Stocks crawl back from early losses

The Dow falls nearly 240 points before a rebound trims the loss to 101 points. Worries build that Spain will need a major bailout. Greece is staring at running out of cash. McDonald's and Texas Instruments say global worries are hurting business.

By Charley Blaine Jul 23, 2012 11:56AM
Charley BlaineUpdated: 7:23 p.m. ET

Stocks dropped sharply at the open today on worries that Spain's finances are falling apart and Greece may run out of cash in the next few months. But the U.S. market rebounded off the lows in the afternoon, cutting losses by more than half.

The Dow Jones industrials ($INDU) fell as many as 239 points soon after the open, but the blue chips finished the day down about 101 points to 12,721. European stocks suffered bigger losses. German and French stocks stocks were off more than 3%. Spanish stocks fell as much as 5% before rebounding to a 2.8% loss.

The European slump slammed the euro, which fell to levels not seen since June 2010 and is down 6.5% against the dollar this year. It is a big reason why McDonald's (MCD) noted this morning that currency fluctuations reduced its reported earnings per share in the second quarter by 5%. Crude oil (-CL) and gold (-GC) also were lower.

The slump came as the second-quarter earnings season hits one of its busiest weeks. In addition to McDonald's, reports are due this week from Apple (AAPL), DuPont (DD), Boeing (BA), Caterpillar (CAT), 3M (MMM), Exxon Mobil (XOM) and Facebook (FB). At the same time, there are worries that Friday's gross domestic product report will show no U.S. economic growth.

In addition to the Dow's close, the Standard & Poor's 500 Index ($INX) was off 12 points to 1,351; the index had been down as many as 25 points. Once down 72 points, the Nasdaq Composite Index ($COMPX) closed down 35 points to 2,890. The major averages were down for a second day in a row; the Dow suffered its second loss of more than 100 points in two days.

Article continues below.
The Nasdaq-100 Index ($NDX), heavily influenced by Apple, was off 26 points to 2,592, after falling as many as 68 points after the open. Apple, which reports fiscal-third-quarter earnings after Tuesday's close, fell 47 cents to $603.83, It had traded as low as $587.71.

Microsoft
(MSFT), the publisher of MSN Money, was off 83 cents to $29.28. Cisco Systems (CSCO) fell 29 cents to $16.07.

Earnings are due Tuesday from Dow components AT&T (T) and DuPont (DD), truck builder Paccar (PCAR), Whirlpool (WHR), Peabody Energy (BTU), Netflix (NFLX) and, of course, Apple.

The one domestic economic report is the May home price index report from the Federal Housing Finance Agency. There are purchasing managers reports on manufacturing due from China, Germany and France. Futures trading suggest more pressure on the markets.

Texas Instruments warns on 3rd quarter results
After the close, Texas Instruments (TXN) shares fell 14 cents, or 0.5% to $26.68 after offering third-quarter earnings-and-revenue guidance that was lower the consensus Wall Street estimate. The shares had fallen 43 cents to $26.82 in regular trading.

TI said it expects 34 cents to 42 cents a share in earnings, with revenue at $3.2 billion to $3.47 billion. The consensus estimates were 50 cents a share on earnings and $$3.54 billion. "The global economic environment is causing (customers and distributors) to become increasingly cautious in placing new orders," CEO Rich Templeton said in a statement.

TI earned 38 cents a share on the second quarter on $$3.33 billion revenue. Earnings were down 32% from a year ago; revenue was off 4%. The earnings included 6 cents a share in charges for its acquisition of National Semiconductor. Wall Street had been looking for 41 cents a share in earnings on revenue of $3.35 billion.

Europe hijacks the markets
Today's slump came after a slump on Friday as worries about Spain and Europe suddenly erupted after several weeks of relative calm.

The European crisis, combined with worries about a slowing economy in China and the possibility that the United States will hit the so-called fiscal cliff at the end of the year, will weigh on stocks for the balance of the year.

Maybe. The market slumped in the spring and summer of 2010 and 2011 but recovered sharply starting in September 2010 and October 2011.

In the meantime, expect a lot of volatility.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$88.14

$91.83

3.74%

-10.82%
(per barrel)











Heating oil (-HO)

$2.8206

$2.9238

4.09%

-3.21%
(per gallon)











Natural gas (-NG)

$3.1170

$3.0810

10.38%

4.28%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7638

$2.8445

5.02%

4.00%
(per gallon)











Brent crude 

$103.26

$106.83

5.58%

-3.84%
(per barrel)











Retail gasoline

$3.4710

$3.4670

3.52%

5.95%
(per gallon; AAA)












Does Spain need a major bailout?
Spanish media reported that up to six regions may seek aid from the central government after Valencia asked for funds on Friday. That request sent Spanish bonds to a euro-era high of more than 7.5%, above the 7 percent level viewed as sustainable.

How Spain's 17 indebted autonomous regions, locked out of international debt markets, refinance 36 billion euros ($43.6 billion) in debt this year has been a major source of concern for investors ever since they missed deficit targets last year.

An eighth straight Monday decline
The market's decline is its eighth straight on a Monday.

Materials and energy stocks were the weakest sectors of the market, although all 10 sectors of the S&P 500 were lower.

Only seven of the 30 Dow stocks with higher, led by JPMorgan Chase (JPM), General Electric (GE), Caterpillar and Home Depot (HD).

JPMorgan moved up 53 cents to $34.43 after CEO Jamie Dimon bought $17 million of shares last week.

Some of the early selling pressure may have resulted from margin calls, CNBC's Bob Pisani reported.

Meanwhile, just 55 S&P 500 stocks were higher, led by NRG Energy (NRG), Dean Foods (DF) and toymaker Hasbro (HAS). The laggards were JDS Uniphase (JDSU), Denbury Resources (DNR) and Harman International (HAR).

Eleven Nasdaq-100 stocks were higher, led by SanDisk (SNDK), up $1.18 to $39.88, and Monster Beverage (MNST), up $1.19 to $66.16. The laggards were Nuance Communications (NUAN) and Intuitive Surgical (ISRG).

Housing wins some fans
One bright spot in the market is home builders after Goldman Sachs analysts Joshua Pollard and Anto Savarirajan upgraded the group to "attractive" from neutral. 

Housing has a "long list of positives," including rising prices, job growth, supportive government policies and a decline in the so-called shadow inventory of homes, they said.

The analysts put MDC Holdings (MDC), parent of Richmond American Homes, on Goldman's conviction buy list. They raised KB Home (KBH) to buy from hold and Ryland (RYM) to neutral to sell. They maintained buy ratings on Toll Brothers (TOL) and Pulte Group (PHM).

MDC was up $1.79 to $33.18. KB Home added 35 cents to $10.16, Ryland rose 91 cents to $26.64. The Philadelphia Housing Sector Index ($HGX) was up 0.37 to 139.33. It's up 35% this year.

The Commerce Department will report on June new-home sales on Tuesday. The National Association of Realtors will report on pending-home sales on Thursday.

McDonald's sees consumer caution
McDonald's shares were down $2.38 to $89.20. The world's biggest hamburger chain said today that its net income fell 4% in the second quarter as a result of a strong dollar and budget-conscious consumers in economically hard-hit regions world.

Suggesting more challenges ahead, the company also said a key sales figure slowed in July.

Global revenue of $6.9 billion was flat compared with a year ago. But if there were no currency changes, sales would have been up 5%.

Cnooc (CEO), the big Chinese oil company, unveiled what would be China's biggest foreign acquisition yet, as the company on Monday said it struck a $15.1 billion blockbuster deal to acquire Canadian energy producer Nexen (NXY)

If completed, the deal would mark China's most significant move yet to secure supplies of oil and natural gas to feed its rapid growth, especially in potentially fruitful but technically complex areas such as shale gas and oil sands.

Nexen shares were up $8.87 to $25.93. Cnooc was off $7.75 to $195 in New York.

Crude oil and gold drop
Crude oil in New York fell $3.58 to $88.25 a barrel. Brent crude was off $3.33 to $103.50. The national average retail price of gasoline rose to $3.471 a gallon from Sunday's $3.467 and $3.447 on Friday, according to AAA's Daily Fuel Gauge Report.

Gold settled down $5.40 to $1,577.40 an ounce. Silver (-SI) was off 26 cents to $27.04 an ounce. Copper (-HG) dropped 6.8 cents to $3.38 a pound.

Interest rates were lower, with the 10-year Treasury yield falling to 1.435% from Friday's 1.46%.

The euro fell to $1.2114 against the dollar; it had fallen to as low as $1.20788.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0900%

0.090%

12.50%

800.00%
5-year Treasury note 

0.562%

0.580%

-22.91%

-32.29%
10-year Treasury note

1.435%

1.460%

-13.50%

-23.30%
30-year Treasury bond

2.515%

2.546%

-8.98%

-12.95%
Currencies











U.S. Dollar Index

83.815

82.980

2.52%

4.09%
British pound

1.5535

1.5613

-1.07%

-0.02%
(in U.S. $)

 








U.S. $ in pounds

£0.644

£0.640

1.08%

0.02%
Euro in dollars

$1.21

$1.21

-3.86%

-6.33%
(in U.S. $)

 








U.S. $ in euros

€ 0.824

€ 0.825

4.01%

6.76%
U.S. $ in yen 

78.55

78.46

-1.49%

1.89%
U.S. $ in Chinese

6.41

6.37

0.59%

1.33%
yuan











Canada dollar

$0.984

$0.986

0.16%

0.30%
(in U.S. $)

 








U.S. dollar 

$1.017

$1.014

-0.15%

-0.31%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,577.40

$1,582.80

-1.67%

0.68%
(per troy ounce)

 








Copper (-HG)

$3.380

$3.448

-3.33%

-1.63%
(per pound)

 








Silver (-SI)

$27.0420

$27.3020

-2.06%

-3.13%
(per troy ounce)

 








Wheat (-ZW)

$9.1275

$9.4325

20.53%

39.83%
(per bushel)

 








Corn (-ZC)

$7.8550

$7.958

23.75%

21.50%
(per bushel)

 








Cotton 

$0.7219

0.7294

1.21%

-21.26%
(per pound)

 








Coffee

$1.8510

1.8695

8.44%

-19.40%
(per pound)

 








Crude oil (-CL)

$88.14

$91.83

3.74%

-10.82%
(per barrel)










 

291Comments
Jul 23, 2012 4:44PM
avatar

Maybe, just maybe our elected officials in D.C. should read this before November:

 

In Congress, July 4, 1776

When in the course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.
That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

Jul 23, 2012 2:16PM
avatar

This is totally random but how many of you would be upset if we audited ALL state and local governments and the feds to see where all our money is going to. It would be a huge eye opener.  It would literally blur party lines and cause a sweep of ALL government officials. We're talking forcefully kicking out all the idiots we have in power now. Dems AND Reps.

Jul 23, 2012 3:24PM
avatar

Stocks slump...and they will continue to do so. We, the People, MUST clean house this November -- and I'm not talking about just the presidency. This government has colluded with banks to rape the Middle Class and reduce our country to the 'have's' and 'have not's'. Political parties are no longer relevent. BOTH parties are guilty for:

1) repealing the Glass-Steagall Act (this would have prevented the '08 meltdown);

2) Refusing to enact term limits for Congress; and

3) Refusing to enact line item vetos.

 

We will continue to see this kind of financial 'hanky panky' between the banks and DC until we collectively say "ENOUGH!" and DEMAND reform.

Jul 23, 2012 2:15PM
avatar

President Obama hasn't met with his jobs council in over six months.

You know the reason?

They're all out looking for jobs.

Jul 23, 2012 4:53PM
avatar
Minimum wage for all branches of government until our (REAL) unemployment rate is 5% or under!
Jul 23, 2012 4:11PM
avatar
I hear Obama wants to increase the debt ceiling AGAIN, because he has blew through that amount in less than a year....

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a Sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. ...Increasing America’s debt weakens us domestically and internationally. Leadership means that 'the buck stops here'. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and Grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

SENATOR BARACK HUSSEIN OBAMA, MARCH 2006


I sure hope he repeats this speech...   FAILED LEADERSHIP INDEED!

Jul 23, 2012 2:19PM
avatar

Gee Wiz! Europe didn't go away yet!!!

What did people expect to happen. With 17 different counties having to agree on a course of action it will take years (and they don't have that kind of time) to come to terms with their problems. The EU will continue in its death spiral for another 6 or 7 months until the final demise of the Euro as a currency and the European Union as an economic entity.

The dollar will continue to strengthen as the citizens of the EU scramble for a safe haven for their money. The only problem is that since the US can't seem to get its fiscal houlse in order the dollar will prove to be as in bad shape as the Euro.

Europena Socialism has failed and Obama Socialism is next.

I am not really counting on Mitt to save us due to the fact that our congress is totally disfunctional as a legislative entity. I think we are in trouble in a big way!!!

Jul 23, 2012 4:41PM
avatar
Lets see, when oil went up last week there was an immediate hike of 12 to 15 cents a gallon at the pump. Now that it has gone down some, do you think they will drop the price back down at the pump, certainly not because it does not work that way. The consumer always get the shaft when going up against Big Oil and Wall Street. Greed is ruining our country and its economy.
Jul 23, 2012 3:17PM
avatar

Gustavo Urena

 

The founding fathers formed a WEAK central government because they feared it would get too powerful and we would end up with another dictatorship.  They even stated that it was not only the right of the people to rise up to overthrow an oppressive government but it was a duty.  This clown we have leading this country (together with Holder at the DOJ) are just what they were worried about.  This govt. decides what laws they will uphold and which they will ignore.  An armed citizenry is exactly what this country must have in order to have any chance to avoid becoming another Soviet Union or North Korea.

Jul 23, 2012 1:30PM
avatar
Romney will own the economy on DAY ONE... He will not blame this potus, or the DNC or the weather in Europe... He will simply go about putting in place that will get government out of the way, and allow the business sector to breath, expand, and grow our economy again... If he can't do it, we will vote him out too.
Jul 23, 2012 3:32PM
avatar

The only reason why we have had such a successful form of government is because of the right to bear arms. Marshall law can keep us in our house for so long and for "our" protection and the rest is up to us. That's why we include enemies foreign or domestic and that's including government if they violate our freedoms and cross the line.

avatar

The Death Spiral of Lost Jobs and an ever weaker and weaker economy  is accelerating folks.

 

Time to bail out of the stock and bond markets.

 

Bernanke not to print money to keep it afloat anymore.

 

QUOTE

 

In an election year dominated by discussion of the middle class, Fritz's case highlights a dim reality for the growing group in poverty. Millions could fall through the cracks as government aid from unemployment insurance, Medicaid, welfare and food stamps diminishes.

"The issues aren't just with public benefits. We have some deep problems in the economy," said Peter Edelman, director of the Georgetown Center on Poverty, Inequality and Public Policy.

He pointed to the recent recession but also longer-term changes in the economy such as globalization, automation, outsourcing, immigration, and less unionization that have pushed median household income lower. Even after strong economic growth in the 1990s, poverty never fell below a 1973 low of 11.1 percent. That low point came after President Lyndon Johnson's war on poverty, launched in 1964, that created Medicaid, Medicare and other social welfare programs.

"I'm reluctant to say that we've gone back to where we were in the 1960s. The programs we enacted make a big difference. The problem is that the tidal wave of low-wage jobs is dragging us down and the wage problem is not going to go away anytime soon," Edelman said.

 

END QUOTE

Jul 23, 2012 4:46PM
avatar
A loss of 101 is a crawling back.... hmmm. If only my performance at work could be judged with the same measuring stick.

Would a small loss tomorrow be a rebound?

Jul 23, 2012 12:25PM
avatar

European style democratic socialism has failed. Let's not repeat the experiment here, as we already have tried the last four years.

 

Time for the real builders of prosperity to be unleashed. And those who claim American's "did'nt build that", go teach a college class somewhere.

 

Jul 23, 2012 1:28PM
avatar
market should be at 10k. And it may go to 6k if the fiscal cliff in our own country doesn't get fixed by letting the Private FED continue to print money.  They are stealing us blind. Our grandchildrens children future is now being mortgaged for Wall street profit.
Jul 23, 2012 4:24PM
avatar
Can someone please explain why oil is down nearly 11% ytd but gas is up nearly 6%?  Thanks.
Jul 23, 2012 2:17PM
avatar

TW1946....This is what this government wants ...No real choice ...!  Limited party representation ...a TWO PARTY MONOPOLY and elect shady leaders so in the end you rather have a Dictator...!! Man aren't you tired of being the Hamster in that wheel...?  I say Give me liberty or give me death...!

The time will come soon when all will gather and SAY WHAT THE F***K and Wake up....!!!

The media is on their side....defiantly not on your side because your just viewed as a donor of Funds for their good living.  When all of you realize that.......you will be taking the first step in transferring YOUR  power BACK....!!!! And No The NRA is what insures that the control stays with the people because in the end we are the last line of defense...!!! Look at what has happen through out history...!!! Look at whats happening now...!!!

Jul 23, 2012 1:25PM
avatar
Guys you have to remove yourself from all of the other issues, put them aside and concentrate on the lousy domestic economic leadership issues. The other lousy issues these guys have not dealt with is all bipartisan, divisive and are just meant to keep you worried, distracted and divided.......Remember divide and conquer....!!!!  It is weired that just last week I mentioned "do not be surprised to see lot more killings and people jumping out of buildings"...etc..and Boom.!!! This past week this massacre happened.......Now get ready to see more regulation on Gun, AMMO, Vest...and other interstate dealing and controls on Sales.....This government wants to keep a list of all those that would rather die first before seeing the constitution and its citizen rights violated. The end game is to disarm us...!!!!! 
Jul 23, 2012 2:56PM
avatar

Stocks slump on greed, manipulation and corruption. Do the American people look that stupid that they will believe the BS written day to day or hour to hour???

Just another way to steal from the working class and their retirement accounts.

Jul 23, 2012 1:14PM
avatar
Universal health care does not mean they still don't have a tiered system. The lower income people still get lower value care. In fact, people that can afford additional insurance in Germany purchase it so that they can have things like private hospital rooms... Do you think that the rich people, the political people, etc., wait in the same lines or see the same providers??? The only ardent supporters of the HC law in this country are those that are exempt from having to participate in it. Do you think obama, his family and cronies will be receiving the same care as you?
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