Stocks stumble lower after early dive

The Dow falls more than 150 points, but clear bargain-hunting cuts the loss by about half. J.C. Penney slumps as a board fight gets ugly. Crude oil rises.

By Charley Blaine Aug 9, 2013 2:27PM
Stock market © Digital Vision/SuperStockUpdated: 4:34 p.m. ET

Stocks ended Friday lower but were well off their lows of the day as August, often one of the market's worst months of the year, began to spread its weird magic.

The declines were big enough that the market ended the week lower with the Dow Jones industrials ($INDU) showing a weekly loss after six weeks of gains.

The Dow was down as many as 152 points before bargain-hunters began to buy. The blue chips ended the day off 73 points to 15,426.

The Standard & Poor's 500 Index ($INX) was off 6 points to 1,691 after falling by as many as 11 points. The Nasdaq Composite Index ($COMPX), down 9 points to 3,660, had slid as many as 19 points early in the session.

The Dow fell 1.5% on the week, its first loss since the week ending June 14. The S&P 500 dropped 1.1%. The Nasdaq lost 0.8%.

For the year, the Dow is still up 17.7%, with the S&P 500 up 18.6% and the Nasdaq up 21.2%. That's up from an 8.1% gain for the Dow at this time in 2012, a gain of 11.8% for the S&P 500 and a 16% gain for the Nasdaq.

There were a host of issues weighing on stocks on Friday, including:

1,700 is a big problem for the S&P 500. The index closed above 1,700 on Aug. 1 but fell back on Tuesday -- after just three days. The index spent the latter part of July flirting with 1,700. Behavior like that suggests that small rallies also generate quick sell responses. They also suggest a market that could be topping.

Wall Street is obsessed with what the Federal Reserve will do in September. The central bank's policy-making body, the Federal Open Market Committee, meets Sept. 17-18, and many on Wall Street expect the Fed to announce it's trimming back its $85-billion-a-month bond buying program. The fear is that interest rates will rise and markets will turn lower in response. That's the fear. The reality is that 10-year Treasury, from which mortgage rates are derived, hit a peak of 2.74% at the end of last week and dropped back to 2.58% on Friday.

The Japanese yen is rising. A rising yen has tended to weigh on U.S. stocks, as my colleague Anthony Mirhaydari noted on Wednesday. The yen is up nearly 2.5% against the dollar this week.

The stock market has moved too far too fast. The S&P 500 is up 150% since the March 2009 market bottom. (The Dow is up 136.6%, with the Nasdaq up 188.5%.) Yes, there have been regular -- and sometimes nasty --  pullbacks during this run-up, but the market has consistently recovered and pushed higher. Worriers think maybe the streak will be broken.

Is the market in danger of collapsing? Not yet. True, only four of the Dow stocks were showing gains, led by Alcoa (AA), up 31 cents to $8.22. However, a touch less than half of the stocks in the S&P 500 were higher, led by iron-ore producer Cliffs Natural Resources (CLF), up $2.34 to $24.35; coal producer Peabody Energy (BTU), up $1.30 to $17.90; and audio company Harman International (HAR), up $3.89 to $68.79.

Cliffs Natural Resources rallied along with metals generally after Chinese industrial output expanded faster than expected.

A little less than half of the stocks in the Nasdaq-100 Index ($NDX) were higher. The index was down 12 points to 3,119; most of that loss was due to Apple (AAPL), down $6.56 to $454.45. The leaders were travel booking company Priceline.com (PCLN), up $36.14 to $969.89, and Amazon.com (AMZN), up $1.52 to $297.26.

Gap (GPS) was off $1.27 to $44.25. The company said July same-store sales rose less than expected.

J.C. Penney
(JCP) fell 78 cents to $12.88 as a battle over who should lead the company began to look like a mud-wrestling match. The retailer's largest shareholder, Bill Ackman's Pershing Square Capital Management, wants interim CEO Mike Ullman replaced now, along with Chairman Thomas Engibous. Ackman wants Allen Questrom, a former Penney chief executive and longtime retailing executive, to be the CEO.

Crude oil (-CL) in New York settled up $2.57 to $105.97 a barrel. Gold (-GC) was up $2.30 to $1,312.20 an ounce.

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71Comments
Aug 9, 2013 2:46PM
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 Are FED spokespeople befitting from giving their opinion?

They give their uncalled for opinion, stocks nosedive ... makes you suspicious.

Crude oil rises.--why?????
Aug 9, 2013 4:24PM
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The government needs to stop shoring up the market to give profits to the top investors.
Aug 9, 2013 6:16PM
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Wait until the winter months begin and all these seasonal employees are on unemployment  and he wants them to have healthcare. What a joke of a man, let alone a president! 
Aug 10, 2013 9:16AM
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There is NO SUBSTANCE to a "Federal Reserve" bought fake market. GDP is how things really roll. When you have a NATION of part time service workers that do not PRODUCE GOODS to sell. The means to the END will show up sooner than latter.  Soon the party will be over... 
Aug 9, 2013 3:56PM
Aug 9, 2013 7:23PM
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Hey Helicopter Ben!

Hey POTUS!

Hey bloggers!

 

Forget the market.

Forget 85Bill a month

Forget 17$ trillion.......I may regret that I said that.

 

It's about jobs and ....productivity in the workforce

.

I am really concerned regarding the of  above.

Aug 9, 2013 10:36PM
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It is not the governments job to control and push the market up buy pumping in 85 billion a month. they should just stop wasting our money. and let wall street pay off the debt they created. they are not creating any real jobs.
Aug 9, 2013 6:25PM
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Volume was ridiculously light today - 81 million shares on the Dow and 404 million on the S&P 500.  Just as the low-volume rally didn't mean much, the low-volume dip doesn't mean much either.  We should get a rebound when it becomes clear that Bernanke will inject another $85 billion in September.  Not much movement in the dollar either. 

This is just the last of the summer haze before we face all kinds of real issues and indicators - debt ceiling battle, more precise direction from the Fed, August jobs numbers, back-to-school retail sales results, Q3 GDP, etc...

Based on the lack of job creation and the dismal GDP, it appears that 2013 marks the 5th failed attempt at a "summer of recovery".
Aug 9, 2013 9:26PM
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Even better yet, Top Scott, how about a TOTAL government WITHDRAWAL from wall street? NO MORE BAILOUTS, NO MORE SUBSIDIES for politically connected corporations, NO MORE 85,000,000,000  per month in PHONY MONEY, and in case you don't have a calculator that's 1,020,000,000,000 per year. Why don't we do that? Then the REALLY STUPID idiots will crash and burn, lose all of their ill-gotten money, and ONLY the people who have any brains will be able to run a business, because if idiots try to, they'll be OUT of business within months. At least it will get rid of at least 50% of the wall street cock$uckers and vampires, and THAT will be an improvement.
Aug 9, 2013 3:34PM
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"The meek shall inherit the earth" but the thieves shall own it. The WS parasites are afraid of losing the free transfusion from the Feds so they are now toying with the various ways open to them for siphoning what "blood" is left from main stream America. The feeding frenzy should begin shortly. It will start slowly so as not to awake the useless congressional rubber-necking looky-loos.

Aug 9, 2013 8:25PM
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THE MARKET SHOULD TANK BELOW 9000 AND  F     L    UC    K THESE SPECULATING DOUCHE BAGS
Aug 9, 2013 10:31PM
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THIS  IS THE PART WHERE
"The excrement will make physical contact with an electric powered oscillating air current distribution device".

Aug 10, 2013 7:00PM
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Don't worry America ... Obama promises things will be much better by his Third but no later than his  Fourth Term.
Aug 10, 2013 4:05AM
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the only trouble with the  market  folding  is  the only ones  who will suffer  are the ones in  401k . who  can not  bail out   like the billionaires  and  millionaires  can  the  middle  class will be wiped  out   this is your  government  and  socialism  they  have control of your  money next the constitution  ect ect  this was all planned  25 years ago. if it is possible for people to roll there  401k into something  other  then the stock  market  you had better  hurry  up and  do it  now
Aug 10, 2013 10:10AM
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Curious to see what happens when the feds stop feeding it. Been good to help retirees who lost, but can't continue this forever. The market must be able to stand on its own.
Aug 10, 2013 7:02PM
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Obama promises more Food Stamps and a government monitored and supplied cell phone in every pocket.

Aug 10, 2013 6:50PM
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85 billion dollar bond purchases a month with a +16 trillion dollar national debt ... ponder on that for awhile folks.

Aug 10, 2013 7:03PM
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The DOW is up 136% since March 2009 ... problem is no one has any money to invest as no one has had a job in four years. Change You Can't Believe.
Aug 9, 2013 11:18PM
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Dear ex-Republican 1907. The only thing that has been up for the last four years are the government printing presses. Think I'm kidding. If the Fed even hints they may scale back the market losses 500+ points. Guess what's going to happen when they really do. 5000+ in one trading session!
Aug 11, 2013 12:33PM
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I sure am glad Barry and the gang can go on another taxpayer paid vacation. Clueless-Wonder will just continue to break our bank while mesmerizing his Obamazombies with useless rhetoric.

 

Obama-Worst President EVER.

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