -- again
Spain brought the happiness over the Greek election result to a quick halt.

El Confidencial, a business newspaper, said a report on Spanish banks due this week estimates they may have to write off 150 billion ($189 billion) in bad loans, mostly real estate, much more than anyone has estimated. The International Monetary Fund had estimated write-downs of 40 billion euros to 80 billion euros.

German Chancellor Angela Merkel added to the dismay. She would not accept any loosening of agreed upon reform pledges from Greece. She expects a quick formation of a new government, and Greece must fulfill commitments to lenders.

That gutted a modest European stock rally. German and British stocks were flat. French stocks were off 0.7%. Exchange-traded funds for Germany, France, the United Kingdom and Spain were all trading lower.

Microsoft introducts its 'Surface'
Late today, Microsoft introduced a new family of what it called a sub-two pound "full PCs" called "Surface."

The device features a "touch cover" that protects the screen and features a built-in keyboard.

The Surface will be built on Nvidia ARM processors, like Apple's iPad in 16 gigabyte and 32-GB versions, and are expected to be available in the fall when Windows 8 comes out. There will also be a Surface that runs on Intel-based processors, to run a full-blown version of Windows 8 Pro. This will come in 64-GB and 128-GB versions.

The device was introduced in Hollywood by CEO Steve Ballmer and Windows chief Steven Sinofsky.

Microsoft shares were down 18 cents to $29.84 in regular trading but were up 25 cents to $30.09 after hours.

Speculation for much of the day was that Microsoft and Barnes & Noble would introduce a new e-reader. Didn't happen. Barnes & Noble fell 36 cents to $15.24 in regular trading but rose a penny to $15.25 after hours.

Apple, as noted, was up fairly sharply.

Energy and financial shares weigh on markets
Energy and financial shares fell the most among 10 S&P 500 sectors. Energy shares fell as crude oil in New York fell to $83.37 a barrel. Brent crude had fallen $1.50 to $96.11.

Exxon Mobil (XOM) was off 11 cents to $83.11. Chevron (CVX) dropped 87 cents to $103.46. The Energy Select Sector SPDR (XLE) exchange-traded fund fell 67 cents to $64.95.

Meanwhile, 298 S&P 500 shares were higher, led by Tenet Healthcare, eBay (EBAY), St. Jude Medical and homebuilder Lennar (LEN).

Large-bank stocks weighed on the financial sector, with Citigroup (C) down 76 cents to $27.55 and Bank of America (BAC) off 14 cents to $7.76. JPMorgan Chase (JPM) was down 41 cents to $34.62.

Housing shares were higher after a measure of builder confidence hit a 5-year high. (But builders, as a group, are not

D.R. Horton (DHI) and Lennar gained 62 cents to $16.50 and $1.07 to $26.97, respectively, as confidence among builders climbed to a five-year high.

Eleven of the 30 Dow stocks were higher, led by Kraft Foods (KFT) and Home Depot (HD). The laggards were Hewlett-Packard (HPQ) and Bank of America.

EBay was also was the top Nasdaq-100 performer, followed by Green Mountain Coffee Roasters (GMCR) and chipmaker Marvell Technology (MRVL). A total of 78 of the stocks in the index were higher. The laggards were Fossil (FOSL) and Research In Motion (RIMM)

Facebook tops $31; Groupon jumps on an upgrade
Facebook (FB) jumped $1.40 to $31.41, a month after its initial public offering. The shares are up 23.4% from their low on June 6 but still off 17.3% from their IPO price of $38.

Shares of Groupon (GRPN) rose $1.09 to $11.15 after Morgan Stanley upgraded the daily coupon site to overweight. The gain was Groupon's largest since May 14. Analysts Scott Devitt and Zachary Arrick said Groupon should be able to profit from big international opportunities.

LinkedIn (LNKD) and Zynga (ZNGA) were up $3.15 to $105.16 and 22 cents to $5.78, respectively. Review-site Yelp (YELP) added 2 cents to $21.15.

Short hits from the markets -- New York close



Mon.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0800%

0.090%

14.29%

700.00%
5-year Treasury note 

0.685%

0.678%

2.09%

-17.47%
10-year Treasury note

1.584%

1.587%

0.19%

-15.34%
30-year Treasury bond

2.679%

2.694%

0.26%

-7.27%
Currencies











U.S. Dollar Index

82.216

81.967

-1.10%

2.10%
British pound

1.5676

1.5743

1.71%

0.89%
(in U.S. $)

 








U.S. $ in pounds

£0.638

£0.635

-1.68%

-0.89%
Euro in dollars

$1.26

$1.27

1.99%

-2.70%
(in U.S. $)

 








U.S. $ in euros

€ 0.793

€ 0.785

-1.95%

2.77%
U.S. $ in yen 

79.05

78.93

0.63%

2.53%
U.S. $ in Chinese

6.38

6.36

-0.03%

0.84%
yuan











Canada dollar

$0.977

$0.981

0.85%

-0.44%
(in U.S. $)

 








U.S. dollar 

$1.025

$1.020

-0.85%

0.44%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,627.00

$1,628.10

4.01%

3.84%
(per troy ounce)

 








Copper (-HG)

$3.396

$3.384

0.89%

-1.18%
(per pound)

 








Silver (-SI)

$28.6710

$28.7400

3.29%

2.71%
(per troy ounce)

 








Wheat (-ZW)

$6.3025

$6.0950

-2.10%

-3.45%
(per bushel)

 








Corn (-ZC)

$5.9950

$5.795

7.97%

-7.27%
(per bushel)

 








Cotton 

$0.7187

0.7088

0.03%

-21.61%
(per pound)

 








Coffee

$1.5150

1.52

-7.03%

-34.03%
(per pound)

 








Crude oil (-CL)

$83.27

$84.03

-3.77%

-15.74%
(per barrel)










 

145Comments
Jun 18, 2012 2:33PM
avatar
It's Greece, it's Spain.  What about our economy??
Jun 18, 2012 1:40PM
avatar
Aren't stocks struggling on US worries as well?
Jun 18, 2012 1:46PM
avatar

i can see it now, stock market closed until America gets it's crap together.

the dollar still getting better but gas will not go down because of obama's EPA shutting down refineries, this country is going to hell.

Jun 18, 2012 3:12PM
avatar

Our economy will not improve until President and King He-who-will-cool-the-planet (And-it's-not-my-fault) is rejected by the people.

Jun 18, 2012 2:20PM
avatar

A bit of sanity in the markets for a change?  Hopefully people are starting to realize that you can only put so much lipstick on a pig.  

 

Interesting though.  I assumed that the institutions would sell off so as to lure the FED into announcing another QE.  Maybe that's for tomorrow.   

Jun 18, 2012 3:30PM
avatar
Every one tired of these headlines an coverup stories stand up an cheer!!!!!!!  whats wrong telepromter not working??  We all know things are not good here but you keep giving what the leading authories think we can handle instead  of the big picture!!  JUST ONCE TELL THEM TO GO TO H- - L  AN GIVE IT TO US STRAIGHT! They are afraid of a panic an they will lose their al mighty GOD profit.Heaven forbid they end up with the rest of mankind an have actualy have to work for what they say we can live on.
Jun 18, 2012 4:59PM
avatar

Same "Stuff" different day. Anyone else getting as tired of hearing the same thing over and over as I am?

 

 

Jun 18, 2012 2:37PM
avatar
Complete and utter nonsense to fill an editorial void.
Jun 18, 2012 4:49PM
Jun 18, 2012 3:37PM
avatar
How can the Dow and the S&P both be lower or flat when the energy and financial sectors are two of the biggest pimps of the American people..........  between the two of them they control at least 50%, if not more, of everyone's lives......  anyone notice that you don't hear to much about the medical and insurance crooks - they must be getting ready to spring more increases on the people so as to supplement their already record profits.....   
Jun 18, 2012 5:02PM
avatar

I just tallied up my home heating bills for this past heating season.I saved $878.00 compared to last year.Thanks Global Warming.

Jun 18, 2012 4:44PM
avatar
THE REAL MUTT IS @ 1600 Pennsylvia Ave
Jun 18, 2012 3:22PM
avatar
Looks like they can't find a way to use Greece as an excuse today so they will sit in limbo land for a short while, probably until 3:30, while they contemplate the best reason to use for their next raid - they will never run out of ways to rape and pillage the people........... get out now and let these rapid animals feast on each other.   
Jun 18, 2012 4:48PM
avatar

Oh, I see - today it's Spain.  The fact the Greece will never be able to pay off it's "loans"  no longer matters.  What a joke.  Bad joke, actually.  And we can't wait to emulate Europe's failures with QE3-4-5-6 - or at least through the election.  Worst government money can buy.

 

Jun 18, 2012 2:24PM
avatar
Watch for the bottom to fall out, someone just farted on the Euro in Liechtenstein!
Jun 18, 2012 1:50PM
avatar
sooner or later the world economy will collapse every body around the world baying time right now
Jun 18, 2012 7:04PM
avatar

I know how we can pay down some of the Debt or at least pay the interest cost..

 

Immediately QUIT sending bags of MONEY to:

Egypt...      Turkey?

Iraq...          Other African Nations

Afghanistan..

Eurozone..

Pakistan ?

Libya ?

Israel ?

Saudi Arabia ? and United Emerits Countries..

Jun 18, 2012 5:40PM
avatar
OH no!!! but the private sector is still doing fine, right? RIGHT!!
Jun 18, 2012 6:46PM
avatar
In a nutshell, The Left hand promises, while the Right hand is rummaging around in your pocket, crazy.  Thats it, pure and simplified.   Still, I would rather go with the side that appears to give some lip service to the needs of the middle class and actually services those needs from time to time. How many times must we vote for (R)s who only make policy which rewards the already-enriched? 
How many times does it take for the American public to "get it"...before its all "got"?

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