Dow off 33 as stocks bide time for Bernanke
Apple hits a new high after its big patent win over Samsung. The market overall is little changed as Wall Street waits for Fed Chairman Bernanke's speech on Friday. Several deals excite traders. Oil falls despite hurricane threats.
Stocks ended the day little changed as those investors who aren't at the beach were waiting to see if the Federal Reserve will try to stimulate the economy in the next few months.
It was a day where there was a lot movement in stocks that might be affected by Apple's (AAPL) big patent victory over Samsung Electronics last week. Apple hit a new high of $680.87 before falling back to $675.68, up $12.46.
Google (GOOG), which many now see as vulnerable to a patent suit from Apple, was down $9.41 to $669.22. Nokia (NOK) and Research In Motion (RIMM) were up because investors saw them as avoiding Samsung's problems.
Meanwhile, there were deals to interest investors. IBM (IBM) announced a $1.3 billion acquisition of business-software maker Kenexa (KNXA). Kenexa jumped $13.40 to $45.79. Big Blue was off $2.08 to $195.69. Buffalo's M&T Bank (MTB) bought Hudson City Bankcorp (HCBK) for $3.7 billion. And Hertz (HTZ) said it will buy Dollar Thrifty Group (DTG) for $1.3 billion.
The Dow Jones industrials ($INDU) fell 33 points to 13,125; the blue chips had traded in a range of 54 points. The Standard & Poor's 500 Index ($INX) closed down 1 point to 1,410. The Nasdaq Composite Index ($COMPX), however, finished up 3 points to 3,073.
Article continues below. The Nasdaq-100 Index ($NDX) gained 5 points to 2,783, thanks mostly to Apple. It briefly hit a new 52-week intraday high of 2,794. Its finish was just below its 2012 closing high of 2,784.42 on April 2.
Tiffany (TIF) jumped $4.21 to $62.71, even though its second-quarter results missed Street estimates. Instead, the market focused on the company's assertion that, after a stagnant third quarter, growth will resume in the fiscal fourth quarter
Best Buy (BBY) shares rose 56 cents to $17.87 after the retailer agreed to let former CEO Richard Schulze look at the company's books. Schulze has been trying to organize a syndicate to buy out the company. The company also offered Schulze two board seats unless he makes a formal offer for the company.
AOL (AOL) climbed 94 cents to $33.86. The company said it is returning $1.1 billion to shareholders in a special dividend and will buy back some $600 million in stock.
Tuesday's market will pay close attention the S&P/Case-Shiller Home-Price Index and The Conference Board's monthly report on consumer confidence.
Key earnings are due from H.J. Heinz (HNZ) and Brown Shoe Co. (BWS), operator of the Famous Footwear chain.
Futures trading suggests U.S. stocks will open modestly higher on Tuesday.
|Energy prices -- New York close (updated)|
|Mon.||Fri.||Month chg.||YTD chg.|
|Crude oil (-CL)||$95.47||$96.15||8.41%||-3.40%|
|Heating oil (-HO)||$3.1195||$3.1187||9.53%||7.04%|
|Natural gas (-NG)||$2.6530||$2.7020||-17.33%||-11.24%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.9500||$2.9105||6.33%||11.01%|
|(per gallon; AAA)|
Bernanke and Draghi weigh on markets
Ben Bernanke, chairman of the Federal Reserve Board, and European Central Bank President Mario Draghi are the reasons the market moved so little today.
Bernanke is scheduled to speak Friday's at the Fed's annual retreat at Jackson Hole, Wyo., and many traders have been hoping he will signal the Fed will start another round of bond buying to boost the domestic economy.
Problem is, the Fed is divided on the subject, both because some don't think it will work and because some believe the move will be seen as political. Plus, the economic data have been a bit stronger lately.
Draghi, who speaks on Saturday, may be more important because of what he might say about how the ECB and European plans to get its debt crisis under control.
The Jackson Hole retreat has become an important event because Bernanke has used it to suggest where the Fed may be headed in the months afterward. The Federal Open Market Committee, the Fed's policy-making body, meets Sept. 12-13 and may announce a stimulus plan.
The minutes from the last Fed meeting on July 31-Aug. 1 suggested the central bank was just about ready to make a big move based on weak data that flowed during the month. But the data have been better since then, particularly on housing and retail sales.
There is considerable speculation that stocks could fall sharply if the Fed does not move on a new round of so-called quantitative easing -- buying in Treasury securities. It's not clear that a sell-off will happen if the Fed doesn't move. The Dow and S&P 500 are not especially overbought right now. The Nasdaq is -- because of Apple.
But there are other concerns that could derail the market. Europe's debt crisis is potentially quite dangerous, and some markets are weak.
China's economy is weak enough that the government announced a $1.26 trillion stimulus package. The Shanghai Composite Index closed today at levels last seen in early 2009 and is off 40.8% from its post-crash high of 3471.44, set on Aug. 4, 2009.
Apple wages an 'economic war'
Apple shares were higher because investors believe the company's dominance in smart phones and tablet devices is now rock-solid after its patent win over Samsung.
Victories in patent disputes over phones using Google’s Android may extend, rather than end, the litigation that’s lasted more than two years and spanned four continents, Bloomberg News said today. Friday's jury verdict came shortly after a trade agency in Washington cleared Apple of some claims by Google’s Motorola Mobility that could have led to a U.S. ban on the iPhone and iPad.
Together, the decisions may well embolden Apple to continue the campaign envisioned by the late Steve Jobs to prove that phones running on Android copied the iPhone’s features and designs. Apple won’t stop unless there’s a decisive blow against it, and Samsung, with its reputation at stake, also has little incentive to settle, patent lawyer Tom Scott told Bloomberg News.
"Most commercial disputes are on the merits of the case," said Scott, a partner at Goodwin Procter and chairman of its intellectual property group in Washington, D.C. "This is different. It’s a war. It’s an economic war."
There is one great irony from the Apple-Samsung lawsuit. Samsung is the sole supplier of Apple-designed chips that power the iPhone and iPad. And it's likely to stay that way.
Crude oil moves lower despite Isaac
Meanwhile, crude oil (-CL) settled down 68 cents to $95.47 a barrel in New York after falling to as low as $94.41.
The decline comes even as Tropical Storm Isaac has entered the Gulf of Mexico and is expected to become Hurricane Isaac, probably tonight. The storm track suggests the storm will make landfall near New Orleans seven years after Hurricane Katrina struck.
The storm already has forced the Republican Party to postpone the opening of its 2012 convention in Tampa, Fla., for a day.
Oil companies are shutting in production platforms in the Gulf of Mexico. The gulf is the source of some 24% of U.S. domestic crude oil supplies.
Brent crude, the benchmark North Sea oil, was down $1.52 to $112.47 a barrel.
The national average retail price of gasoline was at $3.75 a gallon, according to AAA's Daily Fuel Gauge Report, up two cents from Friday and 7.1% in August alone.
Gold (-GC) for December delivery settled up $2.70 to $1,675.60 an ounce. Silver (-SI) had added 49.4 cents to $31.115 an ounce. Copper dropped slightly to $3.4765 a pound.
The dollar was little changed against major currencies.
Interest rates were down slightly, with the 10-year Treasury yield at 1.647%, down from Friday's 1.678%.
Utilities, staples stocks lead the market
This was a day for defensive stocks: utilities with dividends and staples stocks. The Dow Jones Utilities Average ($UTIL) finished up slightly, with Williams Companies (WMB) and Dominion Resources (D) the leaders.
Consumer staples stocks were strong, led by Procter & Gamble (PG), Wal-Mart Stores (WMT) and Costco Wholesale (COST).
While the averages were basically flat, there was a downside bias to stocks. Only 10 of the 30 Dow stocks were higher, led by Cisco Systems (CSCO), McDonald's (MCD) and United Technologies (UTX).
Hewlett-Packard (HPQ), Alcoa (AA) and Bank of America (BAC) were the laggards.
Only 192 S&P 500 stocks were higher, led by Hudson City Bancorp, Tiffany and Valero Energy (VLO). The laggards were Robert Half International (RHI), Alpha Natural Resources (ANR) and Cliffs Natural Resources (CLF).
Apple was the top Nasdaq-100 index, followed by Research In Motion and F5 Networks (FFIV). But only 31 of the stocks in the index had gains on the day. The laggards: Maxim Integrated Products (MXIM) and Electronic Arts (EA).
|Short hits from the markets -- New York close (updated)|
|Mon.||Fri.||Month chg.||YTD chg.|
|13-week Treasury bill||0.1000%||0.090%||0.00%||900.00%|
|5-year Treasury note||0.679%||0.704%||13.36%||-18.19%|
|10-year Treasury note||1.647%||1.678%||10.39%||-11.97%|
|30-year Treasury bond||2.755%||2.792%||6.91%||-4.64%|
|U.S. Dollar Index||81.691||81.603||-1.23%||1.45%|
|(in U.S. $)|
|U.S. $ in pounds||£0.633||£0.632||-0.78%||-1.69%|
|Euro in dollars||$1.25||$1.25||1.75%||-3.40%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.799||€ 0.799||-1.72%||3.52%|
|U.S. $ in yen||78.86||78.67||0.95%||2.29%|
|U.S. $ in Chinese||6.38||6.35||0.35%||0.86%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|Silver (-SI)||$31.048 ||$30.621||11.23%||11.22%|
|(per troy ounce)|
|Crude oil (-CL)||$95.47||$96.15||8.41%||-3.40%|
Can't wait for the Democratic National Convention!
An impeached President that was not removed is the key note speaker, and politicians that abandoned their own party are also speakers as well as an actress living and working in a made up world......
LMFAO! Who will give the final address? Too bad Dr. Kevorkian is dead, he would be perfect! He could talk about how good Obama's heath care will be! Possibly even head up the "end of time care"............
Lets hope they have a Mayor and a Governor who will listen to the evacuation notice this time in New Orleans.Let the looting commense!
Markets waiting on Bernanke to announce free monies ---
Pretty much tells the whole story the stock market is one big ponzi scheme about ready to collapse.
Only thing keeping it going is free money from the Federal Reserve and soon the Federal Reserve will be powerless as the BRICS have dumped the dollar as the World's Reserve currentcy.
The end is near folks maybe this year for certain next year.
"On the surface, the stock market is waiting for Bernanke -- Ben, that is -- and prices are struggling to hold on to early gains."
Yes, that's all that props up the economic dead horse that is America'; artificial inputs from Ben's overworked printing press. More worthless life support dollars heaped onto our debt load that cannot be paid backs. Let's dig an even DEEPER hole. And the 'market' thinks this is a good idea??? That is how bad things really are. If Ben starts printing, if I was China I'd dump everything with USA on it and cut my losses.
You are right TIWIT, I do want a Nation not dependent upon its corrupt Government for retirment, health care, education, housing, and meals!
Quite opposite of what you desire.
Some excellent comments here and by the "same" few that recognize the dilemma we are in as a nation. What I fail to understand is why the "medias" do not report why the "race" is a virtual dead heat?
And, that will not change. It is very simplistic. Half of the nation is on "welfare" of one sort or the other. They absolutely "demand" that money, period. Now, who would you vote for? Of course, we all know that answer. What I find entirely ridculous is that women continue to support this guy. They (medias) should break that factoid down a bit further into age groupings and that would tell you why and it goes back to above said about "welfare" types. Have a nice day!
Rather than helping out those in the toughest shape, it looks like Democrats ended up helping their supporters, including unions and many very wealthy supporters.
Even within states much of this money went to relatively well-to-do public sector unions and wealthy Democrats worth hundreds of millions of dollars or billions of dollars. Billionaire Democrat donors who received a lot of money from the Obama administration include: Solyndra owner George Kaiser; Tesla Motors owners Leon Musk, Larry Page and Sergey Brin; NRG Energy owners Warren Buffett, Steven Cohen, and Carl Icahn; Abound Solar Manufacturing’s Pat Stryker; and Siga Technologies’ Ronald Perelman. Among other wealthy Democrat winners were former Vice President Al Gore whose investment in Fisker Automotive was rewarded with a $529 million loan guarantee. All together about 75 percent of loans and grants have been given out to companies run by Obama supporters.
Read more: http://www.foxnews.com/opinion/2012/03/23/where-did-stimulus-money-really-go/#ixzz24mBgr8Ig
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