Stocks trim gains as Apple pulls back

The Dow enjoys a 78-point gain, but the Nasdaq goes negative as Apple and Amazon.com slide. The Institute for Supply Management says manufacturing gained some momentum in September. Google's market capitalization moves past Microsoft's.

By Charley Blaine Oct 1, 2012 12:38PM
Charley BlaineUpdated: 8:21 p.m. ET

October exploded out of the starting blocks, giving investors every expectation of a huge rally powered by a surprising gain in U.S. manufacturing and surging European markets.

But the rally faded into something more ambivalent. For that we can blame Apple (AAPL), Amazon.com (AMZN), Starbucks (SBUX) and Microsoft (MSFT), all of which fell 1% or more. (Microsoft is the publisher of MSN Money.)

The Dow Jones industrials ($INDU) finished up more than 70 points, but roughly 30% of that gain was due to IBM (IBM), which hit an all-time high of $211.75 before closing at $210.47. But the Nasdaq Composite Index ($COMPX) saw a 31-point gain in the morning collapse into a small loss.

The pullback came as the dollar moved up against the euro, forcing commodity prices to give up gains. In addition, Federal Reserve Chairman Ben Bernanke didn't surprise investors much in an Indianapolis speech, except to say he expected interest rates to remain low even after the economy strengthens. His overarching concern is to get the jobs market moving again.

The Dow finished at 13,515, up 78 points. The blue chips had been up as many as 161 points. The S&P 500 gained 4 points to 1,444 -- but had been up more than 16 points. The Nasdaq fell 3 points to 3,114 after that early 31-point gain.

Article continues below
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 5 points to 2,794. But 54 of the stocks in the index were higher. The issue was Apple, down $7.71 to $659.39. Apple is the biggest influence on the index.

After the close, the New York State Attorney General Eric Schneiderman sued JPMorgan Chase (JPM), alleging that a business acquired in its 2008 takeover of Bear Stearns Cos. fraudulently marketed and sold mortgage-backed securities.

JPMorgan said it would fight the suit, saying the activities in question occurred before JPMorgan took over Bear Stearns. Still, JPMorgan shares were off 42 cents, or 1%, to $40.55 after hours; the shares had closed up 49 cents to $40.97 in regular trading.

Auto sales on tap in a busy week
Tuesday brings an important reports on auto sales for September. Futures trading suggests a modestly lower open for stocks.

This is a busy week for economic reports. On Wednesday, the Institute for Supply Management releases its September report on non-manufacturing. Payroll process ADP reports on private-sector employment growth.

On Thursday, the government reports on jobless claims and factory orders, while Challenger Gray & Christmas reports on mass layoffs. Friday brings the very important September report on unemployment and payroll growth as well as a Federal Reserve Report on consumer credit outstanding.

A rally with staying power? Maybe not yet
A big caveat with today's trading: Much of the early rally may well have been due to short-covering as traders who had sold borrowed shares, betting the market would move lower in the past week, started to buy them back to lock in profits. The selling may have been investors who had big profits from the rally that started in June.

You could see some skepticism about the markets. The 10-year Treasury yield was at 1.625%, down from Friday's 1.637%. If the rally were about improving prospects, you would expect stocks to pull money away from bonds and thus push interest rates higher.

The rally comes after stocks moved modestly lower last week as investors were startled by riots in Spain and Greece over the imposition of new austerity measures to try to solve their debt problems.

But September was a winner for U.S. stocks. The Dow was up 2.7% with the S&P 500 up 2.4% and the Nasdaq up 1.6%.

Gold and oil see early gains fade
Gold (-GC) reached as high as $1,794.40 an ounce, its highest level since November, before pulling back to $1,783.30, up $9.40. Gold is up 13.8% this year and was up 10.6% in the third quarter.

Crude oil (-CL) in New York settled up 29 cents a barrel to $92.48 after climbing to as high as $93.33. Brent crude was down 12 cents to $112.20 a barrel.

Natural gas (-NG) for November delivery settled at $3.480 per million British thermal units after hitting $3.486, its high for the year, on expectations of very cool weather in the Northeast and Midwest.

The national average price of gasoline was at $3.782 a gallon, down slightly, according to AAA's Daily Fuel Gauge Report.

One factor weighing on gold and oil was that the U.S. dollar had recovered from early lows.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$92.48

$92.19

0.31%

-6.43%
(per barrel)











Heating oil (-HO)

$3.1358

$3.1592

-0.74%

7.60%
(per gallon)











Natural gas (-NG)

$3.4800

$3.3200

4.82%

16.43%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9201

$2.9201

0.00%

9.89%
(per gallon)











Brent crude 

$112.19

$112.39

-0.18%

4.48%
(per barrel)











Retail gasoline

$3.7820

$3.7830

-0.13%

15.45%
(per gallon; AAA)












ISM view on manufacturing brings some cheer
The good news by far today was the ISM manufacturing index, which rose to 51.5 from 49.6 in August. Most economists had expected little change.

The rebound "will boost hopes that some of the recent slowdown in economic growth was just a summer phenomenon," Paul Dales, senior U.S. economist at Capital Economics, wrote in a client note today.

While the manufacturing index brought cheer, a Commerce Department report said construction spending slipped 0.6% in August from July, although up 6.5% from a year ago. While residential construction is showing improvement, private nonresidential spending fell 1.7%, and public construction spending was down 0.8%.

Apple still getting buffeted
Apple's 4.7% decline last week was set off by lower-than-hoped-for sales of the new iPhone 5 and glitches in its mapping program so annoying that CEO Tim Cook had to apologize about them. It appeared the concerns about the iPhone haven't gone way.

Google (GOOG), meanwhile, closed up $7.28 to $761.78, and its market capitalization of $249.1 billion exceeded that of Microsoft for the first time. Microsoft, whose market cap was $246.40 billion, was off 27 cents to $29.49 after a downgrade to "sector perform" from RBC Capital Markets.

3M (MMM) agreed to acquire Ceradyne (CRDN) for $35 a share -- a 43% premium over its Friday close. Ceradyne makes advanced ceramics used in defense, industrial, energy and automotive applications. The deal has an aggregate value of about $860 million, including debt, 3M said. Excluding one-time costs, 3M said, the acquisition will add about a penny a share to the company's in the first 12 months after the deal closes. 3M was up 87 cents to $93.29. Ceradyne was up $10.54 to $34.97.

Nokia
(NOK) and Oracle (ORCL) are expected to announce a deal that will give Oracle's customers access to Nokia's mapping service. Nokia was up 18 cents to $2.76. Oracle added 21 cents to $31.67.

The U.S. Defense Department on Friday awarded United Launch Alliance, a 50-50 joint venture of Lockheed Martin (LMT) and Boeing (BA), a $1.17 billion contract to provide satellite launches using its Delta IV and Atlas V rockets. Lockheed Martin was up 6 cents to $93.44. Boeing added 42 cents to $70.01.

Lastly, we should note that Yahoo (YHOO) CEO Marissa Mayer gave birth Sunday night to a boy. Mayer had disclosed she was pregnant when she took the Yahoo job in July. She plans to take a maternaty leave of a few weeks but will work through it. Mayer is in the midst of reorganizing the company.

Yahoo shares were down 15 cents to $15.83.

Twenty-six of the 30 Dow stocks ultimately finished with gains on the day. United Health Group (UNH) was the leader, up $1.05 to $56.46, followed by American Express (AXP) and Bank of America (BAC). The laggards were Microsoft and Caterpillar (CAT).

Meanwhile, 293 S&P 500 stocks were higher, led by for-profit education company DeVry (DV), Integrys Energy (TEG) and Tyson Foods (TY). The laggards were Sprint Nextel (S) and Molson Coors (TAP).

Of the 54 Nasdaq-100 gainers, Research In Motion (RIMM) and Fastenal (FAST) were the leaders. Chinese Website Baidu (BIDU) and Micron Technology (MU) were the laggards.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0800%

0.090%

-11.11%

700.00%
5-year Treasury note 

0.620%

0.630%

-1.59%

-25.30%
10-year Treasury note

1.625%

1.637%

-0.73%

-13.15%
30-year Treasury bond

3.032%

3.032%

0.00%

4.95%
Currencies











U.S. Dollar Index

79.909

80.025

-0.14%

-0.76%
British pound

1.6134

1.6160

-0.16%

3.84%
(in U.S. $)

 








U.S. $ in pounds

£0.620

£0.619

0.16%

-3.70%
Euro in dollars

$1.29

$1.29

0.28%

-0.52%
(in U.S. $)

 








U.S. $ in euros

€ 0.776

€ 0.778

-0.28%

0.52%
U.S. $ in yen 

78.13

77.97

0.20%

1.33%
U.S. $ in Chinese

6.31

6.28

0.40%

-0.32%
yuan











Canada dollar

$1.018

$1.017

0.13%

3.77%
(in U.S. $)

 








U.S. dollar 

$0.983

$0.984

-0.06%

-3.64%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,783.30

$1,773.90

0.53%

13.82%
(per troy ounce)

 








Copper (-HG)

$3.786

$3.758

0.73%

10.17%
(per pound)

 








Silver (-SI)

$34.9520

$34.5770

1.08%

25.21%
(per troy ounce)

 








Wheat (-ZW)

$8.8425

$9.0250

-2.02%

35.47%
(per bushel)

 








Corn (-ZC)

$7.5675

$7.563

0.07%

17.05%
(per bushel)

 








Cotton 

$0.7120

0.7065

0.78%

-22.34%
(per pound)

 








Coffee

$1.7805

1.735

2.62%

-22.47%
(per pound)

 








Crude oil (-CL)

$92.48

$92.19

0.31%

-6.43%
(per barrel)










 

433Comments
Oct 1, 2012 2:08PM
avatar
The administration;

Barack ( I like wearing knee pads in the middle east) Obama
Joe ( Somebody please cut out my tongue, so there's more room for my foot) Biden
Harry (The Rodent) Reed
William ( I know I lied about the guns, but how do I look?) Holder
Nancy (you'll have to pass it so you can see what's in it) Toolosi

And some of you want round 2 of this????? Amazing.........

Oct 1, 2012 1:07PM
avatar
Just watch, unemployment claims will be down and the national rate will go down .1% while the labor paticipation rate will fall again. And the minions will tell you it's all because people are in such great financial shape that they can afford to retire, and lots of them early too!!
Oct 1, 2012 1:08PM
avatar
"People who pride themselves on their "complexity" and deride others for being "simplistic" should realize that the truth is often not very complicated. What gets complex is evading the truth.”

- Thomas Sowell
Oct 1, 2012 2:32PM
avatar

September 27, 2012.  US manufacturing slumps as orders for durable goods plunge. 

 

You tell me.

Oct 1, 2012 2:01PM
avatar
Manufacturing is doing really well. They are paying less employees so less payroll. They are producing less so they have less energy cost. All is wonderful.
Oct 1, 2012 1:11PM
avatar

Here we go 'a la Obama'...as my neighbor is saying:

 

"the truth is often not very complicated. What gets complex is evading the truth”

 

What is worse is cover up the Truth for political reasons...

Oct 1, 2012 2:32PM
avatar
Obama tells 60 minutes last night that Israel and Iran is "just noise". 

Completely out of touch. The next noise he is likely to hear is the mushroom cloud.
Oct 1, 2012 2:25PM
avatar
No time to meet with World Leaders. There's too much money that needs to be raised.

Now there's a leader with his priorities straight. LMFAO!
Oct 1, 2012 2:34PM
avatar
"Americans must be wondering how much more of this 'recovery' they can afford. New figures from the Census Bureau's Current Population Survey, compiled by Sentier Research, show that the typical American household's real (inflation-adjusted) income has actually dropped 5.7 percent during the Obama 'recovery.' Using constant 2012 dollars (to adjust for inflation), the median annual income of American households was $53,718 as of June 2009, the last month of the recession. Now, after 38 months of this 'recovery,' it has fallen to $50,678 -- a drop of $3,040 per household. Yet it gets worse. Amazingly, incomes have dropped even more during the 'recovery' than they did during the recession. In fact, they've dropped more than twice as much as they did during the recession. From the start to the end of the recession, the real median income of American households fell $1,413, or 2.6 percent. From the end of the recession to the present day, it has dropped $3,040, or 5.7 percent. This begs the question: What kind of 'recovery' compares unfavorably with the recession from which it's ostensibly recovering?" --The Weekly Standard
Oct 1, 2012 2:03PM
avatar

Lets be serious and non judgemental for a bit.  If our present Congress,Senate, and Executive branch were really true about taking care of all of us; mostly and including the middle class, would they not immediately introduce trade regulations that would end this free trade nonsense to employ our masses and reinvigorate our tax base.  You see to me this is soooo simple. So lets remove partisan politics for but a moment, put your reality glasses on, and concentrate real hard.  We are being effed over by our own guberment. Da.  They are introducing the New World Order on us and we have nothing we can say or do about it. We are paying the price so they will look like heros to the rest of the world. If it was oh sooo good for us they would have bragged it up. And if it isn't good for us they would lie about it like they are now.  There will be no housing recovery, no jobs recovery, and they are sabotaging our financial markets and we all will be very much poorer very soon.  You can not print money and inject  money in a market like this and have it survive.

Chaos is now upon our financial sectors.  They are no longer connected to any form of reality like any of us know. A new currency will be adopted in the next few years or months. I bank on it!

Oct 1, 2012 3:41PM
avatar

The danger to America is not Barack Hussein Obama but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America. Blaming the Prince of the Fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools such as those who made him their President.

Oct 1, 2012 3:04PM
avatar
We've had a phony bull market for 5 years, with 22% unemployment..............wonder how much longer it can last?
Oct 1, 2012 4:15PM
Oct 1, 2012 2:30PM
avatar
"The Congressional Budget Office has forecasted a fresh recession to hit next year if Taxmageddon, a nearly $500 billion tax increase, hits the nation and Congress and the President drive us off the 'fiscal cliff.' ... 

Think about this: If you're a middle-class American family, Taxmageddon means that your taxes are going up about $4,100 next year. ... It starts to hit home that you have to come up with that $4,100 somehow. You're going to have to make cuts in your lifestyle to be able to pay this tax increase. ... As Foster said, 'President Obama should demand that Congress return to defuse Taxmageddon, and Congress should immediately heed his call. The job need only take a few days away from their campaigning.'" 
Oct 1, 2012 1:12PM
avatar
Just Friday certain reports were saying the manufacturing sector was down 13%, now all of a sudden things are fine?????  The market amoeba must have very short memories.
Oct 1, 2012 1:25PM
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Obama sounds like an old time "dishonest preacher"...........preaching to Americans from his pulpet!!!! The bible sometimes calls them ......."woves in sheep's clothing" !! This IS what I believe!  Needy people....are very  susceptible to this type of  behavior/actions!!!
Oct 1, 2012 1:09PM
avatar
Will you tell Bernanke to SHUT UP ... he is no communicator ...
Oct 1, 2012 1:43PM
avatar
Same old smoke an switch . One week it 's bad data next week new report says they gain ???  How can it go from the bottom to the top so fast??  You guys must have a hell of a magic wand to fix all so quickly !!!  Have talk to friends in different plants around here , all say the same thing we will probably layoff soon!  ORDERS ARE DOWN!!!!!!!!!!!!!  COME ON TELL US THE TRUE FACTS FOR ONCE !!!!!!!
Oct 1, 2012 12:52PM
avatar
OH BOY!!! another staged rally that does NOTHING to help America. Wall Street... unhappy until you destroy the nation completely?

Where do you go once you've screwed the whole world? YOU will be going. What a bunch of losers.

Oct 1, 2012 4:05PM
avatar
Don't blame Apple for the market's decline ... it began as Bernanke spoke ... get it right
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