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.
Updated: 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) | ||||||||||||
we need to end all welfare.especially social security.lets face it a huge portion of our taxes are going to keep these old people alive.why? they dont contribute anything.all they do is take from the earners.another huge expense is food stamps.why should we tax payers have to feed these scumbags that make so little they cant feed themselves.this socialism has to end.vote republican for real change
tumbleweed thats communist thinking there
You are right about the deadbeat democrats... They vote for a living, instead of working for one. These freeloaders sponge off the rest of us that PAY TAXES.
It is sad that we have an entire party of people that believe they are entitled to live off others. Used to be they would have pride and work and pull their own weight.
But "57 States", the food stamps President believes work to be optional.
This moronic socialist must be fired along with 2500 more Donkey office holders, before there can be a real recovery...
§ Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. (In years like the last few, this group also includes a significant number of people who have been unemployed the entire year and cannot find work.)
§ Moreover, low-income households as a group do, in fact, pay federal taxes. Congressional Budget Office data show that the poorest fifth of households paid an average of 4.0 percent of their incomes in federal taxes in 2007, the latest year for which these data are available — not an insignificant amount given how modest these households’ incomes are; the poorest fifth of households had average income of $18,400 in 2007. The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10.6 percent of their incomes in federal taxes.
§ Moreover, even these figures greatly understatelow-income households’ totaltax burden because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2011
§ When all federal, state, and local taxes are taken into account, the bottom fifth of households pays about 16 percent of their incomes in taxes, on average. The second-poorest fifth pays about 21 percent
What if Reagan was Obama?
Our debt was $994 billion when Reagan took office, 8 years latter we owed $2.867 trillion, an increase of 288%. When Obama took office the debt was $11,909 trillion X 288% = $34,297 trillion. I thank God every day that Obama is the most conservative President we've had in 60 years only growing government at 1.4% annually, compared to Reagan's massive spending programs with a 8.7% annual growth rate, one more Reagan would ruin our nation, I liked the old Gipper, but the truths the truth and I ware it with Honor.
Comrade Max Sparticus...
I see you are into ranks... The USA spends themost on education. Both in total, and in per student, of anywhere in the world. But we rank 27 in quality of education. Total they announced that Chicago, Obama's home town, had the highest high school graduation percentage ever, at 61%! The national average is 71%.
So our public option educational system SPENDS the most, yet comes in 27th in the world. We also have this dismal national graduation rate. Would you recommend firing all teachers and finding some competent? Clearly they are incompetent.
What say you?
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