Where things stand after Friday's slump
Stocks tumble as Republicans balk at House Speaker Boehner's tax bill. But things could have been worse. Nike jumps on strong North American business. Trading ends early Monday, and markets are closed Tuesday for Christmas.
The Dow Jones industrials ($INDU) fell 121 points to 13,191. The Standard & Poor's 500 Index ($INX) dropped 14 points to 1,430, and the Nasdaq Composite Index ($COMPX) dropped 29 points to 3,021.
These were the worst losses for the major averages since Nov. 14. But there was more to the market than the losses alone. Here's what else you should know.
The losses could have been much worse. The Dow was down about 189 points around noon ET. The S&P 500 had dropped as many as 21 points. Futures trading overnight had forecast much bigger losses. So, the market's losses did attract some bargain hunting that trimmed the worst of the losses by about a third.
Look for a lot of volatility next week. Volume will be lower because many traders and money managers will take the week off. Plus, there are hopes some sort of bill can be crafted to minimize the potential effects of some $600 billion in taxes and government spending cuts. If someone starts to buy or sell heavily, the changes get magnified. But the moves may mean little until after the New Year. What happens in January may depend on how the fiscal cliff is resolved. The stock market closes Monday at 1 p.m. for Christmas Eve and will be closed Christmas Day.
The market finished higher for the week. The Dow was up 0.4%, with the S&P 500 up 1.2% and the Nasdaq up 1.6%. Put Friday's loss with the gains for the week, and you have a lot of investors still convinced that a fiscal cliff deal will get done. It may also mean that the economy may be stronger than anyone thinks and tough enough to weather much of the cliff's effects. What's the proof? Check the Dow Jones Transportation Average ($DJT), watched closely as a leading economic indicator. The index rose 3% on the week; all of its components were higher. The index is up 9% this quarter alone.
Stocks are still looking at a decent 2012. The Dow is up 8% for the year. The S&P 500 is up 13.7%, and the Nasdaq is sporting a 16% gain. December may show gains as well.
Nike was a big winner. Nike (NKE) was up $6.10 to $105.10, second-best among S&P 500 stocks. Late Thursday, the company reported fiscal-second-quarter earnings that beat Street estimates. The driver of the results was its North American business, which saw a 17% gain in revenue for the quarter. More important, the region also generated a 14% gain in orders for the fiscal third quarter.
Could Apple's slide be coming to an end? Apple (AAPL) finished down $5.30 to $516.43 on Friday after falling to as low as $510.24 right after the open. The shares were higher in after-hours trading. Here's why the shares may be bottoming: They fell to as low as $501.23 on Monday and never came close to that level again. Moreover, the shares have come close to $500 three times since mid-November and held each time. Admittedly, that's not much solace for someone who bought Apple in mid-September. The shares are down 26.4% since their Sept. 19 closing high of $702.10.
Gold moved higher. That reflects worries about what the collapse of the Boehner effort means. Gold (-GC) finished at $1,660.10 an ounce, up $14.20. But it was down 2.2% for the week and 7.6% since hitting a closing high of $1,796.50 an ounce on Oct. 4. Also moving lower: yields on Treasury securities, reflecting an interest in safety. The 10-year Treasury yield fell to 1.754% from Thursday's 1.8%. Crude oil (-CL), however, fell as traders feared that a slowing economy next year might cut into demand.
Yes, there were broad losses. Only two of the 30 Dow stocks showed gains on Friday: American Express (AXP) and McDonald's (MCD). Bank of America (BAC) and Exxon Mobil (XOM) were the Dow laggards. Research In Motion (RIMM) was the day's big loser, falling 22.7% to $10.91 after earnings and its forecast disappointed investors.
The US Economy is being played like a HUGE Pyramid Scheme or "Legal" Ponzi. The Fiscal Cliff is upon us. We watched the Madoff fiasco in horror but we will stand by and follow our government over the cliff?
We are in fact being played like little pawns. The media says, "Don't worry, everything is going to be fine".
The government and the Stock Market - all a big con, devised to extract all your money and squander it away on whatever they see fit to spend it on.
The middle class - What middle class??? It's already vanished.
Look at what happened in Africa, South Africa. Poor government leads to 50+% unemployment, crime with staggeringly violent stats.
Be careful America, there is absolutely nothing in this world that is FREE - You should work hard and in theory you should do well and be comfortable but those who think they can run off to DES or the unemployment office for free money, beware. Too many parasites being supported in this country currently.
Anyway Hanukkah is waning, and Christmas is upon us; And Kwanza for some, I hope all of you have nice Holidays....And our best Hopes going forward for a Prosperous New Year.....
Thank you Charley Blaine, for keeping us informed in 2012.
If that was our "Santa Rally" last week, He was drunk and ran his Reindeer into the Trees...
Gains of 60, 50, 15, and 25....were pitiful on the DOW,NAS,S&P and the RUT2K was a little brighter.
Not a great closing for the EOY....We have 3-4 days left for Redemption ???
Next week after the Holiday we will all be hanging 10 over the side of a precipice, with our nails bloodied, and a bunch of aholes threatening to whack our hands...
Prediction of an Eleventh Hour half azzed Deal, signed; Where everyone is pissed and will be altered and re-opened for addeums after the beginning of the year.
"Boehner's doing the right thing. In 10 years, people will shake their heads and grumble, "Why did we vote in Obama? He was such a snake oil salesman." You've been warned."
In 10 years, America will still be recovering from the worst crime ever committed. There won't be any GOP left and one state in America will be reconstituted as a prison for financial pariah. We will have a new currency and a new social structure that balances, not creates two classes. The middle will be the mark. The greatest challenge moving ahead is unplugging the Internet and destroying data warehouse facilities. Data is the new enriched uranium and the Internet is a highway for toxicity. In 10 years, the majority of button pressers will be vision-less and wanting financial support. Obama isn't a snake oil salesperson, but Boehner and his Party of No are certainly terrorists. We were attacked financially and it ruined us-- the Fiscal Cliff and Plan B are irrelevant, wiping out bad politics and those who fund it is critical.
Boohner is a goddamn fool for the Party he represents, and certainly not any Amercans..I know.
Big money, big lobbies, big wallets...
Really doubt he will have the job in 60 days as Speaker..?
He represents no one except "himself and his puppetmasters"....He is done.
Too bad he cannot be sent back to Ohio, permanently.
No Plan was offered, just a laundry list; That was best, left at home.
It was DOA, he knew it and so did everyone else.
A pitiful joke, so he and the other children could leave and go home to Momma for Christmas...
And brag how they had tried to do something, but FAILED...Because of everyone else.
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[BRIEFING.COM] The stock market finished the Thursday session on a higher note with the S&P 500 climbing 0.5%. The benchmark index registered an early high within the first 90 minutes and inched to a new session best during the final hour of the action.
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