There's No Business Like FOX Business
The markets tumbled Friday afternoon as a series of conflicting economic reports underscored the tenuous state of the recovery and threatened to send Wall Street to its longest losing streak since the beginning of September.
Today’s Markets
As of 2:41 p.m. EDT, the Dow Jones Industrial Average fell 18.14 points, or 0.19%, to 9689.45, the Standard & Poor's 500 slid 3.86 points, or 0.37%, to 1046.92 and the Nasdaq Composite sank 12.53 points, or 0.60%, to 2094.90. The consumer-friendly FOX 50 lost 2.98 points, or 0.39%, to 766.84.
Stocks have been shoved in one direction or the other by the slew of economic reports, which have allowed the bears to stay in control and could push the markets to a rare down week. A report showing consumer sentiment in September climbed to its best level since the beginning of the recession has been overshadowed by new data revealing the steepest monthly decline in durable goods orders since January and new home sales rose by less than expected in August.
Coming on the heels of a disappointing housing report on Thursday, the mixed batch of data help explain why the Federal Reserve has been apprehensive to signal its intent to raise rates. Still, the markets have bounced off their lows and the losses have been relatively modest.
“From a data point of view it doesn’t look great. People think the market is really ahead of itself but for some reason there is no pullback,” said Frank Davis, director of sales and trading at LEK Securities. “The market continues to be resilient. It’s hanging tight.”
Most of the Dow's 30 components were stuck in the red, led by American Express (AXP) and Alcoa (AA). The index's biggest percentage gainers were its defensive members, including Merck (MRK) and McDonald's (MCD).
The potential three-day slide would be the markets’ longest slump since a four-day selloff that ended on Sept. 2. Up until this point, September had been a fairly bullish month on Wall Street, with all three major indexes making fresh 2009 highs.
Friday's session took a negative turn after the Commerce Department said durable goods orders, which are orders for products like refrigerators that are expected to last three years or longer, unexpectedly fell 2.4% in August -- the worst slide since January. The figure spooked the markets as economists had forecasted orders would rise 0.3%. Excluding transportation and defense orders, the closely-watched business spending figure fell 0.4% last month after having slid 1.3% in July.
However, stocks bounced off their lows after the University of Michigan/Reuters consumer sentiment index was released, rising from 65.7 last month to 73.5 in September -- the highest level since Jan. 2008. Analysts had predicted a more modest rise to just 70.3. The report helped lift shares of stocks like Ford (F) and Apple (AAPL).
At the same time, the Commerce Department said new home sales rose 0.7% in August to a rate of 429,000 units, missing expectations for a rate of 440,000. Still, the month marked the fifth straight increase of new home sales and inventory levels fell to 7.3 months worth of supply. Shares of home builders like Pulte (PHM) and Hovnanian (HOV) were mixed on the news.
Meanwhile, energy stocks put pressure on the markets as crude oil gave up earlier gains. Crude ended at $65.96 a barrel, up 7 cents. Capping off its worst week since mid-July, gold slid $7.30 an ounce, or 0.73%, to $990.20 -- its lowest settle since Sept. 2.
Tech stocks were also under fire as shares of BlackBerry maker Research in Motion (RIMM) plunged in the wake of its weaker-than-expected revenue and outlook, which prompted a trio of analysts downgrades. Goldman Sachs reportedly cut RIM to “neutral” from “buy” and removed it from its conviction buy list. According to Reuters, Goldman cited doubts about RIM’s ability to keep its market share in North America amid competition from Apple (AAPL), Motorola (MOT) and Palm (PALM).
Meanwhile, the markets are monitoring developments at the G-20, where President Barack Obama is pushing the body to become the permanent forum on international economic policy matters, overshadowing the G-8.
Corporate Movers
Unilever (UN) announced a $1.88 billion deal to acquire the personal care products division of Sara Lee (SLE). Unilever will add Sara Lee's cleaning and deodorant brands to its company's lineup of Dove soaps, AXE body spray and Vaseline. Sara Lee said it will continue to look for buyers for its other home care products.
Research in Motion (RIMM) tumbled more than 11% in pre-market action as the BlackBerry maker was slammed by a trio of analyst downgrades in the wake of its weaker-than-expected outlook and revenue.
KB Home (KBH) posted a narrower fiscal third-quarter loss but the home builder’s CEO was cautious about the timing of a housing market recovery. KB Home said it lost 87 cents a share, compared to a loss of $1.87 a share a year ago. The company’s revenue tumbled 33% to $458.5 million, matching the Street’s view.
Barclays (BCS) is in discussions to acquire Citigroup’s (C) retail banking assets in Portugal in a deal that is likely worth less than $100 million, The Wall Street Journal reported. The deal, which could be announced as early as next week, would also include Citi’s credit card portfolio in Portugal, the paper reported.
Allos Therapeutics (ALTH) said its lymphoma drug folotyn received the green light from U.S. regulators, paving the way for the medicine to be available to U.S. patients in October. The company said the approval from the Food and Drug Administration makes folotyn the first and only approved therapy for relapsed or refractory peripheral t-cell lymphoma.
Massey Energy (MEE) saw its shares tumble in the face of a rebound in oil prices as the energy company was hurt by an analyst downgrade. According to Dow Jones Newswires, Massey was cut to “neutral” from “overweight” by JPMorgan.
Calamos Asset Management (CLMS) climbed nearly 4% on as the company benefited from a “buy” rating from Bank of America-Merrill Lynch. The brokerage upgraded Calamos and Janus Capital (JNS) to “buy,” citing the potential for a stronger dollar that would draw more investors to the U.S. markets, Reuters reported.
ConAgra (CAG), the maker of Hebrew National hot dogs and Chef Boyardee, announced a 5% increase to its quarterly dividend. The move will lift the food maker’s dividend from 19 cents a share to 20 cents and from 76 cents per share on an annualized basis to 80 cents.
Global Markets
European stocks were mixed in recent trading as the U.K.'s FTSE 100 rose 0.23% to 5090.98 but Germany's DAX fell 0.43% to 5581.09 and France's CAC 40 sank 0.43% to 3742.22.
Asian markets slumped as Japan's Nikkei 225 plunged 2.64% to 10265.98 and Hong Kong's Hang Seng sank 0.13% to 21024.40.
Jump in energy demand fuels stocksDSW Profit Slides; Company Raises ‘09 Outlook
