Dow falls 101 on profit-taking, economic worries
An early rally falls apart after the head of the Philadelphia Federal Reserve Bank says the Fed's stimulus plan won't work. Money manager BlackRock says stocks have peaked for 2012. Home prices and consumer confidence rise. Google hits a new high.
Updated: 8:31 p.m. ETStocks suffered their worst declines in at least a month today despite reports showing a stronger-than-expected index of home prices in 20 markets and the highest consumer confidence levels since February.
The slump was started by worries that the Federal Reserve's stimulus won't work and fears the market rally since June is running out of gas. At the same time, broadcasts of violent protests in Spain against potential new austerity measures also dismayed investors.
Charles Plosser, president of the Philadelphia Federal Reserve Bank, said he does not believe the Fed's latest stimulus campaign would do anything for economic growth. Plosser had opposed the Fed's decision to buy up to $40 billion in mortgage bonds. At the same time, BlackRock, one of the top asset managers, said stocks have peaked for the year. The Standard & Poor's 500 Index ($INX) will end the year at 1,450, BlackRock said -- just below current levels, but the firm sees the S&P reaching 1,25 by mid-2013.
Casualties of the pullback were housing stocks, which had rallied in the morning thanks to the home-price numbers. Construction equipment maker Caterpillar (CAT) weighed on the market after warning its 2015 profits would be lower than expected.
The Dow Jones industrials ($INDU) fell 101 points to 13,458, their third straight decline and biggest one-day loss since Aug. 30. The S&P 500 was off 15 points to 1,442, and the Nasdaq Composite Index ($COMPX) was down 43 points to 3,118, its second loss in a row. The Nasdaq-100 Index ($NDX) lost 39 points to 2,805.
Article continues below.The S&P 500's close was its lowest since Sept. 12, and its loss was its biggest since June 25. The Nasdaq's loss, its third in four days, also was its largest since June 25.
The Dow had risen as many as 61 points to 13,620 before selling set in. The blue chips have now topped 13,600 five times since Sept. 14 -- and been unable to hold that level into the close. The last time the Dow finished above 13,600 was Dec. 10, 2007.
The S&P 500 hit a 2012 closing high of 1,465 on Sept. 14. The index index hit an intraday high of 1,475 -- and fell back. It hasn't come close to 1,475 since then. The index is up 14.6% this year and is up 12.8% since bottoming in early June after a big sell-off in May.
Wednesday will feature a Commerce Department report on new-home sales. Futures trading suggests a slightly higher open for stocks.
| Energy prices -- New York close (Updated) | ||||||||||||
| Tues. | Mon. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $91.37 | $91.93 | -5.29% | -7.55% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $3.1069 | $3.0961 | -2.30% | 6.61% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.9240 | $2.8370 | 4.47% | -2.17% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.8224 | $2.7877 | -5.06% | 6.21% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $110.45 | $109.81 | -3.60% | 2.86% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.8100 | $3.8080 | -0.50% | 16.30% | ||||||||
| (per gallon; AAA) | ||||||||||||
A Fed official's skepticism and worries about a peaking market
The day's early gains were wiped out when the Philadelphia Fed's Plosser said he doubted the Fed's plan will work.
"We are unlikely to see much benefit to growth or to employment from further asset purchases," Plosser said in the text of a speech prepared for delivery today. "Conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility."
Plosser also told Fox News that the Fed would have to raise rates well before 2015 because he expects the economy to be much stronger. The Fed recently said it expected rates to be exceptionally low until mid-2015.
Also weighing on the market was BlackRock's projections that 2012's gains were already achieved. Reuters reported that BlackRock's estimate of a 1,450 finish for the S&P was actually an increase from the firm's earlier forecast that the index would end at 1,350 this year hit 1,400 next year.
Earlier, the firm projected the S&P would finish the year at 1,350 and rise to 1,400 by mid-2013.
By one measure -- relative strength -- the Dow and the S&P 500 have been looking overbought since about Sept. 14. A 14-day relative strength index for each was well above 70 for much of that times. Readings above 70 are an overbought signal. Readings below 30 are oversold signals. At today's close, RSI values for the Dow, S&P 500 and Nasdaq were at 73.5, 67.7 and 59.2, respectively.
Caterpillar weighs on Dow; Google jumps
Caterpillar closed down $3.86 to $87.01 and was the biggest loser among the 30 Dow stocks and the 15th-worst performer among S&P 500 stocks. The company said late Monday that it sees tepid economic growth over the next few years. Rivals Joy Global (JOY), Terex (TEX) and Manitowoc (MTW) were also lower.
Apple, the biggest influence on the Nasdaq-100, was down $17.25 to $673.54, its biggest one-day loss since July 25, when it reported a rare earnings miss. The stock had set a record close of $702.10 on Wednesday before its iPhone 5 went on sale.
Google (GOOG), meanwhile, hit a new intraday high of $764.89 but fell back to $749.16, down 22 cents. Its market capitalization of $245 billion is now within about $10 billion of Microsoft's (MSFT), which was $256.8 billion. Microsoft, down 39 cents to $30.39, is the publisher of MSN Money.
Only five of the 30 Dow stocks were higher, led by Home Depot (HD), up 33 cents to $59.72. The stock moved up because of the S&P/Case-Shiller report. Next were Johnson & Johnson (JNJ) and UnitedHealth Group (UNH), which only joined the Dow this week.
Crude oil, gold lose early gains as dollar comes back
Crude oil (-CL) in New York and gold (-GC) were initially higher -- but then fell back as worries built about the global economy. Crude settled at $91.37, down 56 cents from Monday, after trading as high as $93.20.
Brent crude was up 47 cents to $110.28 a barrel but had been as high as $111.47.
Gold for December delivery hit $1,777.90 an ounce before pulling back to $1,766.90. That was still up $2.30.
The dollar had fallen in the morning against the euro and other currencies but has bounced up against the euro.
The 10-year Treasury yield was 1.682%, down from Monday's 1.718%.
Home prices may give the economy a boost
The market was initially cheered by the S&P/Case-Shiller Home Price Index, which showed prices in 20 markets increased 1.6% in July over June on an unadjusted basis.
A seasonally adjusted measure showed only a 0.2% gain. Either way, the gain was the sixth in a row. Many economists believe the price gains reflect lower inventories of foreclosed homes on markets and intensifying bidding by investors for foreclosed homes that can be rented out.
Meanwhile, The Conference Board said data showed confidence among American consumers rose in September to a seven-month high, which may help support the largest part of the economy.
| Short hits from the markets -- New York close (Updated) | ||||||||||||
| Tues. | Mon. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.1200% | 0.100% | 33.33% | 1100.00% | ||||||||
| 5-year Treasury note | 0.649% | 0.659% | 8.89% | -21.81% | ||||||||
| 10-year Treasury note | 1.682% | 1.718% | 7.68% | -10.10% | ||||||||
| 30-year Treasury bond | 3.032% | 3.032% | 12.97% | 4.95% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 79.608 | 79.577 | -1.98% | -1.14% | ||||||||
| British pound | 1.6192 | 1.6228 | 1.91% | 4.21% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.618 | £0.616 | -1.87% | -4.04% | ||||||||
| Euro in dollars | $1.29 | $1.29 | 2.47% | -0.39% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.775 | € 0.773 | -2.41% | 0.39% | ||||||||
| U.S. $ in yen | 77.94 | 77.85 | -0.70% | 1.09% | ||||||||
| U.S. $ in Chinese | 6.33 | 6.31 | -0.58% | 0.02% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $1.020 | $1.022 | 0.57% | 3.97% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $0.981 | $0.978 | -0.57% | -3.83% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,766.40 | $1,764.60 | 4.67% | 12.74% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.759 | $3.732 | 8.72% | 9.39% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $33.9480 | $33.9840 | 7.97% | 21.61% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $8.8650 | $8.9200 | -0.34% | 35.81% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $7.4375 | $7.448 | -7.00% | 15.04% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.7233 | 0.725 | -6.38% | -21.11% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.7365 | 1.723 | 5.40% | -24.38% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $91.37 | $91.93 | -5.29% | -7.55% | ||||||||
| (per barrel) | ||||||||||||
T'was the Night Before Election.....
T'was the night before elections,
And all thru' the town,
Tempers were flaring
Emotions ran up and down.
I, in my bathrobe
With a cat in my lap,
Had shut off the TV,
tired of political crap.
When all of a sudden,
There arose such a noise,
I peered out my window,
Saw Obama and his boys
They had come for my wallet,
They wanted my pay
To hand out to others
Who had not worked a day!
He snatched up my money,
And quick as a wink,
Jumped back on his bandwagon
As I gagged from the stink.
He then rallied his henchmen
Who were pulling his cart.
I could tell they were out
To tear my country apart!
'On Fannie, on Freddie,
On Biden and Ayers!
On Acorn, on Pelosi'
He screamed at the pairs!
They took off for his cause,
And as they flew out of sight,
I heard him laugh at a nation
Who wouldn't stand up and fight!
So I leave you to think on this one final note...
IF YOU DON'T WANT SOCIALISM GET OUT AND VOTE !!!!
It won't work because the US dollar will devalue further than the way it is now. All you have to do to see it is to travel around the world. Many countries around the globe don't want the US dollar anymore because it is useless to them. Americans are in their comfort zone in the USA and they don’t really know what is going on around the world. They are doing everything they can to promote what is really bad for their country and forget that their children are about to pay for it. I don’t have children and every day I am glad for it because my children won’t have to pay for this mess.
The US dollar so far has been very beneficial to Americans because the currency was the strongest currency around the world a decades ago, but not anymore these benefits are about to say good bye because once the US dollar devalue further, we are going to pay the full price for imported goods. This is the reason why Europe is paying more money at the pump than the USA. The dollar is being use for trading and continues to print more useless dollar is real bad news for the USA and the fed knows that. Why they continue to take the country down I have no idea, but ignoring the truth and play game with their country and forget that their children will pay for it later is certainly a problem. Some decisions even the president made some times make me wonder if he is remotely thinking about the consequences for tomorrow.
Before Americans fight each other on the internet, they should make sure that they know exactly what is going on because both presidential candidates know the problem and not one of them is going to fix it because political correctness comes first before the truth. They know they have to make crucial intelligent decisions to fix the problem, but they will do so, not because they don’t know but because they don't have to offend the rest of world. The decisions that are required to fix the USA economic problems will anger the rest of the world. It is too late and America will collapse and the one world government will form.
"Moderates" is a cover name for those with corrupt and hidden agendas.
I see the usual cretins throwing the R word around like it's candy.
You want REAL racism ?
Listen to our Worst Lady , Moochelle, at the Black Caucus
(BTW, isn't the entire premise of a "black caucus" , black news or Ebony, RACISM at the highest order ?
Why yes it is.
LOOK up the meaning of racism and then tell me it isn't so ?
I digress
Our Worst Ladies most memorable quotes at the "black caucus"
Talking of the White house - " It was built in part, by slaves"
This is a play on the YOU didn't build it rant, stupidity.
WHEN did any first lady from Mrs. Lincoln on, EVER reference slavery and why NOW, if NOT PANDERING TO THE BASE ?
What will "we:" do about Obese "African American" Children" - Who gives a sheet about fat , white kids, right Moochelle ?
What will "we" do about illiteracy In urban areas ? No dumb white kids, either !
What will "we" blah, blah , blah
My question is WHO IS WE ?
Exactly, WHO is she speaking too.?
It's not whitey , is it ?
Why no, it's a separate race that our Worst Lady and Dear Leader pander too, all at the expense of the rest of the country who are not "African" American.
Were just Americans and we don't count I guess , Moochelle ?
These cretins talk about Romney , he doesn't relate to the average guy, he's pandering to the rich , blah , blah
It's ALL GOOD however , when the Worst Lady wants to exclude whitey from her desires and needs for the country.
Let's just exclude all the honkies - No problem
Surprise , it's a problem with me and millions like me.
They will find out in Nov
There isn't another first lady who ever say the sheet that comes out of this racist , bimbo , America hating , affirmative action using , WORST LADY.
She's a loser
Do you know that the Federal deficit is over $16 trillion. Obama has run up that debt more than any other Pres in history. And ... if you take the personal debt like credit card debt, college debt, etc .... our debt in U.S. would be over $100,000,000,000,000!!!! THE U.S. IS BANCRUPT. No ... really, it is!
Obama can forget the bailouts ... there is no more money! So, if a bank, a company, or a group of individuals needs money ... you're f*cked!! There is no money. (Thanks Barry) The only thing the Gov't can do is to raise interest rates since they are the lowest that they've been in 60 years. And just like with Jimmy Carter ... as we raise the interest rates .. radical inflation will be right behind it. It's already started! Your costs are higher than they were a few years ago ... and your revenues are going down!! I am amazed that people don't see the ledge we are falling off and are so stupid to not understand that Obama is to blame??
Why did they keep the Audit the Fed bill passed in House from coming to a vote before recess?
What are the progressive and liberal excuses for allowing this ongoing rape of U.S. citizens ?
Simple --- they are complicit and part of the problem.
SO MUCH FOR HOPE AND CHANGE
IMO, if the leaders of the private sector wants the gravy in the good times, they need to help pick up the slack in the bad times. If they want less government then let them pass out some of that
gravy they have horded away in good times so that their workers can keep their jobs and
benefits and not expect the government to pick up the tab for their layed off and terminated
workers.
And don't for heavens sakes expect the government to bail them out and stimulate the
economy so they can recover.
The best thing to do would be to control your greed and corruption that caused the last
crash in 2008-2009.
Most of all the private sector and government must find a way to work together.
Don't have to see through cyber space....Any fool knows that..
Just count the Hands...Pretty much tells it all, for me or anybody.
I guess they come to these "so-called liberal" sites....To see how much they can disrupt them.
They sure as hell aren't talking about Financial stuff or the Markets...
Maybe some people are too brain-dead to realize that part of the disruption.
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The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
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