Dow drops 258 as 4th quarter starts with a thud
Stocks crumble as fears build that Greece will default and recession is inevitable. European and US bank stocks fall. US manufacturing and auto sales are fairly strong. Crude oil drops again; gold moves higher.
By Charley Blaine on Mon, Oct 3, 2011 2:22 PM
Updated: 6:32 p.m. ETStocks closed at their lowest levels in more than a year today, continuing the weakness that has plagued the market for months.
The big issues: continuing worries that Europe's banking and financial system faces dire threats from Greece's debt problems, fear of a slowing economy in China and the threat of a new recession in the United States.
Investors ignored decent U.S. auto sales in September and upticks in construction spending and manufacturing as the U.S. economy was signaling that reports of its demise may be premature. Many analysts believe, however, that a recession is near.
Crude oil (-CL) was lower as the concerns about the global economy grew. Gold (-GC) and U.S. Treasury bonds gained (and interest rates moved lower) as investors sought safety.
The Dow Jones industrials ($INDU) were off 258 points, or 2.4%, to 10,655. The Standard & Poor's 500 Index ($INX) was down 32 points, or 2.9%, to 1,099. The Nasdaq Composite Index ($COMPX) was off 80 points, or 3.3%, to 2,336. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 54 points, or 2.5%, to 2,085.
Article continues below.The losses were the third for the Dow and S&P 500 in four sessions and fourth in a row for the Nasdaq. Stocks are coming off a weak September and a miserable third quarter, the worst quarter since the 2008-09 financial crisis.
The slide today on the S&P 500 -- its lowest close since Sept. 8, 2010 -- was especially bothersome. The index fell below 1,101.54, which had been its intraday low since the market peak on April 29. That could signal a continuing decline to 1,050.
The Dow's close was its lowest since Sept. 17, 2010. The Nasdaq's close was its lowest since Sept. 23, 2010. The Dow is off 8% for the year, with the S&P 500 down 12.6% and the Nasdaq off 12%.
The indexes are off 16.8%, 19.4% and 18.7%, respectively, since peaking on April 29. A decline of 20% is the definition of a bear market; the S&P 500 is nearly there.
Tuesday's market will contend with a report on factory orders and earnings after the close and earnings from Yum! Brands (YUM). Futures trading suggests a flat open on Tuesday.
Gold moves up, crude drops
Gold settled up $35.40 to $1,657.70 an ounce. Silver (-SI) rose 71.2 cents to $30.795 an ounce. Copper (-HG), however, dropped slightly to $3.1505 a pound.
Crude oil settled down $1.09 a barrel to $77.61 in New York, its lowest close since Sept. 10, 2010. Brent crude in London settled down $1.05 to $101.71. That the lowest close for Brent since Feb. 15.
Crude is off 31.9% since peaking at $113.93 a barrel on April 29. Retail gasoline was at $3.417 a gallon, AAA's Daily Fuel Gauge Report said. That's down 14.3% since peaking at $3.985 a gallon.
The dollar was higher against the euro and the pound but lower against the yen. The U.S. Dollar Index, which measures the greenback against a basket of currencies, rose to 79.94. It ended the day up 0.8% for the year. That's the first time the index has been up for the year since Jan. 14.
| Energy prices -- New York close | ||||||||||||
| Mon. | Fri. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $77.61 | $79.20 | -2.01% | -15.07% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $2.7529 | $2.7793 | -0.95% | 8.22% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $3.6170 | $3.6660 | -1.34% | -17.89% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.5110 | $2.5381 | -1.07% | 2.36% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $101.71 | $102.76 | -1.02% | 7.35% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.4170 | $3.4240 | -0.81% | 11.23% | ||||||||
| (per gallon; AAA) | ||||||||||||
AMR heading for bankruptcy?
The market worried as American Airlines parent AMR (AMR) fell 33.1% to $1.98 on reports it might be filing for bankruptcy. Circuit breakers halted trading today as many as six times.
Investors are concerned that American, the third-biggest U.S. airline, will burn through its cash reserves without deeper cuts in costs and seating capacity, aviation analyst Ray Neidl told Bloomberg News. The shares touched the lowest price since March 31, 2003, and had fallen 62% this year before today.
More than 200 pilots have retired from AMR in the last two months, compared with a typical monthly dozen, news reports say.
The worries about AMR hit rival carriers as well. US Airways (LCC) tumbled 15.8% to $4.63; Delta Air Lines (DAL) was down 11.3% to $6.65; and United Continental Holdings (UAL), the parent of United Airlines and Continental Airlines, dropped 11.7% to $17.11. Southwest Airlines (LUV) slid 8.6% to $7.35.
Also today, Citigroup analysts cut their ratings on US Airways and United Continental.
European debt situation gets worse
The Greece situation moved from awful to seriously bad late Sunday when the government said its deficit this year would be close to 8.5% of its gross domestic product. The country needs to cut its deficit to 7.6% of its GDP to keep receiving aid from the International Monetary Fund, the European Union and the European Central Bank.
The news pushed European stocks lower, with European banks especially pressured. Shares of Dexia, a Belgian-French bank, slid as much as 14% on worries that it will need a second bailout from France and Belgium. It is reported to have the greatest exposure to Greek bonds. France's Societe Generale (SCGLY) fell 7.3% to $4.85. BNP Parisbas (BNPQY) was down 7.9% to $18.15.
The worries spread to U.S. banks. JPMorgan Chase (JPM) was down 4.9% to $28.65. Morgan Stanley (MS) was off 7.7% to $12.47. It is believed to have some sizable exposure to Europe.
Bank of America (BAC) was down 9.6% to $5.53, a 52-week low. The bank announced last week it wanted to impose a $5 fee for use of its debit cards. The banking giant's website was down again today after crashing on Friday.
The KBW Bank Index ($BKX) was down 4.8% to 33.65, a 52-week low.
Pretty strong auto sales
The news on auto sales: not bad. Total deliveries were up 9.9% from a year ago and 1.7% from August. The seasonally adjusted sales rate of 13.1 million vehicles was the best since April and third-best monthly sales rate of the year.
General Motors (GM), Ford Motor (F) and Chrysler Group said September U.S. sales rose more than analysts’ estimates. GM and Chrysler sales were helped by stronger-than-expected sales of Silverado pickups and Durango sport-utility vehicles.
Ford said its light-vehicle sales increased 9% to 174,860. GM said its deliveries rose 20% to 207,145 cars and light trucks in the U.S. last month. Chrysler sales climbed 27% to 127,334, according to a regulatory filing.
Volkswagen (VLKAY) and Nissan (NSANY) also reported sales gains of 36% and 25%, respectively. Toyota (TM) and Honda (HMC) reported lower sales, but Kia and Hyundai reported gains.
Analysts have said September light-vehicle sales will probably rise to a seasonally adjusted annual rate of 12.8 million. That would be the fastest pace since April, when production slumped after Japan's March 11 earthquake and tsunami crimped supply of parts and finished cars.
U.S. manufacturing is still growing
The good news on U.S. manufacturing, according to the Institute for Supply Management today, is that it's still growing. But the growth rate has slid substantially from spring.
The ISM's Manufacturing Index came in at 51.6, up from August's 50.6. A reading above 50 signals growth. But the index is down from a high of 61.4 in February, just before the Japanese earthquake.
The report "demonstrates that the economy hasn't fallen off a cliff (at least not yet)," wrote Paul Ashworth of Capital Research in Toronto. But the report also suggests an economy that experiencing anemic growth at best, he added.
Michael Darda at MKM Partners was more downbeat. New orders are running below inventories for the fourth consecutive month, he noted. Next, China’s September purchasing managers' index showed the second-weakest month-to-month change on record. And September tends to be a seasonally strong month.
And then of course there are the stressed-out credit and financial markets.
Not a lot to cheer about
Only one of the 30 Dow stocks was higher: Wal-Mart Stores (WMT), up 0.1% to $51.96. Bank of America was the laggard.
Meanwhile, 13 S&P 500 stocks were higher, led by cigarette-maker Lorillard (LO), up 2% to $112.94, and Yahoo (YHOO), up 2.7% to $13.53. Over the weekend, Jack Ma, the CEO of Alibaba, said he'd be interested in buying the Internet company. Yahoo owns more than 40% of Alibaba.
Yahoo was also the best-performer among Nasdaq-100 stocks. Only four stocks in the index were higher. The others were Research In Motion (RIMM), Activision Blizzard (ATVI) and Vodaphone (VOD). The laggard was Micron Technology (MU), down 14.1% to $4.33.
| Short hits from the markets -- New York close | ||||||||||||
| Mon. | Fri. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0100% | 0.020% | -50.00% | -91.67% | ||||||||
| 5-year Treasury note | 0.875% | 0.965% | -9.33% | -56.60% | ||||||||
| 10-year Treasury note | 1.785% | 1.924% | -7.22% | -45.99% | ||||||||
| 30-year Treasury bond | 2.761% | 2.921% | -5.48% | -36.70% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 79.937 | 79.075 | 1.09% | 0.82% | ||||||||
| British pound | 1.5470 | 1.5579 | -0.70% | -0.87% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.646 | £0.642 | 0.70% | 0.87% | ||||||||
| Euro in dollars | $1.33 | $1.33 | -0.58% | -0.85% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.754 | € 0.749 | 0.59% | 0.86% | ||||||||
| U.S. $ in yen | 76.86 | 77.13 | -0.34% | -5.53% | ||||||||
| U.S. $ in Chinese | 6.40 | 6.38 | 0.28% | -3.31% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.955 | $0.955 | 0.04% | -4.80% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.053 | $1.047 | 0.57% | 5.60% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,657.70 | $1,622.30 | 2.18% | 16.62% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.151 | $3.152 | -0.05% | -29.15% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $30.7950 | $30.0830 | 2.37% | -0.46% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.1950 | $6.0925 | 1.68% | -22.00% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $5.9250 | 5.925 | 0.00% | -4.82% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.9921 | 1.0019 | -0.98% | -31.49% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $2.2345 | 2.289 | -2.38% | -7.09% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $77.61 | $79.20 | -2.01% | -15.07% | ||||||||
| (per barrel) | ||||||||||||
158Comments
24 seconds ago
2 minutes ago
One truth that I can state is that the President will still be the President on January 1, 2013. Don't be lead a stray by those that are so ignorant that they do not even know that Inauguration Day is January 20th. Obviously, those making such posts need compassion and understanding, considering that they call 8th grade senior year!
2 minutes ago
3 minutes ago
17 minutes ago
9/11 was a conspiracy to take away our rights to privacy and start a world war against so called terrorists. Washington DC wants to rule the world like Hitler tried to.
Obamanism is out to destroy the value of the dollar so the world will go to a one world currency, which will be a plastic card, that will lead to a one world government.
Congress will not listen to the American people. Corporations and special interest lobbyists need to barred from politics. If corporations are a person than what am I?
Anyone working for the Federal Government should be paid minimum wage. Politicians included.
Obamanism is out to destroy the value of the dollar so the world will go to a one world currency, which will be a plastic card, that will lead to a one world government.
Congress will not listen to the American people. Corporations and special interest lobbyists need to barred from politics. If corporations are a person than what am I?
Anyone working for the Federal Government should be paid minimum wage. Politicians included.
22 minutes ago
Since we all are just rambling on about different objectives and are straying from the topic of our current woes, what about future woes of inflation? Is my current investment dollars going to sustain enough gains to offset this possible scenario or is a break even proposal in 15 years of letting my money set in mutual funds going to actually produce any retirement income? Good thing I am well diversified because at least something will offset my losses.
29 minutes ago
34 minutes ago
34 minutes ago
If bank of america fails the usa will be done every small and mid size companies that have there credit lines there will go b/k with in a few weeks to a month unemployment will hit around 26 to 28 % it will be game OVER other banks don't have the means to take other companies right now for credit lines so they will close permanently
35 minutes ago
36 minutes ago
Gary A Smith: Officially, Obama's last day is January 20th, 2013 at noon. That day happens to fall on a Sunday in 2013, so even though the new president will be sworn in that day, protocol requires that he be publicly sworn in the next day, which will be Monday, the 21st.
I still gave ya a thumbs up, and yes, we will survive ;-)....and thrive once he's out of office.
I still gave ya a thumbs up, and yes, we will survive ;-)....and thrive once he's out of office.
36 minutes ago
37 minutes ago
39 minutes ago
40 minutes ago
DAY AFTER DAY I READ ALL OF THESE POST AND REALIZE THAT MOST PEOPLE HAVE NO CLUE HOW TO TRADE STOCKS, MANAGE A 401-K OR HOW THE ECONOMY WORKS. OIL IS DOWN BECAUSE OF THE LACK OF DEMAND FROM MANUFACTURERS , GASOLINE IS STILL HIGH BECAUSE WE ALL LOVE OUR CARS,TRUCKS, AND TRAVELING ALONE EVERYWHERE WE GO. GROCERIES STAY HIGH BECAUSE WE HAVETO EAT. EVERYTHING WORKS ON SUPPLY AND DEMAND, AND THE MORE DEMAND THE HIGHER PRICES GO. AMERICA IS THE BEST COUNTRY IN THE WORLD, LIKE ALL COUNTRYS WE HAVE A FISCAL PROBLEM THAT NEEDS FIXING , THE FIRST THING OUR GOV SHOULD DO IS STOP WASTING MONEY ON NEEDLESS THINGS AND IDEAS. THE REST WILL TAKE CARE OF ITSELF OVER TIME.
40 minutes ago
Read quickly because they pull the plug on this post when I did it last week.
Did you know Michele O. lost her license to practice law in 1993 - in Chicago...But no one knows the reason. Look it up yourself and see...
Good luck and truth hunting. You know politicians run from the truth, well most of them.
Did you know Michele O. lost her license to practice law in 1993 - in Chicago...But no one knows the reason. Look it up yourself and see...
Good luck and truth hunting. You know politicians run from the truth, well most of them.
41 minutes ago
I repeat as an employer:
GREASE IN THE ECONOMY equals LOWER TAXES. ALSO, get rid of Unions and stop paying unemployment as these are the biggest SUCKERS of our economy. If YOU don't have a JOB, FIND ONE WHICH SUITS YOU...one at YOUR level....
It has nothing to do with Republicans, just with the situation we are facing.
One day YOU will be OLD and I hope there will not be money for you to retire then and ONLY then maybe, just maybe YOU will realize your lack of common sense....
GREASE IN THE ECONOMY equals LOWER TAXES. ALSO, get rid of Unions and stop paying unemployment as these are the biggest SUCKERS of our economy. If YOU don't have a JOB, FIND ONE WHICH SUITS YOU...one at YOUR level....
It has nothing to do with Republicans, just with the situation we are facing.
One day YOU will be OLD and I hope there will not be money for you to retire then and ONLY then maybe, just maybe YOU will realize your lack of common sense....
47 minutes ago
box 007 spews forth: GREASE EQUALS LOWER TAXES, GET RID OF UNIONS AND STOP PAYING UNEMPLOYMENT.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Hey box 007 that's what the Republicans have been doing for the last decade, it didn't work, time to make another selection.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Hey box 007 that's what the Republicans have been doing for the last decade, it didn't work, time to make another selection.
49 minutes ago
Hey there's a bright side, oil dropped some more causing gas to drop down to $3.19 a gallon in my podunk little town with one station reporting $2.99 in Nashville. Thats something more than 80% of the people in the country can enjoy. Lower price for gas means more money in mom and pop stores and retail or groceries instead of big oil.
The market will go up tomorrow, they're looking for fresh money. Today's just chumming. They'll reel in some big ones in a day or so.
The market will go up tomorrow, they're looking for fresh money. Today's just chumming. They'll reel in some big ones in a day or so.
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Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Gradient Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Telekurs.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
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MARKET UPDATE
| NAME | LAST | CHANGE | % CHANGE | |
|---|---|---|---|---|
| # | DOW | 10,655.30 | -258.08 | -2.36 |
| # | NASDAQ | 2,335.83 | -79.57 | -3.29 |
| # | S&P | 1,099.23 | -32.19 | -2.85 |
| # | Russell 2000 | 609.49 | -34.67 | -5.38 |
| # | 10 Yr Note | 103.31 | +1.56 | +1.54 |
[BRIEFING.COM] The first session of the fourth quarter saw plenty of selling pressure. The effort culminated in a sharp loss for stocks, which settled at new 52-week lows. ... More
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| NAME | LAST | CHANGE | % CHANGE |
|---|---|---|---|
| Euro/Dollar | 1.31926 | -0.00017 | -0.01 |
| Pound/Dollar | 1.54321 | -0.00119 | -0.08 |
| Dollar/Yen | 76.80492 | +0.17492 | +0.23 |
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LATEST MARKET DISPATCHES
- Dow drops 258 as 4th quarter starts with a thudStocks crumble as fears build that Greece will default and recession is inevitable. European and US bank stocks fall. US manufacturing and auto sales are fairly strong. Crude oil drops again; gold moves higher.
- Gold climbs as bargain buying kicks off new quarter
- Auto sales soared in September
- Kodak shares plunge on bankruptcy worries
- Stocks tumble on US data, Greek debt
- Stocks to watch: General Motors, Kodak
- Will October bring investors relief?
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Why Costco is walloping Wal-Mart
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