Stocks slip as materials, energy shares lag

Durable goods orders fall short of expectations. The Fed chief reiterates a warning on high unemployment rates. Global markets waver. Gold and oil fall.

By TheStreet Staff Mar 28, 2012 7:29AM

TheStreetImage: Wall Street sign (© Corbis/SuperStock)By Chao Deng


Updated at 12:37 p.m. ET


Material and energy stocks led the U.S. market lower Wednesday, with selling exasperated by a miss in the durable goods data.


The Dow Jones Industrial Average ($INDU) was losing 87.7 points at 13,109. The S&P 500 ($INX) was down 11.5 points at 1,401 and the Nasdaq ($COMPX) was shedding 25.4 points at 3,094.


Durable goods orders rose 2.2% to $211.8 billion in February after declining 3.6% in January. Economists had expected orders to rise by 2.9%. Excluding transportation, orders rose 1.6%.


Federal Reserve Chairman Ben Bernanke warned that it is "far too early to declare victory" on the U.S. economy. According to a transcript of an interview with ABC obtained by Bloomberg, Bernanke reminded listeners that the jobless rate of the world's biggest economy is too high and that accommodative monetary policy is needed.


Stocks finished lower Tuesday after consumer confidence and home price data came in slightly off expectations. The market saw its worst week of the year last week before bouncing back Monday and trading mostly flat Tuesday.


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"We went back to the 1950s and found that the 17.7% rally since mid-December makes this roughly the 270th best rally in this time frame," wrote Dan Greenhaus, strategist with BTIG in a note Tuesday night. "While the S&P 500 was lower one month later roughly 45% of the time, six months later, the S&P 500 was lower after this type of a rally just 9.0% of the time."


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Germany's DAX closed down 1.1%, while London's FTSE shed 1%. The Hong Kong Hang Seng closed down 0.8%, while the Nikkei Average in Japan finished lower by 0.71% overnight.


In corporate news, Tyco International (TYC) said it will merge its flow control business with diversified industrial manufacturing company Pentair (PNR) to create an industry leader with an expected $7.7 billion in pro forma 2012 revenue.


The transaction values Tyco Flow at about $4.9 billion, including assumed net debt and minority interest. Upon completion of the transaction, Tyco shareholders will own about 52.5% of the combined company and Pentair shareholders will own roughly 47.5%. The deal is expected to add about 40 cents to Pentair's 2013 earnings per share.


Nokia (NOK) introduced its first smartphone design for China on Wednesday, hoping for a turnaround through the world's largest cellphone market. The struggling mobile phone maker said that the new Lumia 800C can run on China's CDMA networks and will be supported by China Telecom, a leading carrier in the country.


Bank of America (BAC) is assembling an international advisory board that would provide chief executive Brian Moynihan with guidance on global strategy, The Wall Street Journal reported, citing people familiar with the situation.

Apple (AAPL) will offer refunds to all buyers of the new iPad in Australia after the nation's consumer watchdog accused it of misleading advertising, according to reports. The Australian Competition and Consumer Commission demanded that Apple make consumers aware its third-generation iPad can't connect to a 4G mobile data network in Australia due to technical incompatibility, Reuters reported. Apple agreed to post warnings that its new iPad wasn't compatible with current Australian 4G LTE networks over the next week.


May oil futures were down $2.42 to $104.91. April gold futures were down $14.10 to $1,670.80 an ounce.


The dollar index up 0.27%. The benchmark 10-year Treasury was rising 4/32, diluting the yield to 2.17%.

Mar 28, 2012 8:19AM
Stuck in Kansas 

Ummmmm, could you give for us the name of just one Government program where the cost has ever come down?  
Mar 28, 2012 9:45AM
Sadly, most people don't understand what insurance is for.  Insurance is for hedging against the unforseen disaster, a concept known as "transfer of risk".  The reason that health insurance is so expensive is we have added routine things to the policies, things we know we will use, and people keep trying to add more.  Think of how much your car insurance would cost if it included oil changes, filling the gas tank, and regular scheduled maintenance.  That is what we have done with health "insurance" and that's why the costs keep going up so fast.  When the employer pays, the employee wants everything covered, including the oil change and filling up the tank, and the cost goes out of sight.
Mar 28, 2012 10:52AM
Stocks were wavering Wednesday after a read on domestic durable goods orders fell short of expectations.
Why can't these clowns understand that we don't have money to spend anymore because we have to buy gas and groceries?That takes the whole paycheck. I work for a multimillion dollar company and for the last 2 months our sales are off by over 2 million dollars, people don't have the money to buy things that they don't HAVE to have. I don't care what they say on here, the economy is not growing like they say it is. They can tell you anything, how many people have the resources to prove what they say is true? All they need to do is look back on other post and see how much they contradict themselves. It's comical anymore to read the stuff that is being told to us. Sure we will never get back to the way we use to be but we will never progress as long as oil, gas and food prices stay the way they are. I can't believe that we have people like we do trying to run our country, open your eyes,listen to the working class and you will see why we are struggling. I thought Obama was for the middle class people, what a joke! We have less than we did before and working more, except for the millions that he has put on food stamps and welfare. What happened to the American dream? Work hard, save money and retire and enjoy the rest of your life. That too is a joke! It is a shame that we have let our leaders put this great country in the shape it's in right now. We the people have got to band together and take back what was once ours. Get gas prices back to where we can afford them and have money to spend on things to get people back to work and get our jobs back in this country where they belong.  IT'S ALL ABOUT THE OIL!!!!!!
Mar 28, 2012 10:45AM



Take car insurance....  Should the Federal government FORCE everyone to have car insurance?  Even those without cars?    How about the Federal government limiting Food for all those 20 lb's overweight?   How about just banning smoking?   Of course, we saw the results of the government banning liquor.  


How about we SHRINK government, and restore some ECONOMIC LIBERTY and FREEDOM?

Mar 28, 2012 9:34AM

When someone gets government help for food, we don't expect them to be able to just buy steak and lobster (insert government cheese joke here).


When someone gets government assistance in getting housing, we don't expect them to live in a mansion, we just hope it's not a slum.


When someone uses public transportation, they take a bus or the subway, we don't buy  them a Ferrari or a Porsche.


But for some reason, when we talk about health care, everyone should get the best care possible, regardless of cost.  What makes people think that a plan like this is realistic, much less economically feasable?

Mar 28, 2012 10:48AM
my 2 cents on the healthcare debate.  No matter what side you're on, isn't ironic the ones deliberating and making the decisions have the BEST FREE medical insurance provided by the taxpayer and most so wealthy could private pay if they had to without a serious impact to their earnings.
Mar 28, 2012 12:00PM
My truck is almost paid off. Guess what? Since I do my own maintenance on a regular basis. My 06 Dodge still runs like a topp. NO NEW vehicle for me.  It has a V6 and is decent on gas. Most consumers held out on making big purchases like a car or truck has long has they could.  Has for medical expenses they will continue to RISE as long has big Pharma and hospitals pay there CEO"S ridiculous amounts for salaries.  For a nation with so much, why do we have such a high infant mortality rate? The answer is GREEDY PIGS in big business are making it so working poor can not afford medical insurance.  I will be paying $400.00 a month for mine before 2014. When I got my job ten years ago. My cost was $45.00 a month.  Makes me sick to know some cream puff that looks down on me for going to a real job everyday. Thinks he deserves $250,000,000.00 a year salary. They will one day rot in hell for what they are doing to us all.  
Mar 28, 2012 10:41AM

Disgusted American, you aare so correct about the healthcare system.  Prior to Medicare and Medicaid, healthcare in the US was 6% of GDP, today it is over 17%. 


The government, through Medicare and Medicaid price fixing, has systematically eliminated low cost providers and fixed the prices very high.  As long as the government is deciding "Fair" prices for medical service, prices will be twice as high as any other country, and the service less than stellar.


Without the Free Market in healthcare, we are left with 2 bad choices.  Bankrupting us with the existing system, or socializing what is left of medical care, insuring Post Office quality service, IRS compasion, EPA like regulation, and Public Eduication accountablity for complete failure.


If we must have government provided healthcare for all, then EVERYONE must pay for it, and the system NEVER be allowed to run a deficit.   Some people feel this would be an improvement.


I cannot help but laugh...

Mar 28, 2012 10:32AM

Endeavor, it it the courts far left extremist judges that are the problem.   How can they rule that Congress has the right to compel you yo buy something under the guise of "regulating interstate commerce", when healthcare insurance cannot even be sold across state lines?


If the government can compel you to buy something from a PRIVATE party against your will, then you have zero economic freedom remaining. 


The court is supposed to INTERPET the exisiting constitution, not make up "rights" not mentioned in the document.


It is the far left judges that make things up that fit their socialist agenda. 

Mar 28, 2012 9:22AM
Who is the real Deklen?  When did you quit school?  9th grade?  Maybe earlier.  Are you paid by the Democrat party to parrot the opposite of everything you read?   It would not hurt to use logic and reasoning, but I do not believe you have the ability.  That is why I question your education level.  
My name deklen.  Democrat good! republican bad!  Republican make deklen so angry!!!   Smash Smash keyboard.
Mar 28, 2012 10:14AM

@Stuck in Kansas


So, you make very negative assumptions about someone you don't like, and then ask to be proved wrong?  So "Are you now or have you ever been a Communist?  Prove me wrong!" is a good question too, by your standards.  Nice to hear a liberal defending McCarthyism!

Mar 28, 2012 9:56AM

@Stuck in Kansas


and are probably racist and homophobic
What did he say that brought that out?  Or is it your automatic reply to someone you disagree with?
Mar 28, 2012 11:07AM
Welfare is full of growth. Man, wife and four kids. Divorce the wife and she goes on welfare. Free medical, dental, food stamps, half off the rent, free money, and perks on utilities plus more. Ex husband now lives there as boy friend. The most successful person in town is the welfare administrator with her fancy clothes and new government car. Cut this money out of the economy and down you go. The Obama change is a phony economy based on socialist, communist ideals.
Mar 28, 2012 8:49AM

How is it that mandatory health insurance is going to change the insurance companies into something other than than "only interested in profits"?  That's like believing oil companies will lower gas prices because the price of oil went down.


Mar 28, 2012 8:53AM
Stuck ..... 

You remind me of an old saying:  "sometimes wrong, but never in doubt"   
Mar 28, 2012 11:05AM

I think it's funny that the democrats keep trying to cap the pay of doctors, but never want to cap the pay of the lawyers.  Apparently the most important part of the health care system is the malpractice lawyers.  It makes me want to tell them, if they break a bone, have a lawyer set it for them!  There is plenty to complain about in the health care system, but a lot of it stems from trying to show that everything possible was done.  Like VolckerFan said, it takes the cost benefit analysis out of the equation.

Mar 28, 2012 9:38AM

I know so much about health care and insurance because I've been providing it to my employees for 30 years now, and have been intimately involved with it.


I follow the politics fairly closely because what the government does impacts not only my business, but my employees. 


Our problems with healthcare began with a very hot political potato Medicare and Medicaid, back in the 60's and the government felt they should pay doctors bases upon the 75th percentile.  This began an upward and uncontrolled spiral of escalating medical costs that continues to this day.


We've created a society that believes we can do or not do whatever we want, eat, drink whatever and as much as we want, and when we get sick, take a pill or get a shot and continue on with our lives, and there are deep insurance pockets to pay for it all.


Doctors are compensated for what they do and not the outcomes -so they do more.  Cut the doctors pay, and they simply treat more to offset the loss.  All this additional treatment comes with risk and cost, that is born by Medicare, Medicaid, and the Insurance Industry, which is passed on to employers.


Neither Romneycare nor ObamaCare addresses the glaring problems with our healthcare system that were created by our government.   The add more to it.  The solution is not more insurance, but less.  And there must be market reforms on the Health CARE industry.


Yes, some countries with single payer systems have lower costs and their population is healthier.  Why?  Quite simply, you'd better never get sick, because their health care systems sux.


I know so much about Massachusetts because I spend a considerable amount of time there.  My business often takes me there plus I have a summer home on Cape Cod.

Mar 28, 2012 11:34AM
Why is that everyone in favor of Obamacare/Romneycare​ always cites extreme examples of healthcare - stage 4 cancer, open heart surgery, hip replacements, brains surgery, etc...  This isn't the real issue, but if it was, pass a 3 page bill that subsidizes catastrophic coverage for everyone over the age of 40 - it would be way easier and way cheaper than the 2500 page bill we got.  But of course they'd never do this, because Obamacare/Romneycare​ isn't really about good health or saving money, it's about power and control.
Mar 28, 2012 10:43AM



All paid for by other people's money.  Partner's Healthcare is the largest employer in the state.  20% of the state employed in the healthcare industry.   Plenty of defense work too -Raytheon doing quite well.  Teddy and Tip O'Neil laid the groundwork for many years to come.


Massachusetts has somewhat insulated itself from many of the woes of the rest of the country, all paid for with other people's money

Mar 28, 2012 10:18AM
boy this board went south right out of the gate today, didn't it?
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