Dow off 138 as European worries slam stocks

Investors sell on fears Europeans can't solve their debt crisis. Crude oil briefly falls below $79; gold moves higher. News Corp. may split into 2 companies. The Supreme Court won't rule on health care until Thursday.

By Charley Blaine Jun 25, 2012 12:21PM
Charley BlaineUpdated: 2:20 a.m. ET, Tuesday

Europe's debt crisis beat up the U.S. stock market today as worries built that a summit set for this week will accomplish little to stabilize the region's financial and banking system.

The Dow Jones industrials ($INDU) were down as many as 183 points before losses were trimmed by a quarter. The Standard & Poor's 500 Index ($INX) briefly went into the red for June. A surprising gain in new-home sales was largely ignored.

Financial and energy stocks were the weakest sectors of the market. Health care stocks were lower as investors awaited the Supreme Court's ruling on the 2010 federal health care law. That decision is now expected Thursday at the earliest.

The euro dropped against the U.S. dollar. That, in turn, pressured many commodity prices. Crude oil (-CL) briefly fell below $79 a barrel in New York before rebounding. Brent crude briefly dropped under $90 a barrel. Gold (-GC), however, was higher.

The Dow closed off 138 points to 12,503. The S&P 500 dropped 21 points to 1,314. The index had fallen to as low as 1,309 around 12:30 p.m. ET, a point below its May 31 close. The Nasdaq Composite Index ($COMPX) dropped 56 points to 2,836. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 52 points to 2,534.

Article continues below.
Apple (AAPL), the largest influence on the index, was off $11.33 to $570.77. Microsoft (MSFT) was off 84 cents to $29.87 after announcing it had acquired social networking site Yammer for $1.2 billion. Reports of the deal surfaced about two weeks ago.

Apple and Microsoft contributed more than 15 points to the Nasdaq-100's decline. (Microsoft is the publisher of MSN Money.)

The finish left the Dow up 0.88% for June, with the S&P 500 up 0.26% and the Nasdaq up 0.31%. For the year, the Dow is up 2.3%. The S&P 500 is up 4.5%, with the Nasdaq up 8.9%.

Walgreen (WAG) is the key earnings report on Tuesday. Standard & Poor's releases its April S&P / Case Shiller Home Price Index report, and the Conference Board reports on consumer confidence in June.

After the close, Moody's Investors Service downgraded its ratings on 28 Spanish banks. The downgrades reflect the weakness in the Spanish economy and worries about the Spanish government's creditworthiness. As important, the downgrades reflect Moody's concern over the banks' exposure to losses in commercial real estate.

Futures trading suggests stocks will open slightly lower on Tuesday.

Is News Corp. headed to a break up?
The market will take some time to examine a story in The Wall Street Journal that says Rupert Murdoch's News Corp. (NWSA) is considering breaking the company into two pieces.

One would contain News Corp's film and television businesses, including the Fox Broadcasting Network and the Fox News Channel, The Journal said.

The other, smaller piece, would contain the company's newspaper and publishing businesses, including Dow Jones & Co., the parent of The Journal, plus newspapers in England and Australia. News Corp. shares closed Monday at $20.85, down 28 cents.

The shares are up 12.6% on the year -- but down 15.4% from their high in 2007 before News Corp. bid $5.7 billion for Dow Jones.

Crude oil holds below $80
Crude oil settled down 55 cents to $79.21 a barrel after falling to as low as $78.03. Brent crude settled up 3 cents to $91.01 a barrel after falling to as low as $89.60.

The national average price of gasoline fell to $3.411 a gallon from $3.42 on Sunday and $3.454 on Friday, according to AAA's Daily Fuel Gauge Report. Monday's price is down 13.3% from highs reached in early April, although the price is still up 4.1% for the year.

Gold settled up $21.50 to $1,588.40 an ounce, although it has been moving lower in electronic trading.

Copper (-HG) was up 1 cent to $3.316 a pound. Silver (-SI) finished up 85.9 cents to $27.52 an ounce.

Interest rates were lower, with the 10-year Treasury yield falling to 1.614% from 1.672% on Friday.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$79.21

$79.76

-8.46%

-19.85%
(per barrel)











Heating oil (-HO)

$2.5348

$2.5320

-6.23%

-13.02%
(per gallon)











Natural gas (-NG)

$2.7340

$2.6680

12.88%

-8.53%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.4982

$2.4676

-8.25%

-5.99%
(per gallon)











Brent crude 

$91.01

$90.98

-10.66%

-15.24%
(per barrel)











Retail gasoline

$3.4110

$3.4200

-5.77%

4.12%
(per gallon; AAA)












Eurowoes just keep mounting
Investors took what The Wall Street Journal called "a skeptical view" of a Spanish request for EU aid to bail out its banks. The country made its formal request for bank aid, but mentioned no specific sum outside of the previously stated maximum of $125 billion.

Spain's IBEX 35 Index ($ES:IB) fell 237 points to 6,639. Italy's FTSE MIB Index ($IT:FTSEMIB) dropped 542 points to 13,121.

It has been a day of complications for the European Union. This week's summit was expected to tackle a potential renegotiation of Greece's bailout terms and proposals to create a fiscal and banking union at the two-day summit, which starts Thursday in Brussels.

But Greek Prime Minister Antonis Samaras just had eye surgery and can't attend the meeting. And he's also looking for a new finance minister after Vassilis Rapanos resigned today. Rapanos also was having health problems.

Meanwhile, Cyprus formally requested aid from Europe’s bailout fund Monday as it scrambles to shore up its banking system, which has been hit by Greece’s debt crisis.

New-home sales show some life
New-home sales were up 7.6% in May from April to a seasonally adjusted annual rate of 369,000, the Commerce Department said. The rate was also up 19.8% from a year ago. The sales rate easily beat the consensus estimate of 345,000 units. 

Moreover, as Michael Darda, chief economist at MKM Partners, wrote in a client note, the fraction of sales coming from completed homes has hit a six-year low, while the monthly supply of new homes at the current sales pace has fallen to the lowest level since 2005. "These forces should help to reinforce a gradual recovery in pricing over time," he wrote.

But homebuilding stocks were lower. PulteGroup (PHM) was off 16 cents to $9.23. The Philadelphia Housing Sector Index ($HGX) fell 2.47 to 121.96.

Wal-Mart is the lone Dow stock in the black; financials and energy shares sag
Wal-Mart Stores
(WMT) was alone among the 30 Dow stocks showing a gain today, rising 88 cents to $68.18.

Bank of America (BAC) was the biggest Dow decliner, down 34 cents to $7.60. It was hardly alone among bank stocks generally. JPMorgan Chase (JPM) was off 67 cents to $35.32. Citigroup (C) dropped $1.24 to $26.75. 

European bank stocks were harder hit in New York. French banking giant BNP Paribas (BNPQY) was off $1.07 to $17.48.  Deutsche Bank (DB) dropped $1.75 to $34.23.

Energy shares were hurt by the oil price drop, although they recovered some of their early declines as crude perked up.  Exxon Mobil (XOM) fell 87 cents to $81.24, and Chevron (CVX) was off $1.36 to $99.08.

Construction-equipment manufacturer Caterpillar (CAT), which generates a sizable amount of revenue in Europe, was off $2.07 to $82.89 and contributed nearly 16 points to the Dow's loss.

Twenty-eight S&P 500 stocks were higher, led by Constellation Brands (STZ), up $2.49 to $21.86 following reports that Anheuser-Busch InBev (BUD) is close to a complete takeover of Mexican brewer Grupo Modelo. The bid for the 50% of Modelo it does not own is pegged at about $12 billion. Constellation distributes Corona and other imported beers in the United States in a joint venture with Modelo. Anheuser-Busch InBev was up 56 cents to $70.85.

Chesapeake Energy (CHK) was the S&P 500 laggard, down $1.58 to $17.03.

Chesapeake plotted with its top competitor to suppress land prices in one of America's most promising oil and gas plays, a Reuters investigation charged. In emails between Chesapeake and Encana (ECA), Canada's largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners.

Encana was off 82 cents to $19.04.

Only six Nasdaq-100 stocks showed gains. They were led by Randgold Resources (GOLD), Vodaphone (VOD) and Virgin Media (VMED). The laggard was Research In Motion (RIMM), down 75 cents to $9.11. The BlackBerry maker is expected to report a loss when it reports quarterly results after Thursday's close. The company said today it remains committed to its turnaround plan.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0800%

0.070%

14.29%

700.00%
5-year Treasury note 

0.709%

0.751%

5.66%

-14.58%
10-year Treasury note

1.608%

1.672%

1.71%

-14.06%
30-year Treasury bond

2.682%

2.756%

0.37%

-7.17%
Currencies











U.S. Dollar Index

82.662

82.442

-0.56%

2.66%
British pound

1.5562

1.5593

0.96%

0.16%
(in U.S. $)

 








U.S. $ in pounds

£0.643

£0.641

-0.96%

-0.16%
Euro in dollars

$1.25

$1.26

1.05%

-3.60%
(in U.S. $)

 








U.S. $ in euros

€ 0.801

€ 0.796

-1.04%

3.73%
U.S. $ in yen 

79.81

80.47

1.60%

3.51%
U.S. $ in Chinese

6.39

6.36

0.09%

0.96%
yuan











Canada dollar

$0.970

$0.975

0.19%

-1.10%
(in U.S. $)

 








U.S. dollar 

$1.031

$1.026

-0.20%

1.10%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,588.40

$1,566.90

1.55%

1.38%
(per troy ounce)

 








Copper (-HG)

$3.316

$3.306

-1.47%

-3.49%
(per pound)

 








Silver (-SI)

$27.5200

$26.6610

-0.85%

-1.42%
(per troy ounce)

 








Wheat (-ZW)

$7.2425

$6.7325

12.50%

10.95%
(per bushel)

 








Corn (-ZC)

$5.9400

$5.540

6.98%

-8.12%
(per bushel)

 








Cotton 

$0.7005

0.6912

-2.10%

-23.59%
(per pound)

 








Coffee

$1.5875

1.559

-2.58%

-30.87%
(per pound)

 








Crude oil (-CL)

$79.21

$79.76

-8.46%

-19.85%
(per barrel)










 

246Comments
Jun 25, 2012 1:07PM
avatar
So when are the gas prices going to drop to match the price of barrel of oil?  The media sure is sugar coating what is going on.Where is the objective reporting?
Jun 25, 2012 2:23PM
avatar

today the states KNOW that the fed wants "control" of the borders, and will make sure they do everything to insure OPEN borders. 

 

illegal aliens?  what's that? 

 

>>>>>If you are applauding the SC ruling today, please submit your address in a separate post. We will ensure that all those illegals come to your home and park themselves in your backyard, eat your food, use your educational/health care resources and then go their merry way. If that does not make sense to you, than neither should today's SC ruling.<<<<<

Jun 25, 2012 2:00PM
avatar
If you are applauding the SC ruling today, please submit your address in a separate post. We will ensure that all those illegals come to your home and park themselves in your backyard, eat your food, use your educational/health care resources and then go their merry way. If that does not make sense to you, than neither should today's SC ruling.
Jun 25, 2012 4:03PM
avatar
Longbeach, in answer to your question my point is the following;

Approximately 3 1/2 years ago the majority of the American voting public was snookered by the catchy slogan "Hope & Change".  In the time since there has neither been any meaningful CHANGE unless you care to tally that made in a negative direction nor has the HOPE that was so highly touted materialized based on the polls of the citizenry that I have seen.  In essence this administration, and by that I most definitely include all 3 branches of the federal government, has pi$$ed away trillions of dollars and several years having had virtually no impact of any significance on the direction of this country politically or economically.  Is this Obama's fault? No, not entirely, but he does get to shoulder his share of the responsibility. Outside of being a very well educated, extremely articulate and cunning individual he is perhaps the least qualified person to have sought the presidency and to have taken the seat in recent and not so recent history. There is also a heaping helping of responsibility that gets laid squarely on the floor of congress. They are so busy playing partisan politics and following the party line that they have failed miserably to govern this country effectively or efficiently. It's not the Republicans and it's not the Democrats. With very few exceptions, and there are a few, it is BOTH of them. If they had been busy governing the country and doing so with qualified advisers and counsel there is much that could have been done during this time period with these same dollars that would have had some positive impact of the country.

I could write a book or at least a very lengthy dissertation on why the government has failed We The People in order to pander to the wealth mongers including their own coffers and that of their lobbyists interests that ensure that their cash flow remains uninterrupted for the foreseeable future.

I'll get off my soapbox now. Anyone with a lick of common sense and financial acuity knows that it's time to throw the bums off the gravy train. I see "the founding father's" used a lot in posts. Today's piece of factual history is that this country was founded on volunteer, citizen elected officials not on professional politicians(don't take my word for it, do some research). You got elected by your constituency, went and fulfilled the duties of the office elected to and went home. Back to your real job! Now, if we could get things moving back in that same direction there's a CHANGE that I HOPE to see in my lifetime.

Thanks for listening y'all.

Jun 25, 2012 1:29PM
avatar
"coordinated QE"

Let's hope not. More debasing of currencies will force a war no one wants because money is too weak to buy things as it is.

Today, all salaried eyes are on the Supreme Court decisions. No one else cares because we're too busy on basic survival. The Dow remains thousands of fiat points higher than the true exchange value of the stocks it contains. A management team, Board and some ancillary personnel isn't a real business. The SEC should be dropping those pariah and seeking out enterprises with labor, operations, management and a tangible product Americans want to buy.

I heard today that Baltimore wants to sell advertising space on it's fire stations. How about not, and we focus on job recovery to fund fire stations. Anybody else thinking we should give New York back to Old York and start fresh without pariah? 
Jun 25, 2012 1:51PM
avatar

Supreme Court ruling on ObamaCare

is exactly the same worry as

Stocks awaiting the resolve of the Eurpean financial crisis

 

EITHER WAY, WE ARE IN DEEP $HIT.

 

Obama does what he does best,

Create a problem then campaings against it.

Jun 25, 2012 4:20PM
avatar

And now for a Spelling Lesson-------

The last four letters in American..........I Can
The last four letters in Republican........I Can
The last four letters in Democrats.........Rats

End of lesson. Test to follow in November, 2012

Remember, November is to be set aside as rodent removal month.

Jun 25, 2012 1:59PM
avatar
And the future of my retirement is based on this crap shoot!!!!!!!
Jun 25, 2012 1:25PM
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Stocks rise Stocks fall more Bull S from FRAUD STREET !   TAKE YOUR MONEY AND RUN !!
Jun 25, 2012 1:21PM
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This is all a big joke on investor money. This whole European ,Spain , Greece problem has been priced in so many times it is embarrassing to investors intelligence!!!!
Jun 25, 2012 12:49PM
avatar
Headline revisions:

Stocks dive on European worries...scratch, scratch, scratch...
Stocks dive on Asian worries...scratch, scratch, scratch...
Stocks dive on US worries...scratch, scratch, scratch...
Stocks dive on world worries...scratch, scratch, scratch...

Worldwide government deregulation of market manipulators has run amuck and the sky IS falling!!

Jun 25, 2012 2:17PM
avatar

Something big is coming... I guess it´s coordinated QE, involving the Fed, ECB, BOE and BOJ...

 

Uh huh. Something very big is coming and all the pretend bail outs with pretend money and pretend value will not stop the complete collapse of the monetized debt base of Europe AND the US. They all fall down together. Sorry about yer comfy retirement.

avatar
wake up america, if we really wanted to cut the deficit its really easy to do and do quickly. the answer is term limits on all congressmen and senators limit them to two terms period. that way they will be gone before they can get in our pockets when they are done serving let them go home and get a JOB just like the rest of us. come on people read the constitution these are supposed to be public service jobs not carreer fields. eliminate all the golden parachute goodies that they take when they leave and we would have a budget surplus in no time. i wish i could get a JOB where i could keep all that i could legally steal and retire at my full pay after serving only one term, free postage and health care for life. wouldn't it be nice to vote yourself a payraise every year while starving our seniors and giving them no cola raises for five years. we have a corrupt system and until we the people rise up and make changes it will continue to be corrupt. if each one of them make two hundred thousand a year plus medical benefits free postage office space in washington and in their home district and many other benefits we could save billions each year. our poor and elderly could use a little of this to live.
Jun 25, 2012 12:58PM
avatar

Why is this guy always smiling? I guess because the job only requires the ability to cut and paste.

See Kindergarten does payoff. Whats up for tomorrow "Stocks Recover on Rise of Stabilizing  Euro"

 

 

Jun 25, 2012 1:26PM
avatar

Endeavor,

 

I would be careful making TOO much fun of Romney's name.  Otherwise, where was Hussein Obama today?  Perhaps visiting the World Trade Center or maybe a Mosque?

Jun 25, 2012 4:19PM
avatar

Origin of Left & Right...
I have often wondered why it is that Conservatives are called the "right" and Liberals are called the "left."

By chance I stumbled upon this verse in the Bible:
"The heart of the wise inclines to the right, but the heart of the fool to the left."
Ecclesiastes 10:2 (NIV)

Thus sayth the Lord. Amen.

Can't get any simpler than that.

Jun 25, 2012 4:23PM
avatar
Well, oil is DOWN 20% for the year and gas is UP 4% for the year.  Anything wrong with this picture?  Our President and Congress, who are bought and paid for by big oil sure aren't starting any gouging investigations, are they?  Make a clean sweep in November.  Vote all the incumbent representatives and senators out and lets get a new president too.  It can't get much worse than the one we have.
Jun 25, 2012 2:52PM
avatar
Does ObamaCare cover the cost of mental diseases, like Libtarditus, Socialism and sodomy? 
Jun 25, 2012 4:03PM
avatar
Nah, longbeach...  I made my point, I prefer to keep my focus on the failure of Obamanomics and the failed economic policies of this administration that have so harmed the poor and middle class.  His "stimulus" that drove the unemployment rate from 7.2% to over 10%.  His 5.5 trillion in new debt, likely to top 6.5 trillion before he leaves office.  His corruption that makes Nixon look like a saint.  

It's the economy stupid....   and that's what I intend to hammer home....
Jun 25, 2012 2:47PM
avatar

bend over

here comes the hope and  change

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