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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.633720 |
| Euro to US Dollar | 1.398406 |
| Japanese Yen to US Dollar | 0.010414 |
| Canadian Dollar to US Dollar | 0.861846 |
Stocks plunged again today, with the Dow Jones industrials falling 514 points, as oil and other commodity prices tumbled and investor fears grew that a worsening global slowdown isn't likely to turn around soon.
The battering hit markets around the world as any potential buyers went to the sidelines or sought safety in bonds.
The Dow's loss dropped the index 5.7% to 8,519. The Standard & Poor's 500 Index fell 58 points, or 6.1%, to 897, and the Nasdaq Composite Index slumped 81 points, or 4.8%, to 1,616.
The drubbing came after markets around the world suffered big losses. The smackdown was so nasty it may attract some buying on Thursday morning; futures trading suggests a modestly higher open for U.S. stocks.
An unholy combination of events combined to slam stocks today:
- Lower commodity prices. Crude oil finished down 5.8% to $66.75 a barrel -- its lowest close since September 2007. Oil has fallen 55% since July and is down 30% on the year. Copper fell to $1.87 a pound -- its lowest close since November 2005; it is down 56% since peaking in early May. Gold was down 4.3% to $735.20 an ounce. (In August, columnist Jon Markman wrote that crude could hit $65.)
- A rising dollar. At least against Europe. The dollar was up 1.5% against the euro and 2.6% against the British pound. It was down 2.7% against the yen. The dollar has jumped nearly 10% against the euro in less than three weeks, reflecting concern that economies in Europe are weakening rapidly. But it will cut into profits for American companies with big presences in Europe. The reason: The value of profits in Europe will fall when converted into dollars.
- Recession worries. The disaster that has hit financial companies this year means enormous job cuts are ahead. Manufacturing is slumping in part because of the long-term housing slump. Plus, global turmoil is increasing. Stocks in Argentina fell more than 10% after the government announced plans to seize control of the country's 10 biggest pension funds.
- Crummy earnings. This began with disappointments from Boeing (BA, news, msgs), Merck (MRK, news, msgs) and AT&T (T, news, msgs). It ended with a weak guidance from Amazon.com that knocked the stock down 14% to $43.05 after hours.
- Hedge fund selling and mutual fund redemptions.This was visible in the uptick in trading volume that hit the market in the last hour of trading, especially between 3:20 p.m. and 3:40 p.m. ET. CNBC reported that at least two large hedge funds were cutting their holdings.
- A PR disaster in Washington. The nation's bond-rating companies added to the market's foul mood. At a congressional hearing, their top brass struggled to explain away e-mails that said the agencies would give anything a decent rating if the price was right. One Standard & Poor's analyst told a colleague the company would rate a deal even if it had been "structured by cows."
Today's losses mean that investors will scrutinize the flood of earnings reports due on Thursday very carefully.
Among companies reporting include Bristol-Myers Squibb (BMY, news, msgs), JetBlue (JBLU, news, msgs), Union Pacific (UNP, news, msgs) and Microsoft (MSFT, news, msgs). (Microsoft is the publisher of MSN Money.)
Was there any decent news in today's markets? Yes. McDonald's (MCD, news, msgs) earnings were strong. After the close, Amgen (AMGN, news, msgs) reported better-than-expected results, and the stock, which had fallen 5% to $49.70 in regular trading, bounced up more than 5.5% to $52.45 after hours.
And there was a little bit of good news in the close itself. The S&P 500, Nasdaq and Nasdaq-100 indexes all fell below their Oct. 10 closing levels; many analysts have watched these levels closely as signals the market has bottomed.
But there was an attempt at a rebound near 4 p.m., and the S&P 500 finished only two points below its Oct. 10 close. Technically minded investors will watch the index's Thursday performance closely.
A big, ugly sell-off
All 30 of the stocks in the Dow were lower, along with 481 S&P 500 stocks and 90 stocks in the Nasdaq-100 Index ($NDX.X). The index was down 46 points, or 3.6%, to 1,237.Among the worst performers today were energy stocks and commodity-oriented companies. The Select Sector SPDR-Energy (XLE, news, msgs) exchange-traded fund, which tracks the S&P 500's energy sector, fell 9.75% to $44.20.
Anadarko Petroleum (APC, news, msgs) fell 15.7% to $29.38. Offshore drilling company Transocean (RIG, news, msgs) fell 12.6% to $68.88.
The Select Sector SPDR-Materials (XLB, news, msgs) ETF was down 5.5% to $24.49. Copper producer Freeport-McMoRan (FCX, news, msgs) was down 17.8% to $26.92. Aluminum giant Alcoa (AA, news, msgs), the biggest loser among the Dow stocks, was down 13.4% to $10.52.
The market plunge came despite robust earnings late Tuesday from Apple (AAPL, news, msgs) and decent earnings from McDonald's (MCD, news, msgs).
- Top Stocks blog: iPhone fuels Apple's 'remarkable quarter'
Apple was up 5.9% to $96.87, third-best among Nasdaq-100 stocks. McDonald's finished down 1.7% to $54.18, after being up for most of the day. It was the second-best Dow performer after Coca-Cola (KO, news, msgs), down 1.4% to $45.38.23.
| Wed. | Tues. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Crude oil (NYMEX) (per barrel) | $66.75 | $70.89 | -$4.14 | -33.67% | -30.45% |
Heating oil (per gallon) | $2.0365 | $2.1771 | -$0.1406 | -28.86% | -23.13% |
Natural gas (per million BTU) | $6.7770 | $6.8440 | -$0.0670 | -8.89% | -9.43% |
Unleaded gasoline (per gallon) | $1.5709 | $1.6919 | -$0.1210 | -36.78% | -36.93% |
Weak holiday sales outlook hits Amazon
So, what was Amazon.com's problem? Simple. When it cut its 2008 revenue and income forecasts today, it said holiday sales would fall short of Wall Street expectations. The stock immediately sagged.The online retailer has cut prices to spur sales in a soft U.S. economy, but investors fear that won't be enough to counter the financial markets crisis of the last year and signs of a global recession.
Stock Charts (Year)
Amazon.com
Amgen
Amazon earned $118 million, or 27 cents a share, in the third quarter, up from $80 million, or 19 cents per share, a year earlier. Revenue rose to $4.26 billion. Analysts had expected earnings would hit 25 cents a share on revenue of $4.28 billion, Reuters said.
The company expects fourth-quarter sales of $6 billion to $7 billion; the consensus estimate has been for $7.1 billion. It forecast operating income at $145 million to $305 million.
Amgen boosts guidance
Amgen's third-quarter profit jumped on strength across all its products, including its troubled anemia franchise, prompting the biotech giant to again raise its 2008 financial projections.Amgen earned $1.2 billion, or $1.09 a share, up from $201 million, or 18 cents a share, a year ago. Revenue was $3.9 billion, beating Street estimates of $3.7 billon.
The company boosted its 2008 adjusted earnings guidance to $4.45 to $4.55 a share from increased July guidance of $ 4.25 to $4.45 a share. Wall Street has expected $4.38 a share. Revenue for the year will range from $14.9 billion to $15.2 billion. That beats its own guidance and the average analyst view of $14.82 billion.
Wachovia posts another big loss
Wachovia (WB, news, msgs) this morning reported a $23.9 billion loss in the third quarter -- its third loss in a row.The loss translates to $11.18 per share -- a huge reversal from the profit of $1.6 billion, or 85 cents per share, that Wachovia earned in the 2007 third quarter. Excluding one-time items, Wachovia lost $2.23 per share, far worse than the expected loss of 2 cents.
Wachovia, which has been slammed by the mortgage-market meltdown, said it set aside $6.63 billion for loan losses.
Earlier this month, the company agreed to be purchased by Wells Fargo (WFC, news, msgs) for $11.7 billion. It dumped an earlier agreement to sell its banking operations to Citigroup (C, news, msgs) for $2.2 billion.
Wachovia shares were down 6.2% to $5.71. Wells Fargo was down 4.1% to $31.30.
Boeing, Merck profits fall; AT&T misses estimate
Four Dow stocks reported earnings this morning.Boeing reported a 38% drop in third-quarter profit, as the aircraft maker was stunted by a machinist strike. Boeing earned $695 million, or 96 cents a share, down from $1.11 billion, or $1.44 a share. Analysts were looking for 98 cents per share.
Boeing shares were down 7.5% to $42.91.
Merck shares were down 6.5% to $28.01 today after the drug giant posted net income of $1.09 billion, or 51 cents per share. That's down from the $1.53 billion, or 70 cents per share, that Merck earned last year. Excluding items, Merck said it earned 80 cents, a penny ahead of Wall Street's estimate.
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AT&T shares fell 7.6% to $23.78. The telecom giant earned $3.23 billion, or 55 cents per share, a 5.5% increase from the $3.06 billion, or 50 cents per share, it earned last year. Adjusted earnings were 67 cents, shy of the 71-cent consensus estimate.
Thanks to AT&T's disappointment, many tech stocks fell. Hardest hit: chips stocks. The Philadelphia Semiconductor Index ($SOX.X)was down 6.2% to 219.70. SanDisk (SNDK, news, msgs) was down 31%.
McDonald's bucked the trend, earning $1.05 per share in the third quarter, an 11% jump from the 89 cents it earned last year and above analysts' expectations of 98 cents per share.
McDonald's managed to take advantage of the economic slowdown, as the fast-food chain attracted customers from other restaurants. U.S. sales at stores open at least a year rose 4.7% in the quarter.
Mortgage applications sink
An index that tracks the number of people applying for mortgages fell 16.6% last week to 408.1. That's an eight-year low, according to the Mortgage Bankers Association."It's getting harder to get a loan," Patrick Newport, an economist at Global Insight, told Bloomberg News. "Sales will continue dropping for the rest of the year because of what's happening in the credit markets."
Applications to refinance existing mortgages were down 23.5% last week.
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Is the credit market unfreezing?Throwing billions of dollars at the world's banks may be working. Markets critical to companies that must borrow to fund necessities -- such as payrolls -- are starting to function again, says Jim Jubak.
Argentina's stock market falls on pension seizure plan
Argentina's Merval index headed for its worst drop since 1990 after the government's plan to seize private pension funds undermined investor confidence in developing countries.Argentina's Merval Index dropped 16% to 877.36. Brazil's Bovespa index fell 6.7% to 36,426.52.
Argentine President Cristina Kirchner late Tuesday signed a proposal to nationalize Argentina's private pension funds. The proposal would allow the government to take over 10 funds that manage about $29.3 billion.
Argentina is a key exporter of commodities like soybeans and wheat, and recent declines in commodity prices have pinched the country's revenue stream. Some analysts see Kirchner's move as an effort to get access to cash before the country faces $20 billion in debt obligations next year. In 2001, Argentina defaulted on $95 billion in bonds, and the country has not had access to the international debt markets since.
Andrew Rosenbaum contributed to this report.
| Wed. | Tues. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Treasurys | |||||
13-week Treasury bill | 1.010% | 1.095% | -0.085 | 12.22% | -67.83% |
5-year Treasury note yield | 2.552% | 2.602% | -0.050 | -14.53% | -26.14% |
10-year Treasury note yield | 3.618% | 3.703% | -0.085 | -5.46% | -10.33% |
30-year Treasury bond yield | 4.088% | 4.194% | -0.106 | -5.04% | -8.32% |
Currencies | |||||
U.S. Dollar Index | 85.790 | 84.415 | 1.375 | 8.10% | 11.86% |
British pound in dollars | $1.6271 | $1.6700 | -0.0429 | -8.72% | -18.21% |
Dollar in British pounds | £0.6146 | £0.5988 | 0.0158 | 9.55% | 22.26% |
Euro in dollars | $1.2868 | $1.3067 | -0.0198 | -8.74% | -11.95% |
Dollar in euros | € 0.7771 | € 0.7653 | 0.0118 | 9.57% | 13.58% |
Dollar in yen | 97.66 | 100.35 | -2.69 | -7.89% | -12.69% |
Canadian dollar in U.S. dollars | $0.798 | $0.824 | -$0.0266 | -15.18% | -19.64% |
U.S. dollar in Canadian dollars | $1.254 | $1.213 | $0.0415 | 17.93% | 24.47% |
Commodities | |||||
Gold | $735.20 | $768.00 | -$32.80 | -16.53% | -12.27% |
Copper | $1.8655 | $2.0070 | -$0.14 | -35.20% | -38.66% |
Silver | $9.4600 | $10.0750 | -$0.61 | -22.93% | -36.60% |
Corn | $3.8500 | $4.1100 | -$0.26 | -21.03% | -15.48% |
Crude oil (NYMEX) (per barrel) | $66.75 | $70.89 | -$4.14 | -33.67% | -30.45% |
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