Dow off 138 as European worries slam stocks
Investors sell on fears Europeans can't solve their debt crisis. Crude oil briefly falls below $79; gold moves higher. News Corp. may split into 2 companies. The Supreme Court won't rule on health care until Thursday.
Europe's debt crisis beat up the U.S. stock market today as worries built that a summit set for this week will accomplish little to stabilize the region's financial and banking system.
The Dow Jones industrials ($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.
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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%|
|Heating oil (-HO)||$2.5348||$2.5320||-6.23%||-13.02%|
|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; 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.|
|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%|
|U.S. Dollar Index||82.662||82.442||-0.56%||2.66%|
|(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%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$79.21||$79.76||-8.46%||-19.85%|
It's the 1930's allover again. Are you paying attention?
Cept this time, America's leaders appear to be on the wrong side. Time will tell....
"... if the market goes up 225 points today... "
The Dow should go up 1,000 points today and validate what everyone suspects... that Wall Street controls America. Nothing good caused for optimism last night, only greed can ignore how bad it has gotten while we are helpless to stop what is rotten.
"Was not the alternative to TARP nationalization?"
TARP was completely unnecessary. Every move demanded by then Secretary of Treasury Hank Paulsen was Inflation-oriented. He was the former CEO of Goldman Sachs, so he knew everything about fiat money and falsely-prioritized paper contracts. A man of that knowledge knew that all we had to do was let the major banks fail and it would have dashed the contracts, derivatives exposure and forced a reconciliation just as the mortgage defaults were in full bloom. You rarely hear about Hank these days. He cashed in GS stock recently for $500 million. Where do you think his loyalties were?
"He repealed the Glass-Steagal act, which allowed the banks to stop being banks and become gamblers in the financial markets."
That was Republican-controlled Congress that repealed Glass-Steagall. It was also Republicans that put together the outrageous- Gramm (R) Leach (R) Bliley (R) Act that made it legal for banks and any other financial pariah to collude ireesponsibly and without oversight. GLBA was so gutless, it was slipped into other legislation and passed without anyone knowing it was there. Notably, that Act was passed in 1999, same time as Goldman Sachs' IPO, and introduction of Marked to Market facilitation for credit. You're not kidding anyone by not pointing to the benefactors as the purpetrators.
"Wouldn't it be nice some morning to wake up and find that the stock market hit ZERO?"
NAFTA: replay that video from the day he announced it- solemnly- while a broad-grinning Bush stood nearby. NAFTA didn't help any Clinton supporters and he certainly hasn't benefited from it either. On the otherhand, the whole financial sector and business platform oligarchies across America have had incredible success destroying the global economy with it.
News Corp: Just splitting in two? That's half for Rup half for Jim, both pieces working various market aspects to double the pickle juice. I'll take independent newspapers in every city, over controlled and fixed media.
Wal-Mart: The lone Dow stock in the black yesterday. Hate to tell you, Wall Street, but when there is nothing left to eat, the street still won't beat a path to a Wal-Mart. Any suit decisions yet?
You hit the nail on the head in your post about Bill Clinton. His screwups started most of the problems we now have. Don't forget about the abortion known as NAFTA. He pushed that abomination through claiming it would raise everyones standard of living. How's that working out Billy-boy!
BUILD YOUR BUNKERS,BUY SOME GUNS ,BE READY TO PROTECT YOUR FAMILY AND WHAT LITTLE YOU HAVE LEFT,BECAUSE THE IDOT POLITICANS,BANKERS,AND MARKETS,HAVE LOST CONTROL OF JUST ABOUT EVERTHING,THEY JUST DONT GET IT THERE IS NO QUICK FIX,THEY CHANGED THE RULES AND WE ARE PAYING FOR IT,LET THE BANKS FAIL ,LET THE STOCK MARKETS FAIL,PRINTING MORE MONEY FOR MORE BAILOUTS WILL NEVER WORK,WE ARE IN A DEPRESSION AND UNTIL THEY ADMIT IT ,IT WILL BE MORE OF THE SAME OLD BULLCRAP ,THEY SHOULD HAVE ARESSTED AND PROSICUTED THE IDOT MORONS THAT MADE THIS MESS IN THE FIRST PLACE, ALL IT IS NOW IS FUBAR!
no it's not the stock market talking 'another' beating, it's the American public getting hammered by this illegal and marxist regime known as the obamanation regime, hell bent on destroying what's left of this country, hang in there people and remember this math equation, keep reminding urself each day til Nov
Romney + obama = Reagan/carter redux
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[BRIEFING.COM] Stocks ended modestly higher as the S&P 500 climbed 0.2%, and the Dow added 0.4% to register its 19th consecutive Tuesday of gains.
The major averages saw little change during morning action, but afternoon buying interest helped lift the indices to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology outperformed. ... More
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