Dow off 125 as Europe's debt crisis slams stocks

U.S. markets sag after a weak auction of Spanish debt but see declines trimmed in late trading. Tech stocks fall on SanDisk's earnings warning. ISM's services index is weaker than expected. Oil, gold and interest rates fall.

By Charley Blaine Apr 4, 2012 1:19PM

Charley BlaineUpdated: 7:43 p.m. ET


Stocks suffered their worst one-day losses since at least early
March after a very weak auction of Spanish bonds battered European stocks and reminded investors around the world that Europe's debt crisis is far from over.

The sell-off was also part of a continuation of Wall Street's concern about what markets would look like if the Federal Reserve holds back on more stimulus for the economy. But there was some good news for investors: Losses were trimmed substantially in the afternoon.


The selling came despite decent reports on private-sector job growth and on the services economy. The drubbing was exacerbated by a slump in technology stocks after flash-memory maker SanDisk (SNDK) warned that fiscal-first-quarter results would be weaker than expected. SanDisk was off $5.54 to $44.51. Apple (AAPL), which has been a SanDisk customer, closed down $5.01 to $624.31 after falling to as low as $617.


The European worries sent many investors looking for safety, which meant money flowed into U.S. markets. That pushed the dollar higher. Gold (-GC), crude oil (-CL) and interest rates were lower.

The Dow Jones industrials ($INDU) closed down 125 points to 13,075; the blue chips had been down as many as 179 points. The Standard & Poor's 500 Index ($INX) dropped 14 points to 1,399, and the Nasdaq Composite Index ($COMPX) fell 45 points to 3,068.


Article continues below. 

The Dow and S&P suffered their biggest declines since March 6 when they fell 204 and 21 points, respectively. The Nasdaq's loss was its biggest since Dec. 8, when it fell 53 points.

However, bulls were able to keep the S&P 500 above 1,395, its 20-day moving average and an important support level.

The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 38 points to 2,745. Apple contributed about 4 points to the index's loss. Microsoft (MSFT), down 73 cents to $31.21, contributed more than 5 points to the loss. (Microsoft is the publisher of MSN Money.) 

To be sure, the U.S. market had been poised for a fall, particularly the Nasdaq and Nasdaq-100 indexes. Both were pushed higher by Apple's 55% gain for the year  through Tuesday when it closed at a record $629.32 after hitting an all-time high of $632.21.

The year has been remarkably stable. The Dow has lost 100 points or more just twice in 2012. By this time a year ago, it had sustained seven losses of 100 points or more.


Ahead on Thursday

Major retail chains will report March sales on Thursday. In addition, outplacement firm Challenger Gray Christmas will report on mass layoffs in March. The Labor Department's weekly report on jobless claims comes out. 


Earnings are due from used-car dealer Carmax (KMX), Constellation Brands (STZ), Pier 1 Imports (PIR) and WD-40 (WDFC).


Futures trading suggests a flat open on Thursday, which will be the last day of trading this week. The stock market is closed Friday for Good Friday. Bond trading stops at noon.


Investors love Bed Bath & Beyond results; jeer results from Ruby Tuesday

After the close, shares of Bed Bath & Beyond (BBBY) were up 5% to $69.50 after fiscal-fourth-quarter results easily beat estimates. Revenue of $2.79 billion was up 9.1% from a year ago. Earnings per share of $1.48 were up 32% from a year ago. Same-store sales were up 5.9% from a year ago. In fiscal 2011, same-store sales grew 7.8%.


The company is projecting earnings of 79 cents to 83 cents a share; analysts are looking for 82 cents a share.


Meanwhile, shares of Ruby Tuesday's (RT) were off nearly 12% after hours to $7.89. Results were hurt by a 5% decline in same-store sales and a 6.4% decline in operating expenses. The company forecast earnings after one-charges of 43 cents to 48 cents; analysts have been expecting 56 cents.


Crude oil drops below $102
Crude oil settled down $2.54 to $101.47 a barrel in New York after the Energy Department reported an increase of some 9 million barrels in domestic inventories, much larger than expected. Brent crude settled down $2.52 to $122.34 a barrel.

The retail price of gasoline averaged $3.928, up slightly from Tuesday, AAA's Daily Fuel Gauge Report said.

The price decline hit energy shares. Exxon Mobil (XOM) dropped 85 cents to $84.98. Chevron (CVX) fell $1.54 to $105.60. The Energy Select Sector SPDR (XLE) exchange-traded fund fell 92 cents to $70.90.

Gold settled down $57.90 to $1,614.10 an ounce, its biggest one-day decline since Feb. 29, when it fell $77.10, and its lowest price since Jan. 4. Silver (-SI) dropped $2.221 to $31.04 an ounce, a 6.7% decline and its largest decline in five weeks. Copper (-HG) settled down 12.85 cents to $3.7905 a pound.


The metals decline was mostly seen as a reaction to the suggestion in Federal Reserve minutes that the Fed isn't likely to add stimulus to economy without a seriously faltering economy.


Freeport-McMoRan Copper & Gold (FCX) was off 55 cents to $38.03. Newmont Mining (NEM) dropped $1.81 to $48.53. U.S. Steel (X) fell 98 cents to $28.70. Alcoa (AA), which reports first-quarter earnings on Tuesday, fell 25 cents to $9.81.


Interest rates were lower, with the 10-year Treasury yield falling to 2.239% from 2.284% on Tuesday.


Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$101.47

$104.01

-1.50%

2.67%
(per barrel)











Heating oil (-HO)

$3.1609

$3.2275

-0.29%

8.47%
(per gallon)











Natural gas (-NG)

$2.1410

$2.1870

0.71%

-28.37%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.3336

$3.3954

0.77%

25.45%
(per gallon)











Brent crude 

$122.34

$124.86

-0.44%

13.93%
(per barrel)











Retail gasoline

$3.9280

$3.9230

0.08%

19.90%
(per gallon; AAA)












Why Spain hurt Europe
The auction of Spanish government debt was a big disappointment. The government sold just 2.589 billion euros ($3.43 billion) worth of bonds, at the bottom of its planned range of 3.5 billion euros, and at yields that were well above previous auctions. Most of the debt was bought by Spanish banks.

Following the auction, yields on 10-year Spanish government debt rose to 5.669%, from 5.445% Tuesday, the highest level since Jan. 9.

The auction is a first verdict on the new government's just-announced budget plan, which calls for severe spending cuts and tax increases to trim a persistent deficit, The Wall Street Journal said.

Many economists have warned that deep austerity -- European policy makers' favored weapon against the debt crisis -- could plunge weak economies into deep contraction. Spain is struggling with 23% unemployment. The government forecasts its economy will shrink 1.7% this year.

Non-manufacturing industries grew in March
Service industries in the U.S. grew in March, capping the strongest quarter in a year and indicating the world’s largest economy will keep generating jobs.

The Institute for Supply Management’s non-manufacturing index fell to 56 from a one-year high of 57.3 in February. Last month’s reading still topped the average for the previous economic expansion. The dip was not expected; most economists had predicted a small gain.

Since mid-2011, the industries that account for almost 90% of the economy have outpaced gains in manufacturing, which had been at the forefront of the two-year expansion.

"No longer can we say that only manufacturing is powering the economy forward," Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, told Bloomberg News. "The general trend is very encouraging."

ADP says businesses added 209,000 jobs in March
Businesses added more than 200,000 jobs in March, giving fresh evidence of continued improvement in the labor market, according to the ADP National Employment Report.

The report was in line with expectations. 

Analysts said it did not change their forecasts for the government's more comprehensive labor market report for March due on Friday, which includes both public- and private-sector employment. The Labor Department is expected to show nonfarm payrolls gaining 200,000 jobs with the unemployment rate holding at 8.3%.


Best Buy shares face a downgrade

Best Buy (BBY) shares were down 60 cents to $22.95 after Standard & Poor's placed the company's BBB- rating on a credit watch with negative implications. That means a downgrade to junk status is possible.


The issue: Best Buy's business model isn't working, S&P said today, and the retailer has shown little progress to improve its performance. The ratings agency will meet with company management before issuing a final determination on a downgrade.


P&G leads the Dow; Yahoo slides on layoff news

Only four of the 30 Dow stocks were higher -- Merck (MRK), AT&T (T), Procter & Gamble (PG) and Caterpillar (CAT).


In addition, about 50 S&P 500 stocks and just six Nasdaq-100 stocks, led by Priceline.com (PCLN),Yahoo (YHOO) and Expeditors International (EPXD).


American International Group (AIG), Avon Products (AVP), the target of a takeover bid, and apparel retailer Gap (GPS) were the S&P 500 leaders. SanDisk was the laggard as well as the biggest loser among Nasdaq-100 stocks.


Yahoo (YHOO), which announced it's laying off 2,000 workers, was up 9 cents to $15.27.


Financial stocks were the market's weakest sector.


JPMorgan Chase (JPM) was down $1.01 to $44.41. The Commodity Futures Trading Commission said the company will pay $20 million to settle charges that it unlawfully handled customer segregated funds at Lehman Brothers.


Citigroup (C) was down $1.33 to $35.04. Bank of America (BAC) dropped 29 cents to $9.20 and was the weakest Dow component.


Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0700%  0.070%

0.00%  600.00%
5-year Treasury note 

1.050%  1.105%

0.67%  26.51%
10-year Treasury note

2.243%  2.284%

1.22%  19.88%
30-year Treasury bond

3.380%  3.410%

1.05%  17.00%
Currencies











U.S. Dollar Index

79.949  79.641  1.02%  -0.71%
British pound

1.5896  1.5918  -0.71%  2.30%
(in U.S. $)

          
U.S. $ in pounds

£0.629  £0.628  0.72%  -2.25%
Euro in dollars

$1.31  $1.32  -1.47%  1.47%
(in U.S. $)

          
U.S. $ in euros

€ 0.761  € 0.755  1.49%  -1.45%
U.S. $ in yen 

82.58  82.81  -0.50%   7.10%
U.S. $ in Chinese

6.32  6.30  -0.04%  -0.13%
yuan

            
Canada dollar

$0.000  $1.010  -100.00%  -100.00%
(in U.S. $)

          
U.S. dollar 

$0.996  $0.990  -0.21%  -2.33%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,614.10

$1,672.00

-3.46%

3.02%
(per troy ounce)











Copper (-HG)

$3.791

$3.919

-0.90%

10.32%
(per pound)











Silver (-SI)

$31.0440

$33.2650

-4.43%

11.21%
(per troy ounce)











Wheat (-ZW)

$6.3925

$6.5800

-3.25%

-2.07%
(per bushel)











Corn (-ZC)

$6.5675

$6.583

1.98%

1.59%
(per bushel)











Cotton 

$0.8926

0.927

-4.96%

-2.64%
(per pound)











Coffee

$1.8735

1.8805

1.27%

-18.42%
(per pound)











Crude oil (-CL)

$101.47

$104.01

-1.50%

2.67%
(per barrel)










 
94Comments
Apr 4, 2012 2:15PM
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Quoted text:

Crude oil fell $2.49 to $101.52 a barrel in New York after the Energy Department reported an increase of some 9 million barrels in domestic inventories, much larger than expected.

 

Well with gas prices hovering close to $4.00 a gallon people are driving less because they are going broke filling up the gas tank.  These prices are killing the average family & since gas costs more people are spending & driving less which also hurts other sectors of the Economy.  Here is a wake up call to Washington:  "Get a grip on the Wall Street Speculators who are falsely manipulating the Barrel price to their gain & screwing everyone else".

Apr 4, 2012 1:28PM
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Stock's are not holding any gains period. The entire U.S. Policy is crippling average investor. The Economy is not stronger nor is it rebounding.
Apr 4, 2012 3:30PM
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Make the Speculators take physical delivery of all of the millions of futures that they are buying and never see so they will have to pay storage fees, etc. and than see how many million they buy ahead. These people control 80% of all oil futures trading. Big Companies like Goldman Sachs are getting rich off the poor and working people in this country while the average Joe is paying up the **** for gas and food.
Apr 4, 2012 2:27PM
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Crude oil fell $2.49 to $101.52 a barrel in New York after the Energy Department reported an increase of some 9 million barrels in domestic inventories, much larger than expected. Brent crude was off $1.84 to $123.02.
I still don't understand how gas continues to rise. I thought gas prices followed crude and brent prices? I thought gas prices followed supply and demand? That just shows you how we get lied to so others can take our money. Well as you can see we are out of money!!!!
Apr 4, 2012 3:05PM
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and our President wants America to be more like Europe. Great idea.
Apr 4, 2012 2:47PM
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Don't worry - Uncle Ben has their backs and will not let the market deflate before the election. All dips will be softened by the Fed and all rises will be buffered by the Fed. It's not the stock market anymore, it's the Fed market.
Apr 4, 2012 2:06PM
avatar
dont worry, watch what happens. oil, gold and all will tumble so that the greedy bastherds can buy low and by week end oil and gold will rally and they will make money billions again this week!! all at the cost of us....
Apr 4, 2012 4:59PM
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Don't worry about the markets, old Bendover has already inked up the presses for June.  He's backed himself into a corner with all the stimulus keeping the market up but now he has no choice.  If the markets drop during an election year along with the rising unemployment rate and high gas prices his tenure as Fed chairman is over.  He was appointed by Bush and Obama then confirmed by the Senate.  If Obama loses the election the new POTUS will nominate a new Fed chairman.  What's worse under a new POTUS we will have new DOJ, SEC and other major heads that will begin looking at criminal activity by Bendover and others.

 

The markets HAVE to stay up in order to keep the Banks and Wall Street funneling donations to the Obama campaign like they did in 2008.  Some of the largest contributors to the Dem PACS were from those entities. The financials knew they could have free reign with Obummer in office. High gas prices will be blamed on the oil companies and the high unemployment will be twisted and manipulated to show far less than reality. Keep the market up and the sheeple will be convinced that all is right with the world.

 

What we are witnessing in this point in history is the largest Ponzi scheme ever created. This administration fooled the American voter with the help of a complicant liberal news media and screams of racism any time Obama's qualifications were questioned.  This country is at the financial cliff and the folks who claimed to have "pulled the car out of the ditch" are driving staight into the abyss with stupid grins on their faces.

Apr 4, 2012 3:23PM
avatar
What a moron who wrote this.  "Slammed" stocks.  The market is down less than 1%.  The media lacks any real knowledge about the market so they try to sensationalize everyday because they cannot write reasonably intelligent articles.  Oh my gosh, this is the worst 1 day loss since-30 days ago.  WOW, this is certainly historic in nature.  Give me a break. 
Apr 4, 2012 3:49PM
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Notice how with this author; stocks drop, and it's the old stand by of Eurpean debt stories, while totally ignoring the US sovergn debt, the legislature that can't seem to pass anything more then temporary budget extensions; and oh yeah Wall Street got all pissy yesterday that the Federal Reserve told them no to QEC 3.  Like an addict, they miss their fix to easy printed Fed funny money....
Apr 4, 2012 4:42PM
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This is one of those cut and paste articles.  We have seen this article before, except now it is Spain's turn to take the blame. Hot

Apr 4, 2012 3:13PM
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CRUDE OIL FELL $2.49 TO  $101.72 BUT AFTER  THE ENERGY DEPT REPORTED  AN INCREASE OF SOME 9 MILLION BARRELS IN DOMESTIC INVENTORIES , MUCH LARGER THAN EXPECTED.HOWEVER THE RETAIL PRICE OF GASOLINE WAS UP SLIGHTLY FROM TUESDAY. WHAT YOU HAVE HERE IS A MULTI AGENCY CONTROLLED EXTORTION OF THE AMERICAN PEOPLE. IF THE SPECULATORS DONT ARTIFICIALLY INFLATE THE GASOLINE PRICE THROUGH THEIR PRICE FIXING ON OIL, THE GAS RETAILERS WILL KEEP THE PRICE UP FOR THEIR OWN PURPOSEFUL GOUGING. ALL SCUMBAGS, BUT SCUMBAGS THAT ARE PERMITTED BY THE POWERS THAT ARE, TO DO WHATEVER  IT TAKES TO LINE THEIR POCKETS.
Apr 4, 2012 2:45PM
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Don't like those greedy corporations making all that money? Turn everything over to the government. They have done such a great job of everything they handled in the past I'm sure they will straighten everything out in short order.
Apr 4, 2012 5:12PM
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"Make the Speculators take physical delivery of all of the millions of futures that they are buying and never see so they will have to pay storage fees, etc. and than see how many million they buy ahead. These people control 80% of all oil futures trading. Big Companies "
 
Brent.... It's wishful thinking that oil traders will voluntarily disengage from avaricious speculations in futures. They have always enjoyed some benefits unavailable to other traders because of that thin line of demarcation between trading and manipulation. Not only don't they have to take delivery but their margin requirements are lower. The commodities market is a feast or famine operation and most CTC commissioners are  former traders because only they have the experience to police this complex aberration.
Supply and Demand constraints have virtually no impact on oil .As you have seen lower consumer consumption or increased supply by OPEC have little , if any impact on prices. The solution lies in a complete restructuring of the commodity market by the SEC to put them on a level trading like all other traders.
Apr 4, 2012 4:19PM
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I bet Obama blames Bush on this one too.......

Apr 4, 2012 3:23PM
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These posts are a joke! Don't people understand that these articles are false and what they want you to believe? Our country is in a real mess/disaster. They are using your money!
Apr 4, 2012 3:10PM
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Just once I would like to see a headline like "Excessive Corporate Greed Slams Markets" or "The 1% Is Tanking Your Future", or "Greedy Oil Speculation Has Gas Prices Skyrocketing".

 

A little truth every so often wouldn't hurt anyone, would it ?

Apr 4, 2012 3:02PM
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"That worst-case scenario where the economy would completely fall off a cliff and do a 'Thelma and Louise' is not happening," he added.

If ga**** the $5 a gallon mark some are predicting? Just watch. Thelma and Louise won't be a speed bump compared to the freefall from that.
Even at $4 a gallon most aren't making it.

edited to say missed space bar between gas  and  hits. MSN didn't like it very much. Smile
Apr 4, 2012 5:05PM
avatar
I remember when you invested in the market for the long term.  You invested and forgot about it.  I felt like i was in charge and controlled the market. Now I feel like the market controls me.  It was you rarely heard about the market and now its the daily topic.  Humm I wonder why that is?
Apr 4, 2012 2:14PM
avatar
just heard that all street is hopimg for a weak economic report on friday reason? so they ill have a better chance at qe3 $ so they can steal taxpayers cash and put it in their pockets invest in foreign markets and economies speculate on oil and impose further hardship on the struggling masses.hell no! if there is further stimulus focus on industrial production  have safe guards that forbid offshore  investing or further development in foreign industries. the money stays here. help struggling companies that have ability to recover. no money for money handlers who produce nothing!
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