Stocks suffer worst weekly loss since May
The Dow ends up slightly; the Nasdaq and S&P 500 slip. Wells Fargo and JPMorgan earnings beat estimates, but margins are squeezed. Apple moves higher. Google falls on antitrust worries. Oil and gold fall.
Stocks struggled for most of the day just to end flat after giving up an early rally. In the process, the major indexes suffered their worst weekly losses since the very end of May.
The early rally fizzled despite rising consumer confidence, and earnings beats from banking giants JPMorgan Chase (JPM) and Wells Fargo (WFC). But shares of both companies fell because of worries that profit margins were shrinking.
The Dow Jones industrials ($INDU) gave up all of an early 75-point gain by noon ET. But, in finishing with a tiny gain, they broke a four-day losing streak. The Nasdaq Composite Index ($COMPX) was lower for the sixth straight day. The Standard & Poor's 500 Index ($INX) was lower for the fifth time in the last six days.
The market's desultory performance came as the first week of earnings season ended. Next week, Wall Street faces a much bigger set of results, including reports from Citigroup (C), Bank of America (BAC), Goldman Sachs (GS), Coca-Cola (KO), IBM (IBM), Microsoft (MSFT, publisher of MSN Money) and McDonald's (MCD).
The Dow finished up 2 points to 13,329. The S&P 500 was off 4 points to 1,429, and the Nasdaq slipped 5 points to 3,044. However, the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 1 point to 2,720, and the Dow Jones Transportation Average ($DJT), regarded as a leading economic indicator, was up 44 points to 5,045.
Article continues below.Europe also was a factor today. Rallies in most European markets faded at their close as concern about when Spain will apply for a financial rescue grew.
The Dow fell 2.1% for the week, with the S&P 500 down 2.2% and the Nasdaq down 2.9%, their worst weekly performance since the week of May 28-June 1. For the year, the Dow is up 9.1%, with the S&P 500 up 13.6% and the Nasdaq up 16.9%.
Crude slides; gold also drops
Crude oil (-CL) in New York settled down 21 cents to $91.86 a barrel and was up 2.2% for the week. Brent crude in London was off $1.09 to $114.62 a barrel and was up 2.3% for the week.
The national average retail price of gasoline was at $3.81 a gallon, down from $3.813 a gallon Thursday, according to AAA's Daily Fuel Gauge Report. It was off slightly on the week.
Gold (-GC) settled down $10.90 to $1,761.50 an ounce. For the week, the metal was down 1.2%, its worst weekly performance since the week ended July 6. Silver (-SI) was off 41.3 cents to $33.669 an ounce. It was off 2.6% for the week -- its biggest decline since the week ended June 22. Copper (-HG) was off 4.85 cents to $3.703 a pound.
The 10-year Treasury yield fell to 1.663% from Thursday's 1.675% and 1.73% a week ago.
|Markets for the week|
|10/12/2012||10/5/2012||% chg.||YTD chg.|
|U.S. Dollar Index||79.74||79.43||0.39%||-0.97%|
Apple provides a boost
The Nasdaq-100 was helped in part by Apple (AAPL). The tech giant closed up $1.61 to $629.71.
The shares had fallen below $630 on Thursday for the first time since Aug. 10 and ended the day down 10.5% from their closing peak of $702.10 on Sept. 19. A decline of 10% or more is a popular definition for a correction.
Apple is expected to introduce its new mini-tablet on Oct. 23.
Google may face antitrust charges
But Google (GOOG) was off $6.73 to to $744.75 on a Reuters report that the Federal Trade Commission is nearing a decision to start an antitrust suit against the search giant.
Four of the FTC commissioners have become convinced after more than a year of investigation that Google illegally used its dominance of the search market to hurt its rivals, while one commissioner is skeptical, three sources told Reuters.
Google rivals specializing in travel, shopping and entertainment have accused the world's top search engine of unfairly giving their websites low quality rankings in search results to steer Internet users away from their sites and toward Google products that provide similar services.
Housing is strong for JPMorgan, Wells Fargo; profit margins a concern
JPMorgan Chase and Wells Fargo, two of the nation's largest mortgage lenders, offered relatively optimistic views of the housing market. Demand for loans is increasing, especially for refinancings. But executives also said home buying is gaining strength.
At the same time, the number of problem loans is decreasing, allowing the banks to trim their loan-loss reserves. That, in turn, boosted profit.
JPMorgan’s third quarter exceeded estimates on higher mortgage revenue. Perhaps as important, the company began to put its "London Whale" trading losses behind. Shares were down 48 cents to $41.62.
But Wells Fargo disappointed with a shrinking net interest margin -- the profit margin from lending. It was 3.66%, down from 3.91% in the second quarter. Shares were down 93 cents to $34.25.
|Energy prices -- New York close|
|Fri.||Thur.||Month chg.||YTD chg.|
|Crude oil (-CL)||$91.86||$92.07||-0.36%||-7.05%|
|Heating oil (-HO)||$3.2239||$3.2571||2.05%||10.63%|
|Natural gas (-NG)||$3.6110||$3.6040||8.77%||20.81%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.8928||$2.9556||-0.93%||8.86%|
|(per gallon; AAA)|
A bullish reading on consumers; higher gasoline weighs on wholesale prices
U.S. consumer sentiment unexpectedly rose to its highest level in five years in October in the latest in a string of encouraging signs for the economy that may boost President Obama's re-election hopes as voters go to the polls next month.
The Thomson Reuters/University of Michigan's preliminary October reading on the overall index on consumer sentiment came in at 83.1, up from 78.3 the month before, and the highest since September 2007.
The Labor Department said Friday that wholesale prices rose 1.1% in September. But most of the gain was from higher gasoline prices. Core prices, which don't count food and energy, were unchanged.
Financials weigh on the markets
Not surprisingly with lower prices for JPMorgan and Wells Fargo, financial stocks were the market's weakest sector.
Only 11 of the 30 Dow stocks were higher today, led by Boeing (BA), Hewlett-Packard (HPQ), Wal-Mart Stores (WMT) and IBM (IBM). IBM's gain of $2.04 to $207.80 contributed 16 points to the Dow and was a big reason the average ended higher. IBM reports third-quarter results after Tuesday's close.
The laggards were Bank of America (BAC), which reports on Wednesday, followed by AT&T (T) and Verizon Communications (VZ).
Meanwhile, 119 S&P 500 stocks were higher, led by Monster Beverage (MNST) and used-car dealer Carmax (KMX). The laggards were Advanced Micro Devices (AMD), which issued an earnings warning late Thursday, and Dollar Tree (DLTR).
Monster Beverage, Dell (DELL) and Electronic Arts (EA) were the Nasdaq-100 leaders. Infosys (INFY) and Vertex Pharmaceuticals (VRTX) were the laggards. Only 37 stocks in the index had gains.
|Short hits from the markets -- New York close|
|Fri.||Thur.||Month chg.||YTD chg.|
|13-week Treasury bill||0.1000%||0.100%||11.11%||900.00%|
|5-year Treasury note||0.663%||0.663%||5.24%||-20.12%|
|10-year Treasury note||1.663%||1.675%||1.59%||-11.12%|
|30-year Treasury bond||2.835%||2.855%||-6.50%||-1.87%|
|U.S. Dollar Index||79.74||79.860||-0.36%||-0.97%|
|(in U.S. $)|
|U.S. $ in pounds||£0.622||£0.623||0.50%||-3.37%|
|Euro in dollars||$1.30||$1.29||0.80%||0.00%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.772||€ 0.773||-0.80%||0.00%|
|U.S. $ in yen||78.55||78.40||0.75%||1.89%|
|U.S. $ in Chinese||6.29||6.28||0.09%||-0.62%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$91.86||$92.070||-0.36%||-7.05%|
10:27 p.m. EDT
Biden attacks Ryan's budgets with a series of lies about the programs and funding that will be cut, as well as tax cuts that he proposes. Ryan points out that his budget does not actually cut government spending, but slows the rate of growth to 3%. He adds that not raising taxes is not the same thing as cutting taxes. Biden uses the line about voting for wars that were not paid for--and Ryan points out, amidst the crosstalk, that Biden voted for those wars.
10:29 p.m. EDT
Biden has complained--for the third or fourth time--that he is not receiving as much time to speak as Ryan. In fact, as CNN's debate clock shows, Biden has had more time--over a minute more, in fact, and he has never had less time than Ryan throughout the debate.
10:34 p.m. EDT
Biden has, once again, lied through a debate--and he has also managed to smirk through it, betraying a contempt for his opponent that is almost disqualifying and that managed to outrage even friendly media.
10:50 p.m. EDT
The media commentary is focusing on two major Biden lies: one, that the Obama administration was never asked for more security in Benghazi (it was, as we now know from testimony to Congress this week); and two, that Obamacare's cuts to Medicare do not cut benefits (they do, as Ryan pointed out in his response).
We were told that Biden was an expert on foreign affairs.
Now it looks like he just watches Bill Clinton when he goes out of the country…
Want to fix the economy and state of the union? Make ALL congress/senate/everyone have the same medicare, SS and pensions.
Make them have term limits,6yr,8yr whatever. Don't give me the vote crap. We all know it is impossible to get rid of the leaches once they are in. Make them leave. Ban ALL politicians from serving as lobbiests after their terms are over.
You'll se change, in a hurry.
New York Post - October 11th, 2012
Eric Nordstrom, the State Department’s regional security officer for Libya, twice sought to enhance security for US missions there in the wake of cutbacks in the months before the 9/11 attack.
But Nordstrom says his requests were ignored by Washington “because there would be too much political cost.”
Instead, he was given a “danger pay” hike when 16 US soldiers from a Site Security Team and 18 members of three Mobile Security Deployments were yanked.
Clearly, the hazardous-duty pay means the State Department recognized the increasing risks in Libya.
Yet State Department official Charlene Lamb — who refused the manpower requests — testified yesterday that “we had the correct number of assets in Benghazi on the night of 9/11.”
That’s self-evidently false — to say nothing of insane — but it also telegraphs the administration’s cluelessness about the region.
After the 16 soldiers were removed, “there was a complete and total lack of planning for what was going to happen next,” Nordstrom said. “There was no plan, there was just hope that everything would get better.” It didn’t.
The Benghazi mission was sacked, four Americans — including Ambassador Chris Stevens — were murdered and the White House sought to cover things up by calling the well-coordinated strike an “impromptu” protest against an obscure online video.
Bank of America claims death of a child not a HARDSHIP ? Surviving parents request a loan modification and are denied by B/A. Bank subsequently starts foreclosure proceeding ? This is a Bank that you want to do business with ! DIE BANK OF AMERICA DIE !
The White House’s attention has been elsewhere: Eager to proclaim victory in the War on Terror, President Obama spent a year celebrating Osama bin Laden’s death at the hands of Navy SEALs — claiming that al Qaeda was “devastated,” “decimated” and “on its heels.”
That’s not true in Iraq, where the number of al Qaeda fighters has more than doubled, from 1,000 to 2,500, since Obama withdrew US forces last year — and where there are now 20 al Qaeda attacks every single day.
And it’s not true in Libya, where Lt. Col. Andrew Wood, the former commander of the State Department Site Security Team there, told Congress al Qaeda is on the rise.
“Their presence grows there every day. They are certainly more established there than we are,” Wood said yesterday.
Of course they are.
Just as all but the sunniest optimists said they would be as the administration’s “leadership from behind” fell quickly to pieces after Moammar Khadafy’s inglorious fall.
Osama may be dead.
But al Qaeda is very much alive.
Another Barack Obama failure.
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[BRIEFING.COM] S&P futures vs fair value: -5.80. Nasdaq futures vs fair value: -12.80. U.S. equity futures trade modestly lower amid cautious action overseas. The S&P 500 futures hover six points below fair value after climbing off their overnight lows reached during the Asian session. The night has been very quiet on the economic front with several central bank and government officials playing down expectations of additional stimulus. On that note, China's Finance Minister Lou Jiwei ... More
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