Stocks get a housing lift; Facebook slumps

The Dow jumps 126 points. Facebook falls below $29. A new report suggests home prices are stabilizing. A downgrade of Spain pushes the euro lower. Research In Motion expects a first-quarter loss; shares sink after hours

By Charley Blaine May 29, 2012 12:07PM
Charley BlaineUpdated: 6:24 p.m. ET

Stocks rallied solidly today on hopes for housing, but Facebook (FB) was battered.

Shares of the social-networking site dropped $3.07 to $28.84. They're now a whopping 26% below $38, the price at which the shares went public on May 17. The stock fell on talk Facebook was in discussions to buy Oslo-based Opera Software (OPESY), developer of a browser for smart phones. Analysts said competition from Google (GOOG) and others could push the price tag of any deal above $1 billion.

In addition, there was new talk Facebook may be working to market a new smart phone.

Facebook's woes come as investors were cheered by a report showing more stability in the housing market. But worries about U.S. consumer confidence and a downgrade of Spanish debt combined to trim gains.

The Dow Jones industrials ($INDU) closed up 126 points to 12,581. The close was a nice rebound from 12,515, the level at 1:25 p.m. ET. The blue chips had been up as many as 157 points around 10:45 a.m. The Standard & Poor's 500 Index ($INX) was up 15 points to 1,332, and the Nasdaq Composite Index ($COMPX) had gained 33 points to 2,871.

Article continues below.
The Nasdaq-100 Index ($NDX), heavily influenced by Apple, gained 32 points to 2,559. Apple (AAPL), up $9.98 to $572.27, contributed more than eight points of the gain. Reports suggested a new Apple television might come out in time for Christmas.


While Facebook slumped, tech stocks overall were stronger, led by Apple, Microsoft (MSFT), Intel (INTC) and Qualcomm (QCOM). (Microsoft is the publisher of MSN Money.)


Ahead on Wednesday

Wednesday's market features reports on mortgage applications from the Mortgage Bankers Association of America and pending home sales from the National Association of Realtors. 


Thursday will bring reports on private-sector jobs from ADP, mass layoffs from Challenger Gray & Christmas and a major revision of gross domestic product.


On Friday, the Labor Department will report on payroll employment and unemployment. Also due are reports on May auto sales and the Institute for Supply Management's May manufacturing index.


Futures trading suggests a modestly lower open for U.S. stocks on Wednesday.


For the record, the Dow is down 4.9% for the month, with the S&P 500 off 5.1% and the Nasdaq down 6.5%. For the year, the blue chips are still up 3%, with the S&P 500 up 6% and the Nasdaq up 10.2%.


Research In Motion shares sag; company to explore options
After the close, Research In Motion (RIMM) announced it expects an operating loss for the fiscal first quarter. Analysts were projecting earnings of 43 cents a share, down from $1.33 a share a year ago.

The company also hired J.P. Morgan Securities and RBC Capital Markets to help the company in a strategic review.

The company did not say it has put itself up for sale, although many analysts believe it probably is looking for a buyer. Nor did it say it was considering asset sales.

Shares fell more than 11% to $9.93 after the statement was released. But the shares were $10.35 at 5:30 p.m. They had closed at $11.23, up 23 cents.

Multinational stocks boost market
Stocks of companies with heavy reliance on non-U.S. revenue also boosted the market, including IBM (IBM), Caterpillar (CAT), United Technologies (UTX) and 3M (MMM).

Crude oil (-CL) in New York and gold (-GC) were initially higher but fell back as the euro declined against the U.S. dollar.

The euro fell after Egan-Jones, a smallish rating agency, downgraded Spanish debt as confusion mounted about how the country planned to finance a bailout of its third-largest bank. The downgrade came after stock markets in Europe closed generally higher. Spain was the exception.

Polls suggested that Greece's New Democratic Party, which supports the country's remaining in the eurozone, would win the country's June 17 election.

Twenty-five of the 30 Dow stocks were higher, led by Caterpillar, Alcoa (AA) and United Technologies.

Energy was the top-performing S&P 500 sector. Tops in the index was Peabody Energy (BTU), the coal producer, after an upgrade, followed by financial services company Genworth Financial (GNW), defense contractor SAIC (SAI) and Chipotle Mexican Grill (CMG).

Chesapeake Energy (CHK), the large and troubled natural-gas and oil producer, was up 54 cents to $16.35. Activist investor Carl Icahn announced a 7% stake in the company last week.

 

A total of 451 stocks in the S&P index were higher today.
 
Meanwhile, 68 stocks in the Nasdaq-100 were higher, led by Chinese Internet travel site Ctrip.com International (CTRP) and Avago Technologies (AVGO) and NetApp (NTAP),

Energy prices -- New York close



Tues.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$90.76

$90.86

-13.45%

-8.17%
(per barrel)











Heating oil (-HO)

$2.8132

$2.8329

-11.65%

-3.47%
(per gallon)











Natural gas (-NG)

$2.485

$2.627

8.75%

-16.86%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8335

$2.8317

-9.32%

6.63%
(per gallon)











Brent crude 

$106.68

$107.55

-10.76%

-0.65%
(per barrel)











Retail gasoline

$3.6360

$3.6410

-4.72%

10.99%
(per gallon; AAA)












Crude oil and gold move up
Crude oil in New York settled down 10 cents to $91.76 a barrel. Brent crude was off 18 cents to $106.65 a barrel.

The national average price of gasoline was $3.636 a gallon, according to AAA's Daily Fuel Gauge Report. That's down from $3.666 on Friday and down 7.6% from its peak of $3.936 a gallon in early April.

The gain in oil prices was the catalyst for rising prices for energy stocks.

Gold settled down $20.20 to $1,548.70 an ounce.

Interest rates were lower, with the 10-year Treasury yield falling to 1.731% from 1.745% on Monday.

Signs of stability emerge in home prices
The Standard & Poor's Case/Shiller Home Price Index of 20 cities for March fell 2.6% from a year ago, as expected by economists surveyed by Reuters, after a 3.5% decline in February. But month-over-month, home prices rose in most major U.S. cities for the first time in seven months, up a modest 0.09%.

Some markets, including Charlotte, Denver, Dallas and even Phoenix, saw prices gain on a year-over-year basis. 

Prices hit new lows in Atlanta, Chicago, Las Vegas, New York and Portland, Ore.

There have been modest signs of improvement in recent reports on existing-home sales and housing starts.

Homebuilding stocks were generally higher. The Philadelphia Housing Sector Index ($HGX) was up 3.14 points to 129.04.

A drop in consumer confidence?
The Conference Board said its read on consumer confidence for May fell to 64.9, the lowest of the year, from a downwardly revised 68.7 in April. Economists expected a reading of 70. Americans have become less hopeful about labor market and business conditions.

The report seems at odds with a University of Michigan report last week suggesting confidence is building.

Ian Shepherdson of High-Frequency Economics said much of the decline was prompted by lower stock prices. But gasoline prices are lower, which should improve consumer moods.

But IHS Global Insight's Chris Christopher was gloomier. "Consumer confidence is having a very tough time getting out of recession territory," he wrote this morning. "Consumers face too many head winds such as high debt burdens, depressed home prices, a lack of confidence in the government's ability to make things better, volatile equity markets, and rising student loan balances."

Short hits from the markets -- New York close



Tues.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0800%

0.080%

-11.11%

700.00%
5-year Treasury note 

0.764%

0.762%

-5.80%

-7.95%
10-year Treasury note

1.731%

1.745%

-9.61%

-7.48%
30-year Treasury bond

2.842%

2.846%

-8.59%

-1.63%
Currencies











U.S. Dollar Index

82.581

82.52

4.73%

2.56%
British pound

1.5640

1.5691

-3.71%

0.66%
(in U.S. $)

 








U.S. $ in pounds

£0.639

£0.637

3.85%

-0.65%
Euro in dollars

$1.25

$1.25

-5.70%

-3.59%
(in U.S. $)

 








U.S. $ in euros

€ 0.801

€ 0.797

6.04%

3.72%
U.S. $ in yen 

79.68

79.48

-0.40%

3.35%
U.S. $ in Chinese

6.36

6.34

0.92%

0.52%
yuan











Canada dollar

$0.977

$0.977

-3.58%

-0.41%
(in U.S. $)

 








U.S. dollar 

$1.024

$1.023

3.72%

0.41%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,548.70

$1,568.90

-6.94%

-1.16%
(per troy ounce)

 








Copper (-HG)

$3.462

$3.448

-9.60%

0.76%
(per pound)

 








Silver (-SI)

$27.7910

$28.368

-10.40%

-0.44%
(per troy ounce)

 








Wheat (-ZW)

$6.5675

$6.8000

0.34%

0.61%
(per bushel)

 








Corn (-ZC)

$5.6250

$5.785

-11.31%

-12.99%
(per bushel)

 








Cotton 

$0.7271

0.7272

-18.67%

-20.69%
(per pound)

 








Coffee

$1.6790

1.7025

-6.49%

-26.89%
(per pound)

 








Crude oil (-CL)

$90.76

$90.86

-13.45%

-8.17%
(per barrel)










 

88Comments
May 29, 2012 1:01PM
avatar
Home prices stabilizing ? Must be on planet VENUS.   4 million homes in some stage of default or foreclosure ! A shadow inventory of another 3 million homes held by the (TBTF) Criminal Banking Cartel. Yes I would say HOME PRICES ARE STABILIZING ?
May 29, 2012 2:36PM
avatar
Contrary to what the Street Staff wants to report on housing.  The facts are that with very few exceptions..the housing market SUCKS and that's the TRUTH!!  The majority of existing homes that are selling are at deep discounts due to short sales, foreclosures and other bank owned properties.  Even the high end luxury market of $1 million and above are selling way below asking price.  So I wish the Street Staff would stop hyping up the real estate market as today's saviour for the market because the housing market is in the tank and heading lower!
May 29, 2012 1:28PM
avatar
Not seeing much of anything in housing market.    Work in the real estate industry twenty six years and the NY market doing nothing.  Some areas still declining in value.   Can see that some of the better towns stable but towns that are in the middle doing nothing in terms of sales.  tons of listing and minimal sales in the past six months.   need to get rid of high unemployment and the banks have to ease up on requirements.  Small group of banks investment controlling the industry right now.   smaller investment banks can't get in the game as big banks getting free money from the government.   Federal Reserve policies killing housing recovery. 
May 29, 2012 2:33PM
avatar

I think all the Street reporters should be replaced with people that are less biased on being pro-stock market and replace them with people who challenge the reports, numbers etc. to extract the truth and then report the truth.  The current Street Staff are nothing more than a bunch of puppet-heads!!

May 29, 2012 1:39PM
avatar
Who in the heck are these manipulative "investors" and what happened to the 150 point gain we had going into late morning.  By the end of the day I wouldn't be surprised if the market was in the red.  What a bunch of bull$hit!!!  The "investors" will find any excuse to bolden their bait and switch game.
May 29, 2012 2:30PM
avatar

"Egan-Jones, a smallish rating agency, downgraded Spanish debt as confusion mounted about how the country planned to finance a bailout of its third-largest bank"

 

Typical Street Staff comment about the agency being "smallish" as to diminish the relevancy of the Spanish debt being downgraded.  This is such bias journalism.  I suppose if Moody's downgraded the the debt then it would be OK??

May 29, 2012 2:56PM
avatar

"home prices rose in most major U.S. cities for the first time in seven months, up a modest 0.09%."

HAHA charley always has these BS articles to try to make his hero obama look better.

 

Lets see .09% rise in price on a $150,000  home is a gain of $15  wow

common moonbat libs thumbs down

ROFLMFAO

May 29, 2012 12:56PM
avatar

"They" have already backed themselves into a corner...they being the 'obvious' manipulators' and MSNBC 'cronies.  Even a few more conservative networks are 'buying' in as knowing their 'positions' with the 'parent' company is getting weaker and weaker.  No volume other than same 'manipulators' churning your money in 401K's and pension plans. 'They' have painted themselves into that proverbial corner and your plans mentioned above are getting total attacked right now.  Nice.....  Yeah, now a new post giving a read about 'consumer confidence'...that sure changed quick.  Next...what a bunch of BS.

May 29, 2012 3:09PM
avatar
"A new report suggests home prices are stabilizing"

Ya, and a guy who hasn't breathed, or had a heartbeat, in several days, could be referred to as "stabilizing" too. He's dead, but he's stable!!!!!!!!
May 29, 2012 12:50PM
avatar

So how do you screw up consumer confidence exactly, and have to "revise" it down.  I mean, you take a survey, apply calculations, and get the answer.  Do these folks suck at math?  Did some survey takers call taking bout "I changed my mind"? 

May 29, 2012 2:05PM
avatar
Breaking news................................. Law enforcement agencies have indicated that local, state and federal jails and prisons are now at full capacity due to the nationwide increase in blue collar crimes. Speculators are betting that blue collar crimes will increase further, in turn taking the heat off of their own white collar criminal activities resulting in furtther speculation and manipulation of the market.. Market should be up 50 today in preparation for the tomorrow drop of 68. WAFJ
May 29, 2012 4:32PM
avatar
Unemployment has stabilized.......... Way too high
Gas Prices have stabilized.................Way too high
Home Prices have stabilized..............Way too low

So all this other stuff NOT GETTING BETTER, is a reason for the Market to go up why??????
May 29, 2012 4:28PM
avatar

The most encouraging thing in this article is that people lack confidence in the government's ability to make things better.  The next step is to gain confidence in their own ability to make things better.  Back in the early 1990's, a 20 year old kid that used to help me bale hay would borrow his parents' pickup truck and chain saw and drive around some of the wealthier suburbs after thunderstorms and offer to clean up the downed trees and branches in their yards.  He was making $20/hour and everyone was happy. 

Forget the government.  Take a look around you and see what needs doing and start doing it for a price that's fair to you and the customer.

May 29, 2012 1:10PM
avatar
Since we warned at 1115 hrs that the first wave of selling was called we have been drifting lower....Gave back half of the gains already and still a long way to go...We dont make this up people, just call it as we see it....Manipulators slowly but surely taking over on and off the floor...We see plenty of these scumbags and they have been sitting on their hands since the opening bell ready to do their thing, that's why the 150 some point lead didn't last long at all....Oh well, we know cheating still pays a lot on Wall Street....More after the close.
May 29, 2012 4:13PM
avatar

"Home prices stabilizing ? Must be on planet VENUS."

 

I just called my realtor and asked if this was true.  She told me only one market is hotter, Mercury, and advised me it was a great time to buy.

May 29, 2012 3:03PM
avatar

Investors cheer MSN Market Dispatches= More B.S= SMOKE AND MIRRORS= MARKET ONE BIG PONZI SCHEME=SCREW THE SMALL INVESTOR !

May 29, 2012 3:21PM
avatar
I just bought a house in Dallas.   125K   4 years ago it sold for 315K    Maybe I should not have bought another house.  I think the U.S.  economy is going to hell.  We need some big changes now, or at lease by November.    Now tell me again  how the housing market is doing so well.
May 29, 2012 3:04PM
avatar
The crooks that caused the declines in housing prices and created the high foreclosure rates are the same one's that are now buying up the houses for rentals, etc...... once these parasites gain control of most of the housing market and prices finally start to rise they will start the bubble BS all over again - there is no stopping them now, they smell blood once again.  
May 29, 2012 9:36PM
avatar
What do Facebook stockholders and Obama Voters have in common?


(:(:Buyer's Remorse :) :)
May 29, 2012 2:28PM
avatar
Up over 150 on China stimulation. Up now due to housing.
The houses in China? 
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