Dow finishes up 10 as traders look to the Fed

The market manages small gains overall, but Apple shares rise on excitement about its new iPhone. Germany's high court approves German participation in the European rescue fund. Zuckerberg's interview helps Facebook shares.

By Charley Blaine Sep 12, 2012 12:07PM
Charley BlaineUpdated: 7:32 p.m. ET

The stock market stumbled to modest gains today ahead of an important Federal Reserve decision and after Germany's top court gave its go-ahead to the eurozone's new rescue fund.

The market was helped by gains in Apple (AAPL), up $9.20 to $669.79, after it introduced a new version of its iPhone and several new versions of its iPod music player. Facebook (FB) moved higher as well.

Several key stocks hit all-time highs, including Costco Wholesale (COST), Panera Bread (PNRA) and insurance giant Travelers Companies (TRV). General Electric (GE) finished at nearly a four-year high. Plus, housing stocks pushed higher, with PulteGroup (PHM) and Lennar (LEN) among the top five performers in the Standard & Poor's 500 Index ($INX).

Crude oil (-CL) and gold (-GC) pulled back after opening higher on news that Christopher Stevens, the U.S. ambassador to Libya, and three others were killed late Tuesday in Benghazi, Libya, by rioters apparently enraged by a film they considered insulting to Islam.

The Dow Jones industrials ($INDU) closed up 10 points to 13,333; the blue chips had been up as many as 50 points just after the open. The Standard & Poor's 500 Index ($INX)  gained 3 points to 1,437. The index hit 1,439.15, its highest intraday price since May 19, 2008. The Nasdaq Composite Index ($COMPX) gained 10 points to 3,114.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks and is heavily influenced by Apple, managed a 7-point gain to 2,792.

The 10-year Treasury yield rose to 1.765% from Tuesday's 1.695%.

Futures trading suggests U.S. stocks will open flat on Thursday.

What's in the new iPhone
A robust Apple media event in San Francisco today generated the usual fawning coverage of the new iPhone features. And the stock did its usual number, rising 13% this quarter on the expectations and falling on the news.

The features include a 4-inch diagonal screen, up from 3.5 inches; an LTE chip so the phone can run on the fastest 4G networks; three microphones instead of one; a battery with longer life between recharges; a faster A6 microprocessor. And, of course, the device is lighter.

Preorders start Friday; the phones will ship on Sept. 21. The iPhone has proved one of the great juggernauts. Sales of the devices totaled nearly $76 billion for the first three quarters of its 2012 fiscal year. Hewlett-Packard's total revenue for its first three quarters was $90.3 billion.

Apple also announced a number of changes to its iPod lineup and to its iTunes store.

A big aerospace deal may be ahead
Airbus parent European Aeronautic Defence & Space (EADSY) and Britain's BAE Systems (BAESY) said they are in advanced merger talks to create the world's largest aerospace-and-defense company, leapfrogging U.S. rivals.

A deal could intensify competition for shrinking defense spending by Western governments and rising military investments in the Mideast and parts of Asia, The Wall Street Journal noted. It also would heighten the competition in commercial jetliners between Airbus and U.S. rival Boeing (BA).

BAE and EADS generated a combined revenue of about $90 billion in 2011. Boeing is currently the world's biggest aerospace company; 2011 sales hit $68.7 billion. The duo's combined military sales of $45.3 billion last year topped those of Lockheed Martin (LMT), now the world's biggest defense company. The European companies' combined market value is $49 billion.

There's some investor skepticism about this deal. While BAE shares were up $2.51 to $23.64 in New York, EADS was off $2.07 to $36.20. Boeing was down 31 cents to $70.96. Lockheed Martin was up 18 cents to $92.42.

Facebook wins some cheers
Facebook shares were up $1.50 to $20.93, its best close since Aug. 15, as investors apparently liked what they heard on Tuesday from CEO Mark Zuckerberg.

Zuckerberg told the TechCrunch blog conference that the company was focused on generating revenue from its mobile applications, a weak link in its business. Very importantly, he suggested the company might build a search engine. It won't be building a smartphone.

Facebook shares are still down 45% from the $38-a-share price generated in its initial public offering in May.

Google (GOOG) dipped slightly to $690.88 on the search-engine comments.

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$97.01

$97.17

0.56%

-1.84%
(per barrel)











Heating oil (-HO)

$3.2152

$3.1857

1.10%

10.33%
(per gallon)











Natural gas (-NG)

$3.0630

$2.9920

9.43%

2.48%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.0016

$3.0435

0.97%

12.95%
(per gallon)











Brent crude 

$115.96

$115.40

1.21%

7.99%
(per barrel)











Retail gasoline

$3.8430

$3.8430

0.37%

17.31%
(per gallon; AAA)












A decision that supports the euro
Germany's Federal Constitutional Court ruled that Germany could proceed with its contribution to the European Stability Mechanism. But the court set a number of conditions to its approval. Most important: a requirement for parliamentary approval of any increase in the agreed German contribution of 190 billion euros, or about $240 billion.

A rejection of Germany's role in the ESM might have unleashed new waves of instability on the financial markets and thrown the fitful march toward European integration into question as the architects of the rescue rushed back to the drawing board.

As it was, stocks in Europe were mostly higher in response to the ruling, although indexes in the United Kingdom, Switzerland and the Netherlands were off slightly.

The euro also moved higher and was trading at $1.291, the highest level against the dollar since May 11. The euro has been moving higher against the dollar in expectation of the ruling and is up nearly 7% since bottoming on July 24.

Spotlight shifts to the Fed -- and the fiscal cliff
The ruling now puts the focus on the Federal Reserve. The Federal Open Market Committee, the Fed's policy-making body, is meeting today and Thursday.

Wall Street is betting the Fed will move to add some stimulus to the economy. At the very least, the FOMC is expected to say it expects exceptionally low interest rates to last into 2015. It may also do some asset buying to ensure rates stay low.

But there is a lot of wariness about the idea. The biggest concern is that buying mortgage-backed securities or Treasury bonds won't spur much job creation. But there's no consensus in Congress to do anything for job creation.

The Fed decision will come out at 12:30 p.m. ET Thursday. The Fed will also issue a new set of economic projections at 2 p.m., and Chairman Ben Bernanke will hold a news conference at 2:15 p.m.

Once the Fed makes its decision, people will start looking at the fiscal-cliff problem. That is what happens from a combination of the expiration of the Bush tax cuts and across-the-board cuts required under legislation passed in 2011.

Republicans want tax cuts and spending cuts on everything except defense. Democrats will agree to some spending cuts but higher taxes for the more affluent.

But to get any solution requires new legislation, and House Speaker John Boehner conceded Tuesday nothing much will happen before the election. If the automatic spending cuts kick in, the odds are big for an economic slowdown and maybe even a recession.

Before the Fed starts announcing, the Labor Department releases its weekly report on jobless claims.

Housing stocks lead the market
Housing stocks were the market leaders, even if there was no news. Pulte, up 88 cents to $15.55, was the third-best S&P 500 performer. Lennar, up $1.44 to $34.52, was fifth.

The Philadelphia Housing Sector Index ($HGX), up 5 points to 157, its highest close since January 2008, was the leading index among 44 indexes that Market Dispatches tracks.

Nineteen of the 30 Dow stocks were higher, led by Verizon Communications (VZ), General Electric and Travelers. DuPont (DD) and Bank of America (BAC) were the laggards.

GE's close of $21.89, up 30 cents, was its highest finish since October 2008.

A total of 288 S&P 500 stocks were higher, led by Vulcan Materials (VMC), which may be a merger candidate, and Sears Holdings (SHLD), which spun off several subsidiaries today.

Only 47 Nasdaq-100 stocks were higher, led by Sears and Garmin (GRMN).

The laggards were Monster Beverage (MNST) and Green Mountain Coffee Roasters (GMCR).

Monster, the largest U.S. energy drink maker by sales volume, fell the most in a month after two U.S. senators called for greater regulation of the beverages. Sens. Dick Durbin, D-Ill., and Richard Blumenthal, D-Conn., asked the Food and Drug Administration to look into whether energy drinks qualify as dietary supplements.

Gold falls; oil is mixed
Gold settled down $1.20 to $1,733.70 an ounce. Silver (-SI) was off 27.4 cents to $33.292 an ounce. Copper (-HG) slipped to $3.6925 a pound.

Crude oil in New York settled down 16 cents to $97.01 a barrel. But Brent crude was up 46 cents to $115.86 in London. The gain probably reflects the tensions resulting from the death of Ambassador Stevens.

But the surprise of the day was the relatively muted response of the energy markets to the Libyan attack, Stephen Schork, editor of the Schork Report, told Bloomberg Television this afternoon.

Oil prices reflect about $10 a barrel from the tensions between Iran and Israel over Iran's nuclear program, he said.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.090%

11.11%

900.00%
5-year Treasury note 

0.696%

0.663%

16.78%

-16.14%
10-year Treasury note

1.765%

1.695%

13.00%

-5.67%
30-year Treasury bond

2.926%

2.846%

9.02%

1.28%
Currencies











U.S. Dollar Index

79.723

79.836

-1.84%

-0.99%
British pound

1.6111

1.6075

1.40%

3.69%
(in U.S. $)

 








U.S. $ in pounds

£0.621

£0.622

-1.38%

-3.56%
Euro in dollars

$1.29

$1.29

2.41%

-0.44%
(in U.S. $)

 








U.S. $ in euros

€ 0.775

€ 0.778

-2.36%

0.44%
U.S. $ in yen 

78.00

77.80

-0.62%

1.17%
U.S. $ in Chinese

6.35

6.33

-0.24%

0.36%
yuan











Canada dollar

$1.024

$1.028

0.99%

4.41%
(in U.S. $)

 








U.S. dollar 

$0.977

$0.973

-0.99%

-4.23%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,733.70

$1,734.90

2.73%

10.65%
(per troy ounce)

 








Copper (-HG)

$3.693

$3.697

6.81%

7.47%
(per pound)

 








Silver (-SI)

$33.2920

$33.5660

5.88%

19.26%
(per troy ounce)

 








Wheat (-ZW)

$8.9000

$8.8375

0.06%

36.35%
(per bushel)

 








Corn (-ZC)

$7.6950

$7.778

-3.78%

19.03%
(per bushel)

 








Cotton 

$0.7333

0.7493

-5.09%

-20.02%
(per pound)

 








Coffee

$1.7750

1.7755

7.74%

-22.71%
(per pound)

 








Crude oil (-CL)

$97.01

$97.17

0.56%

-1.84%
(per barrel)










 

196Comments
Sep 12, 2012 5:23PM
avatar

YES.  and add to this "we" planted other seeds the people of USSR saw thru world olympic games, world cup, etc.  Athletes who came to USA in the 70's such as Olga Korbet, etc, saw USA 1st hand and saw how "bad" we were to have ice cream, katchup, and color TV's, blue genes, etc.  and like typical people this was something they wanted.  they headed home to tell friends that the propaganda they heard about us wasn't 100% correct. 

 

i swear our hospitality in those world games planted the seeds to start tearing down the comunist countries.  then we broke into china with similar schemes - showing the people our culture. 

 

we should have dropped blue genes, playboy magazines, cheese burgers on iraq-iran-pakistan instead of bombs.  we would have won. 

 

>>>>>The USSR collapsed because their people demanded to paid for the work they do, and they demanded an end to the government caring for them.  What resulted from the communists was decades of economic decline, starvation, and massive state repression.  Gulags and executions.
 
The end result is the productive ceased to be so.  So much so that the standard of living dropped in the USSR to far below pre-Czarist levels.  Sure they had free healthcare, but you would never see a doctor.<<<<
Sep 12, 2012 5:20PM
avatar
President Obama's policies are Centrist.
No one in Congress who is extreme on either end wants to give in.
Also, too many representatives are representing "special interests" backed by Big-Money. Big Money corruption MUST go. And Nor qui st should be h ung for tre ason.

It's time for the Repubs to get back to being traditional, realistic Conservatives, and time for the Dems to go back to being the party of The People. It seems the Dems have moved to the right to fill the void of traditional Republicans.

Sep 12, 2012 5:18PM
avatar
Classic, Obama has the best plan that has proven to work in the past, but Democrats and Republicans don't want anybody touching their special interest corporate and social welfare money pits. Obama wants for every 1 dollar in tax increases, 2 1/2 dollars in spending reductions. It's a more than fair plan and gave us 4 balanced budgets during Clintons term, we can go with what has proven to work or continue the failed Republican plan, no Republican President has balanced a budget in over fifty years and they don't ever intend to.
Sep 12, 2012 5:13PM
avatar

The USSR collapsed ..................... I think Putin might see it differently.

Funny how Reagan is praissed for spending them to death but really in the long run did them a favour.  Now the Russians have cut loose all the old block countries they were holding up and the KGB now has direct control (with help from their mafias or course).  They went underground for a decade, let Borris Yelson fail then took over when the people couldn't stand being seen as week.  Funny what a few dozen dollars per barrel of oil will do for you when you are the largest exporter.  They paid off some of their debt, defaulted on the rest, restructured and are off to the races again, threatening the rest of Europe like the good old days.

Sep 12, 2012 5:06PM
avatar
The Grand Old Party is DEAD..........

.It's been taken over by Far Right Extremist and the Christian Taliban bought and paid for by Corporations......

This is dangerous for our Democracy.......We need two parties that have enough moderates  to work together for the American people.........GOP moderates are either controlled or have been removed from the GOP which will seal the fate  of the Republican Party...........The demise of the Republican party is obvious....they are self destructing before our eyes...
Sep 12, 2012 5:03PM
avatar
"The problem with not having the threat of communism, is that the capitalist becomes lazy and immoral, and with that comes the inevitable decline of capitalism.  A little bit of socialism is all that stands in the way of a future communist revoltion".  - 5PMFriday
Sep 12, 2012 5:01PM
avatar
There can be no tax increase until all of Obama's new 800 billion in spending is rolled back.  These special interest rewards must be eliminated.  When "57 States" took office we were spending 2.95 trillion.  Now we spend 3.8 trillion.   Over 800 billion in NEW spending.  10.2 trillion in debt when Obama started, now over 16 trillion in debt...   

Jimmy Carter, YOU are no longer the worse President ever, this idiot Obama is....
Sep 12, 2012 4:59PM
avatar

in the final analysis corporations do not pay taxes. The taxes are paid by

their customers

Their employees

their shareholders

 

The results of having the highest corporate tax rate in the world are

higher prices

fewer Americans working

lower dividends

Sep 12, 2012 4:58PM
avatar

>>>A LEAST ROMNEY HAS A PLAN<<<

 

A bad plan is not a plan.

Sep 12, 2012 4:54PM
avatar
Max Sparticas...

The USSR collapsed because their people demanded to paid for the work they do, and they demanded an end to the government caring for them.  What resulted from the communists was decades of economic decline, starvation, and massive state repression.  Gulags and executions.

The end result is the productive ceased to be so.  So much so that the standard of living dropped in the USSR to far below pre-Czarist levels.  Sure they had free healthcare, but you would never see a doctor.

And after 75 years of failed harvests, all of sudden they are exporting food.   Socialism and communism LOWER living standards.  They always have, that is a lesson of history.   Capitalism on the other hand rewards work.  Of course those that don't want to work suffer.

The country has been in a 4 year democrat Malaise, and "57 States" seems to think that the answer is more Spending, Taxing, Borrowing and Printing.   He views that as the way to prosperity.  Keep growing government and shrinking the private sector.  

Well I have to ask you how is that working out for ya?   I think the majority of people will give the imbecile Obama his walking papers.   And if they don't they deserve what he brings upon them.  

Business should hunker down..  Fire every democrat on your payroll.  Boycott and don't do business with democrats.  Don't support any unions...  Unions are Marxist organizations...
Sep 12, 2012 4:48PM
avatar

>>> any remnants of god from their party<<<

 

Apparently, from your lack of capitalization, God doesn't mean that much to you, so why do you care?

Sep 12, 2012 4:43PM
avatar
Irun, Romney has clearly stated He will cut taxes on corporations, which makes up about 9% of Federal revenue while our national debt skyrockets, where do you think He will raise taxes to offset more cuts for the richest Americans, that only leaves middle class working Families to fill the gap. As for Health Care, by requiring the dead wood leaches to pay their fair share, this will reduce cost for responsible Americans. No nation with socialized medicine spends  more than 11% of their GDP on Health Care, we spend almost 17%, only a fool wouldn't want to save 1/3 rd on Health Care cost.
Sep 12, 2012 4:43PM
avatar

Whats the Market looking for the FED to do...?

Print more funny money...That dosent help anybody but the fatcat banks...

Sep 12, 2012 4:42PM
avatar
Gasoline will hit a $6.00 a gallon for regular and all is well according to our leaders and saviors ! SCREW THE MIDDLE CLASS !
Sep 12, 2012 4:27PM
avatar
Any truth to the Justice Dept. suing Gallop Polls over showing Romney Ahead last March or April?
Sep 12, 2012 4:25PM
avatar
They are saying "the Market looks to the Feds".  Obviously they are not looking very hard.
Sep 12, 2012 4:24PM
avatar
The question is not whether the big banks and the others committed crimes and negligence, and got away scott free. The question is what are we going to do about it. (this sounds alot better if you imagine John F Kennedy's voice saying it) 
Sep 12, 2012 4:18PM
avatar
Max, where do you get that Romney is raising taxes on the middle class?  Obama is the one raising taxes you moron.  Read his healthcare bill, and all the taxes hidden inside that effect the middle class, his policies that raise the price of gas, his fumbling of our wars that continue to cost us money.  You need to educate yourself please before you make stupid statements.  
Sep 12, 2012 4:16PM
avatar

Market looks to the fed? Other headlines

Blind leading the blind?

Dumb & Dumber?

Lassie come home

 

Sep 12, 2012 4:13PM
avatar
What about the fiscal cliff the Fed is leading us over?
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