Dow slips, but stocks mostly end higher

The blue chips fall 13, but the S&P 500 pushes ahead at the close. Europe, large oil supplies and slumping natural gas keep markets in check. Lennar sees a 20% gain in orders; shares rise 7%. Crocs shares jump on a bullish sales estimate.

By Charley Blaine Jan 11, 2012 2:28PM
Charley BlaineUpdated: 8:23 p.m. ET

Stocks finished mostly higher today as bank shares continued their big rally and homebuilding stocks jumped on a relatively bullish report on new orders from Lennar (LEN).

While the Dow Jones Industrial Average ($INDU) finished lower, 15 of the Dow 30 stocks were higher, and a majority of stocks in the Standard & Poor's 500 ($INX) and Nasdaq Composite ($COMPX) indexes  were higher.

What kept the market from stronger gains was weakness in energy shares fueled by sharply lower natural gas (-NG) prices and worries about economic weakness in Europe. Tech stocks were mostly higher; Apple (AAPL), down 69 cents to $422.55, was an exception.

Meanwhile, bank stocks were higher. Bank of America (BAC) was up 24 cents to $6.87; its gain in seven sessions: 23.6%. Plastic clogs maker Crocs (CROX) was sharply higher because fourth-quarter revenue looks stronger.

The Dow closed down 13 points to 12,449. The S&P 500 was up slightly at 1,292. The Nasdaq Composite Index ($COMPX) added 8 points to 2,711, while the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, gained 5 points to 2,372.

Article continues below.
The market had little reaction to the Federal Reserve's Beige Book report on the economy. Compiled by staffs at the 12 Federal Reserve banks, the report says the economy grew at "a modest to moderate pace" from the end of November through Dec. 30.

Holiday retail sales were up "noticeably" in most districts, the report said. Bank lending edged up, manufacturing continued a steady expansion, and wage and inflation pressures were very limited. Real-estate activity, however, remained steady at low levels.

The European worries surfaced when the Continent's economy shrank in the fourth quarter. The European Union said growth in the third quarter was only 0.1%, compared with an earlier estimate of 0.2%. That hurt stocks with big non-U.S. businesses, like Caterpillar (CAT), Coca-Cola (KO), 3M (MMM) and Walt Disney (DIS).

After the close, Dow component Chevron (CVX) warned that it expects its fourth-quarter earnings to be "significantly below" third-quarter levels. Its downstream refining and market business only broke even because of lower prices and lower inputs of crude oil. Year-earlier results also had been boosted by an asset sale. Shares fell 1.9% to $105.70 after hours. The oil giant reports its results on Jan. 27. Chevron dropped $1.29 to $107.77 in regular trading.

Also, Regions Financial (RF) said it has agreed to sell its Morgan Keegan brokerage business to Raymond James Financial (RJF) for $930 million. Shares of both were off slightly after hours.

Big 5 Sports (BGFV) shares fell 7.1% to $8.80 after hours after warning that fourth-quarter revenue will be flat from a year at $226.7 million. Earnings will be 2 cents to 5 cents. The Street has been looking for $232.2 million in revenue and earnings of 20 cents. The company blamed warm weather and the costs of heavy promotions. Big 5 had closed down 49 cents to $9.47 in regular trading.

Thursday brings the weekly report on initial jobless claims and a report on natural gas inventories. Earnings are due from Infosys (INFI) and Essex Property Trust (ESS). 

Stocks are expected to open slightly lower on Thursday.

The S&P 500 still flirts with its October high
The S&P 500 was down for most of the day but pushed ahead in the last half-hour of trading, despite weakness in energy stocks. Hitting 1,300, a level last seen in July, looks achievable.

The index finished Tuesday at 1,292.08, just about at the Oct. 27, 2011, intraday high of 1,292.66, which was the index's peak after bottoming in early October. Today's close was 1,292.48, a little closer to that October high.

The closes today and Tuesday were above the index's closing high in October of 1,285.09. So, the technicals are looking fairly strong.

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$100.87

$102.24

2.06%

2.06%
(per barrel)











Heating oil (-HO)

$3.0646

$3.1014

5.16%

5.16%
(per gallon)











Natural gas (-NG)

$2.7740

$2.9410

-7.19%

-7.19%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7633

$2.7728

3.99%

3.99%
(per gallon)











Brent crude 

$112.24

$113.28

4.53%

4.53%
(per barrel)











Retail gasoline

$3.3720

$3.3720

3.15%

3.15%
(per gallon; AAA)












Oil and natural gas see pressures
Crude oil
(-CL) settled off $1.37 to $100.87 a barrel in New York. Brent crude was off 72 cents to $112.56 a barrel.

But domestic supplies were much larger than expected, according to an Energy Department report. So there was pressure on energy shares. Exxon Mobil (XOM) was off 64 cents to $85.08. Schlumberger (SLB) was down 59 cents to $70.16.

Natural gas (-NG) settled at $2.774 per million British thermal units, down 16.7 cents or 5.7%.

The price is the lowest for a January since 2003, although gas fell below $2 per million BTU in September 2009. (An earlier version of the post said the price was an eight-month low.)

Prices have fallen because of warmer weather in the East and huge amounts of gas in storage -- 11.4% more than a year ago, according to Cameron Hanover, an energy consulting firm.

Gold (-GC), meanwhile, settled up $8.10 to $1,639.70 an ounce on the European worries. Silver (-SI) added 7.5 cents to $29.89 an ounce. Copper (-HG) was up 3.3 cents to $3.546 a pound.

The euro (EURUSD) briefly fell below $1.27 today but was trading at $1.2705 this afternoon. Because of the dollar's gains, the 10-year Treasury yield was down to 1.904% from Tuesday's 1.972%.

Lennar boosts housing sectors
There's a big debate on whether the housing market has bottomed. Lennar's earnings report suggested maybe it has. Which is why the stock moved up $1.49 to $22.25, a gain of 7.2%.

The earnings weren't the driver for the price gain. The company earned 16 cents a share, down a penny from a year ago and a penny lower than the estimate. But the revenue was up 11% in the quarter to $952.7 million, and new orders were up 20% from a year ago.

That's what got the market's attention. The company suggested that lower prices and lower interest rates are offsetting higher rents in the rental markets.

Homebuilding shares surged. PulteGroup (PHM) was up 36 cents to $7.70. D.R. Horton (DHI) added 65 cents to $14.13. The Philadelphia Housing Sector Index ($HGX) was up 3.43 to $114.06. The index is up 10.8% this month after falling 5% in 2011.

"Each of the company’s operating segments was profitable despite challenging housing-market conditions, and its homebuilding operations performed slightly ahead of our expectations," Vincent Foley, senior research analyst with Barclays Capital in New York, said in a note to investors.

U.S. housing starts climbed to a 19-month high, and builder confidence rose for the third consecutive month in November. While there are signs that the market may be starting to improve,  Bloomberg News noted that new homes sold at an annual pace of 315,000 in November, putting 2011 on pace to be the slowest year for new-home sales since the government began tracking sales in 1963.

The Commerce Department reports new-home sales for December on Jan. 26. The National Association of Realtors reports existing-home sales on Jan. 20.

Hecla's Lucky Friday ordered shut down
Shares of silver producer Hecla Mining (HL) fell $1.23 to $4.61 after federal authorities ordered its Lucky Friday mine in Wallace, Id., shut following an investigation prompted by a series of accidents that killed two miners over the last year.

The Lucky Friday is one of the nation's deepest. It will be closed for a year after inspectors from the Mine Safety and Health Administration determined that sand and concrete material that had piled up over the years needed to be removed. The material is in the mile-deep Silver Shaft, the mine's main access shaft.

It wasn't clear how the 275 workers who usually work in the mine will be affected.

The mine has been shuttered since mid-December when rock burst injured seven miners. Hecla said production was expected to begin again in early 2013.

Leaders and laggards
MetLife (MET) said late Tuesday it is exiting the residential mortgage business. MetLife said it expects $90 million to $110 million in costs over the next year. Shares rose $1.24 to $35.79.

Specialty retailer Urban Outfitters (URBN) said Glen Senk, company CEO since May 2007, has resigned. Urban Outfitters named Richard Hayne, its chairman and president, as the company's new CEO. Shares fell $5.48 to $23.93.

Crocs (CROX) gained $2.61 to $18.56. The plastic clogs maker said fourth-quarter revenue was at the high end of its previous forecast range of $200 million to $205 million. Analysts had been looking for $204.6 million, Bloomberg News said. Crocs was thought to be dead after the 2008 financial crash.

NYSE Euronext (NYX) and Germany's Deutsche Böerse are scrambling to save their merger, after European antitrust regulators urged rejection of the deal. Wall Street rates the odds of salvaging the deal, however, look slim. The European Union competition authority recommended that EU commissioners rule against the tie-up, a senior European Union official said, The Wall Street Journal reported. NYSE Euronext was off 2 cents to $27.77.

Grocery-store operator Supervalu (SVU) shares were down $1.05 to $7.34. The company reported a fiscal-third-quarter loss that widened to $750 million, or $3.54 a share, from $202 million, or 95 cents, a year earlier. Excluding certain charges, the company earned 24 cents a share, less than the 25 cents analysts had expected.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%  0.050%

0.00%  0.00%
5-year Treasury note 

0.819%  0.854%

-1.33%  -1.33%
10-year Treasury note

1.904%  1.972%

1.76%  1.76%
30-year Treasury bond

2.959%  3.027%

2.42%  2.42%
Currencies











U.S. Dollar Index

81.614  81.101  1.36%  1.36%
British pound

1.5333  1.5489  -1.32%  -1.32%
(in U.S. $)

          
U.S. $ in pounds

£0.652  £0.646  1.34%  1.34%
Euro in dollars

$1.27  $1.28  -1.88%  -1.88%
(in U.S. $)

          
U.S. $ in euros

€ 0.787  € 0.783  1.92%  1.92%
U.S. $ in yen 

77.04  76.83  -0.08%   -0.08%
U.S. $ in Chinese

6.34  6.31  0.23%  0.23%
yuan

            
Canada dollar

$0.982  $0.000  0.10%  0.10%
(in U.S. $)

          
U.S. dollar 

$1.019  $1.016  -0.10%  -0.10%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,639.60

$1,631.50

4.65%

4.65%
(per troy ounce)











Copper (-HG)

$3.546

$3.513

3.20%

3.20%
(per pound)











Silver (-SI)

$29.8900

$29.8150

7.08%

7.08%
(per troy ounce)











Wheat (-ZW)

$6.4100

$6.3975

-1.80%

-1.80%
(per bushel)











Corn (-ZC)

$6.5150

$6.52

0.77%

0.77%
(per bushel)











Cotton 

$0.9643

0.9652

5.18%

5.18%
(per pound)











Coffee

$2.3755

2.288

3.44%

3.44%
(per pound)











Crude oil (-CL)

$100.87

$102.24

2.06%

2.06%
(per barrel)










 

63Comments
Jan 11, 2012 2:57PM
avatar
Energy stocks should slip. The phantom shortages or low supply numbers are what is leading to the inflated cost of oil. Energy companies know that supply is still high, and has been, because of a warmer winter so far as well as less travel in the winter months. The possible turmoil in Iran will continue to weigh on oil futures, but should not. No power will allow them to close the Strait, not to mention it would cut off their own noses to spite their face. If they will not allow tankers to leave will oil for other countries they supply I am sure we and the powers that be in that region will not allow their exports to leave. I am also sure that Opec will not allow this and will call for whatever means necessary to secure their exports.
Jan 11, 2012 5:29PM
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A 115 Billion flowing out of mutual funds? Go figure ?  Take your money and run its a rigged game. A suckers bet.  Ask Jon Corzine where your money went? Maybe into his pocket go figure. Why is Mr Corzine not in prison? You and me would surely be ?
Jan 11, 2012 4:26PM
avatar

dunnunder-

I know you hate liberals, but blaming them for Iran missiles?  A bit of stretch.  Makes you sound like a parnoid nut case..unlesss that is what you want to sound like, because you are.

Jan 11, 2012 7:50PM
avatar

as a guy now living his 3rd year with what i call catastrophic insurance, i continue to say if people paid for their own insurance in mass, instead of companies, we'd see rates come down and coverage get better. 

 

i pay about $150 a month for $5000 deductable (blue cross).  i basically pay for all visits and drugs unless i break a leg or something.  i therefore pay for my medical bills in general unless something big happens. 

 

i've seen too many cases where co workers go to the doctor for simple sniffles simply to get a basic pill.  truely wasting insurance and doctor's time. 

 

Always nervous about the government directly doing anything.  I'm fine with them facilitating and buying, but I'm very hesitant about them actually running things.  The French issue that scares me (having had a very expensive medical procedure at a too young for big savings and too old to run to mommy and daddy) is the out of pocket nature.

In truth.. I like a largely private insurance system with an individual mandate.  The mandate is key though.  Avoids adverse selection and pre-existing condition issues.  I've been trying to think about the variety of coverage though... What's to stop someone from getting a more robust plan as they age and use more?
Jan 11, 2012 10:53PM
avatar

VF, some manufactures that make things could easily produce things they made in the 90's...  I'd say a good 30% of what we make today was aaround back then. 

 

Differences today are the process' are faster, easier, and require less lower skill labor.  This of course has been replaced with higher skill labor.  

 

Today I have at least 6 times the production capacity I had back then with about the same workforce.   We work smarter today, and have adapted many Japanese concepts.  We frequently move machines from cell to cell.  Now they are all connected via wireless.  This enables plant floor reconfigurations of cells. 

 

Probably the biggest long term issue that will reduce manufacturing is the educational system.  We keep turning out college prep people and culture is training people that no college degree means lowclass.  We need to adopt a German type system, that also offers a technical training path.  The world need machanics, plumbers, machinists, electricians, and other skilled trades too...

Jan 11, 2012 6:40PM
avatar

Classic Lady

WHICH ROOM:::::::::THE OVAL OFFICE??Wink  WHAT OTHER MONEY:::OUR'S??Angry
I say bathroom while he is by himself looking in the mirror
Jan 11, 2012 5:56PM
avatar
Die Bank of America Die. The (TBTF) Criminal Banking Cartel.
Jan 11, 2012 6:01PM
avatar
Classic Lady     Mr Corzine is a GOD among men. He is above the law a giant of a man that makes the rest of us look pale and weak. But there is a old saying.   What goes around comes around. There is a HARD RAIN COMING.
Jan 11, 2012 6:38PM
avatar

Europe is full of PIIGS

 

DIE BANK OF AMERICA

Jan 11, 2012 3:32PM
avatar
Deflationary crash is coming. An entire nation cannot borrow non-stop and hope that all will be fine when the pay back time arrives. US dollar is the place to be. There is nowhere to hide. There is no way to diversify. Every asset will decline against the US dollar. Google for DEFLATIONARY CRASH to understand why.
Jan 11, 2012 7:05PM
avatar

Dow slips,

Stocks higher....

hum-hum

as usual, contradictory article...

Jan 11, 2012 5:39PM
avatar

Not betting on an election year bounce this time.

Republicans in Congress want the economy to look bad so they can do an "I told you so". Dems don't have the votes to push through add'l spending and I don't think they should. Fed has nothing left in their quiver.

I think there is enough momentum in the economy, without any artifical stimulus, that we'll see a continued gradual recovery, with a few setbacks but a few sectors out performing.  Housing may surprise and that will help employment, as that is very labor intensive. Autos have been doing well, too. A lot of pent up demand.  Financials and export dependent stocks will be vulnerable, I'm guessing.

Jan 11, 2012 6:36PM
avatar
ClockThe GOP has gone MAD! For the last three years all I've heard is how horrible The Affordable Health Care Act is, now the GOP is going to send it's architect to run for President. COO COOCH CACHOU How are they going to put lip stick on this Giant Pig Red lipsConfusedDisappointedCryingI don't know
Jan 11, 2012 8:22PM
avatar

THIS IS WHAT THE LEFTWING COMMY PINKOS VOTE IN!! 

Wasserman-Schultz Blames Tea Party For Tucson Shooting

"You had town hall meetings that they tried to take over, and you saw some their conduct at those tea party meetings. When they come and disagree with you, you're not just wrong, you're the enemy."                                                                                                        Wasserman-Schultz Blames Tea Party For Tucson Shooting  VIDEO

 

Jan 11, 2012 11:31PM
avatar
I think I might keep an eye on a paranoid nut case developing nuclear weapons.
Jan 11, 2012 10:14PM
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The country can produce all they want with robots and machines no humans needed........But then again, humans don't have to buy the products either.  I and many people I know now prefer shopping at garage sales, auctions and the like.  I can get a better product in many cases for about 1/10 of the price of retail. Open-mouthed You may look no farther than your own closets/garage to find the items you really need and it cost you nothing.
Jan 11, 2012 9:36PM
avatar
Vokerfan,

If you think inflation isn't growing you aren't shopping for basic items.  Homes are still too expensive, national average and have much further to fall. 

You are sucking up public numbers spewed out that have been modified for ridiculous things like hedonistic value which counters down inflation or substitution which also decreases the reported inflation.  But none of these items accurate represent the true inflation price we all pay at a cash register for an item.  It's pure none sense. Just because I get more enjoyment out of a pack of gum because it has flavor crystals doesn't mean I'm paying less-- 2000 I paid .50 for a small pack of gum.  Today I pay 1.00 taxes for the same pack quantity and brand of gum but now they added flavor crystals-- so economists that like to play with numbers and make things rosy will say your hedonistic pleasure gets more out of it so they pretend I only paid 60 cents instead of 1.00 and taxes cents.   And measuring substitution doesn't make sense on a static report, like Bread is 2.00 from 1.50 they'd say well they could substitute this with tortillas from 1.60 from 1.20.   So that bread didn't really cost you 2.00 it was 1.80 that it cost you.  But in reality people are paying for bread at 2.00 a loaf (just for say). 

Basically, the CPI and many other numbers have become baseless and just about useless.  Unemployment numbers don't count those who no longer get unemployment checks.

Look closer at the situation.  We're in the middle of a wealth transfer.  Or an implosion in the economic system world wide.  One or the other.  And I don't care who you elect president, none of them are willing to address this issue, the status-quo has made them rich and they want to keep it that way-- fudging numbers has helped them fool the remaining middle class.  But now they're feeling it and looking at the numbers shaking there head as it isn't matching reality.

Jan 11, 2012 8:39PM
avatar
Better peed off than peed on we believe.

i'm sure there's a few people who would disagree with you.........google,  golden shower!Don't tell anyone   just sayin, wouldn't want anyone to get upset!

Jan 11, 2012 11:06PM
avatar
But domestic supplies were much larger than expected, according to an Energy Department report. So there was pressure on energy shares. Exxon Mobil (XOM -0.75%) was off 64 cents to $85.08. Schlumberger (SLB -0.83%) was down 59 cents to $70.16.

Hmmmm,

         Just what did they expect? It amazes me that these greedy,self-centered​ sleazebags that steal from the very core of what supports them,actually expect to be able to pass themselves off as unsuspecting simpletons who got caught off guard. If the supply is so much greater than expected how come the price hasn't come down just as fast as it went up last week when they all decided to worry about Europe and Iran again.

           Freakin scumbag speculators

                                                                                                    Good day

                                                                                                    Ladies and Gents

Jan 11, 2012 8:57PM
avatar
Max:  We have the finest military because we dump gobs and gobs of cash into it.. far beyond what makes sense and and is effective.  If we measured the military effectiveness on a per dollar spent basis we'd probably find that we're not the more efficient force (I think Israel would probably be)  In truth, it's the same with health care.  The well off live a lot longer and have access to better health care establishments than others.  It may be a greater dollar layout than would be deemed efficient, but being in a position to throw a few million at living another year is something that's only open to people who have a few million to throw at it.  Now that may be due to better living conditions, diet, and preventative care... or it could be attributable to the improved coverage that better means can get you beyond just Medicare.
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