Oil falls below $100; stocks take a dive

Updated: 6:02 p.m. ET.

Stocks tumbled Thursday afternoon on a disappointing report on jobless claims and an ugly sell-off for commodities.

Crude oil (-CL) dropped below $100 a barrel for the first time since March 16. Gold (-GC) settled below $1,500 for the first time since April 20, and silver (-SI) plunged to its lowest close since March 22. Both were continuing to fall in electronic trading.

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The commodity bust pushed the dollar higher for a third day in the last five and pushed U.S. interest rates lower. The bad news on jobless claims raises the chances that Friday's big report on payroll employment and unemployment, due at 8:30 a.m. ET, will disappoint.

The Dow Jones Industrials ($INDU) closed down 139 points, or 1.1%, to 12,584 after a midday rebound fell apart. The Standard & Poor's 500 Index ($INX) was down 12 points, or 0.9%, to 1,335, and the Nasdaq Composite Index ($COMPX) was down 14 points, or 0.7%, to 2,815. The Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks, was down 12 points, or 0.5% to 2,375.

The loss was the fourth straight decline for the S&P 500 and the Nasdaq. This is only the second time since 1960 that the S&P 500 opened May with four straight declines. The Dow's only gain this week was just 0.15 of a point on Tuesday.

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The market's volatility comes despite a reasonably strong first-quarter profit report from General Motors (GM). But GM shares sold off.

The selling also produced a flight to the dollar, which was up against the pound, euro and Canadian dollar. The U.S. Dollar Index rose to 74.38 from Wednesday's 73.21.

The dollar rose as many investors sought safety in the 10-year Treasury note. The yield on the note fell to 3.168% from Wednesday's 3.223% and 3.57% as last as April 11.

Commodity plunge takes stocks down, too
Silver's decline this week reached an unprecedented 25.4%. Silver for July delivery settled down 8% to $36.24 an ounce today and was off an additional $1.70 an ounce to $34.54 in electronic trading after New York trading closed. From Wednesday's settlement price, silver is off 12.3%.

The price plunge wasn't unexpected. Silver had jumped 57% between Dec. 31 and Friday and 28.3% in April alone.

Thursday's fall was largely in reaction to a fourth margin increase in a bit more than week, and there were reports of new margin increases Friday and Monday.

Margins have increased 84% in less than two weeks. Rarely does anyone pay full price for a commodities contract. The only question is how much of the price one must put up to take a position.

Some of the selling was in response to reports that big investors in gold and silver, such as George Soros, have been reducing their positions. 

Gold, meanwhile, settled down $40.80 to $1,481.40 and was trading at $1,472 in electronic trading. That's a total loss of some 2.8%.

The selling in gold and silver also hit exchange-traded funds that buy silver.

The iShares Silver Trust (SLV) plunged 11.9% to $33.72. Based on the close, it's off 27.5% this week. The ETF rose 25 cents after hours to $33.96. Trading volume today was an astounding 294 million shares -- 30% higher than the volume in the SPDR S&P 500 (SPY) ETF, which tracks the entire S&P 500.

The SPDR Gold (GLD) ETF fell 2.9% to $143.47, a 5.8% decline on the week. Like the silver ETF, it was higher after hours at $143.67.

Crude settled down $9.44 to $99.80. It had dropped to as low as $98.25 around 12:30 p.m. ET. It was off an additional 28 cents to $99.52 in electronic trading.

If the oil sell-off holds or continues in the days ahead, motorists may get a small break at the gas pump. Gasoline was averaging $3.985 a gallon today, according to AAA's Daily Fuel Gauge Report. It takes a week or so before lower prices turn up at gas stations.

Energy stocks plunged on the oil sell-off. Chevron (CVX) was off 2.6% to $101.94; Exxon Mobil (XOM) dropped 3% to $82.26. Those declines subtracted more than 40 points from the Dow.

Eighteen of the 20 stocks in the Dow Jones Transportation Average ($DJT) were higher, led by Delta Air Lines (DAL), up 7% to $11.20. The index was up 53 points to 5,445.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$99.80			$109.24			-12.40%			9.21%
(per barrel)
Heating oil (-HO)			$2.8869			$3.1430			-11.87%			13.49%
(per gallon)
Natural gas (-NG)			$4.2610			$4.5770			-9.30%			-3.27%
(per mil. BTU)
Unleaded gasoline (-RB)			$3.0954			$4.5770			-10.66%			26.18%
(per gallon)
Brent crude			$110.80			$121.19			-11.99%			16.94%
(per barrel)
Retail gasoline			$3.9850			$3.9820			1.94%			29.72%
(per gallon; AAA)

Only 3 Dow stocks with gains
Only three of the 30 Dow stocks were higher: Intel (INTC), Walt Disney (DIS) and Cisco Systems (CSCO).

The laggard was Alcoa (AA), down 2.6% to $17.01 after Tom Albanese, CEO of mining giant Rio Tinto (RIO), dismissed speculation his company was readying a takeover bid for Alcoa.

Meanwhile, 40 Nasdaq-100 stocks finished higher today, led by video-game maker Electronic Arts (ERTS), up 8.8% to $21.68 and Ross Stores (ROST), up 6.9% to $78.55.

Electronic Arts beat analysts’ estimates by 3 cents with adjusted earnings of 25 cents a share and easily topped expectations for revenue of $923.88 million with fourth-quarter sales of $995 million.

Ross Stores said same-store sales for April rose 10%, and the company boosted its first quarter earnings guidance to $1.47 to $1.48 a share, up from $1.32.

Decliners were ahead of gainers 1.6-to-1 on Nasdaq and 1.64-to-1 on the New York Stock Exchange.

Jobless claims disappoint; so does Trichet
The jobless claims numbers were a bit of a shock. Most economists had expected the weekly number to drop. For the week ended April 30, jobless claims ran at a seasonally adjusted 474,000, up from a revised 431,000 the week before. The seasonally adjusted rate has been above 400,000 for four straight weeks.

Jobs have been slow to recover from the Great Recession. Some 8 million jobs disappeared in the financial crisis, with perhaps a quarter of the job losses coming in construction.

The jobs picture for April may not be as bright as hoped. There had been hope that non-farm payrolls would rise perhaps 200,000, although estimates have been falling as furloughs have spread in the automotive industry because of parts shortages resulting from the Japanese earthquake. The unemployment rate is expected to hold at 8.9%.

In addition to the jobless claims, traders were disappointed with the European Central Bank, which had been expected to raise its base interest rate today. ECB President Jean-Claude Trichet said the bank would monitor price pressures carefully before raising rates. The next meeting comes next month. The Bank of England also held rates steady.

GM profit jumps, but investors wanted more
General Motors exceeded Wall Street's expectations with first-quarter adjusted earnings of 95 cents a share on sales of $36.2 billion. The profit was due to stronger vehicle sales, but asset sales also were a big part of the earnings. Analysts had projected a profit of 91 cents on sales of $35.6 billion.

The stock, however, was down 3.1% at $32.02. Some analysts were disappointed by the revenue growth in North America, which was impacted by the auto maker's move to offer big discounts in January and February, The Wall Street Journal noted. The company expects to lower incentives for the rest of the year. Rival Ford Motor (F) dropped 0.5% to $15.08.

JDS Uniphase (JDSU) jumped 6.9% to $21.38, after gaining as much as 11%. The maker of fiber-optic equipment forecast fourth-quarter revenue of as much as $475 million, more than the $469.1 million average analyst estimate.

Shares of Whole Foods Market (WFMI) were up 0.4% at $59.95 after the natural foods supermarket operator topped second-quarter earnings expectations late Wednesday.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.010%			0.020%			-75.00%			-91.67%
5-year Treasury note			1.891%			1.937%			-4.25%			-6.20%
10-year Treasury note			3.168%			3.223%			-3.88%			-4.15%
30-year Treasury bond			4.281%			4.329%			-2.84%			-1.86%
Currencies
U.S. Dollar Index			74.375			73.213			1.73%			-6.20%
British pound			$1.6383			$1.6504			-1.87%			4.98%
(in U.S. $)
U.S. $ in pounds			£0.610			£0.606			1.90%			-4.74%
Euro in dollars			$1.453			$1.484			-1.90%			8.62%
(in U.S. $)
U.S. $ in euros			€ 0.688			€ 0.674			1.94%			-7.93%
U.S. $ in yen			80.150			80.620			-1.58%			-1.50%
U.S. $ in Chinese			6.489			6.489			-0.35%			-1.90%
yuan
Canada dollar			$1.033			$1.044			-2.09%			2.98%
(in U.S. $)
U.S. dollar			$0.968			$0.958			2.05%			-2.96%
(in Canadian $)
Commodities
Gold (-GC)			$1,481.40			$1,515.30			-4.82%			4.22%
(per troy ounce)
Copper (-HG)			$3.998			$4.134			-4.33%			-10.10%
(per pound)
Silver (-SI)			$36.240			$39.388			-25.43%			17.14%
(per troy ounce)
Wheat (-ZW)			$7.5400			$7.7200			-5.90%			-5.07%
(per bushel)
Corn (-ZC)			$7.0875			$7.2950			-6.00%			13.86%
(per bushel)
Cotton			$1.4686			$1.5151			-26.65%			1.42%
(per pound)
Coffee			$2.88			$2.95			-3.87%			0.1985447
(per pound)
Crude oil (-CL)			$99.80			$109.24			-12.40%			9.21%
(per barrel)