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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 |
The Dow Jones industrials and the Standard & Poor's 500 Index suffered their fourth-worst point losses ever today as investors sold on more evidence of global economic trouble.
The Dow fell 680 points, or 7.7%, to 8,149. The S&P 500 was off 80 points, or 8.9%, to 816, and the Nasdaq Composite Index tumbled 138 points, or 9%, to 1,398.
The slump took back more than half of the Dow's 1,277-point gain over the previous five sessions. Early futures trading, however, suggests that the market may open slightly higher on Tuesday.
The sell-off began with profit-taking after five straight positive days and gained momentum with a series of economic reports. The National Bureau of Economic Research said the U.S. economy fell into recession in December 2007. A report showed a deepening slump in U.S. manufacturing. But the U.S. wasn't alone. Manufacturing activity in China contracted by a record amount in the last month.
The point losses for the Dow, S&P 500 and Nasdaq were their worst since Oct. 15. The Nasdaq's percentage loss was its sixth-worst ever. The Dow's percentage loss was its 12th-worst ever. The S&P 500's percentage loss was its 11th worst overall and third-worst since the 1987 market crash.
All 30 Dow stocks were lower on the day. The best performer was McDonald's (MCD, news, msgs), and it was down 4.4% to $56.17.
In addition, only one S&P 500 stock was higher -- Rohm & Haas (ROH, news, msgs), up 3.5% to $70.82. All 100 stocks in the Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks, were lower. The index fell 8% to 1,091.
Today's selling precipitated a rally in bonds, with the yield on the 10-year Treasury dropping to 2.72% -- the lowest yield on the 10-year note since 1955. The yield fell further when Federal Reserve Chairman Ben Bernanke said in an Austin, Texas, speech today that the central bank may start targeting long-term rates.
The 10-year note is closely watched because -- historically at least -- its yield has been a key determinant of long-term mortgage rates. Lately, however, because of problems in credit markets, that relationship has broken down.
Financials, energy lead market lower
Financial stocks were the market's biggest problem. Stocks in the S&P Financial Sector fell 17%, the biggest one-day percentage decline ever for the group.Dow components Bank of America (BAC, news, msgs), American Express (AXP, news, msgs), JPMorgan Chase (JPM, news, msgs) and Citigroup (C, news, msgs) were off more than 15% each. Citigroup, in fact, was down 22.2% to $6.45, the worst performer among the Dow stocks.
Energy and materials stocks were nearly all lower after commodity prices slumped. The S&P Energy Sector was down 10.3%; materials stocks were off 9.8%.
Crude oil closed down 9.5% to $49.28 a barrel in New York after the Organization of Petroleum Exporting Countries put off a production cut at a meeting in Cairo, Egypt, until at least next month.
ExxonMobil (XOM, news, msgs) dropped 7.3% to $74.31, and Chevron (CVX, news, msgs) was off 8.9% to $72.02. They subtracted 64 points from the Dow.
Gold, meanwhile, fell 5.2% to $776.80 an ounce; copper dropped 1.1% to 1.63 a pound. Freeport-McMoRan Copper & Gold (FCX, news, msgs) fell 12.8% to $20.91.
The Nasdaq and Nasdaq-100 indexes were driven lower by weakness in such key tech stocks as Google (GOOG, news, msgs), down 9.2% to $265.99; Apple (AAPL, news, msgs), off 4% to $88.93; and Qualcomm (QCOM, news, msgs), down 10.8% to $29.96.
All have been hit hard by worries that weakening business and consumer spending will put pressure on sales and profits.
Shares of apparel maker Liz Claiborne (LIZ, news, msgs) fell 26% to $2.11 on its last day as a member of the S&P 500. Liz Claiborne will be part of the S&P Small-cap index. It is being replaced by Dun & Bradstreet (DNB, news, msgs), which was off 2.5% to $78.
| Mon. | Fri. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $49.28 | $54.43 | -$5.15 | -9.48% | -48.66% |
| Heating oil (per gallon) | $1.6150 | $1.7271 | -$0.1121 | -3.51% | -39.04% |
| Natural gas (per million BTU) | $6.6040 | $6.5100 | $0.0940 | 1.44% | -11.75% |
| Unleaded gasoline (per gallon) | $1.1112 | $1.2096 | -$0.0984 | -3.05% | -55.39% |
It's official: We’re in a recession
If you thought the economy really started to head south a year ago, you were right.The U.S. economy entered a recession a year ago this month, the National Bureau of Economic Research said today. The private, nonprofit group of economists based in Cambridge, Mass., dates recessions. The last U.S. recession was from March through November 2001.
The 1.2 million drop in payroll employment so far this year was the biggest factor in determining that start of the contraction, the group said in a statement on its Web site.
- Top Stocks blog: The Week Ahead -- Double trouble from Sears and jobs
The 73-month economic expansion, lasting from November 2001 to December 2007, was well short of the previous cycle that lasted a record 10 years. At 12 months, the current contraction is already longer than the last slump that covered the eight months from March to November 2001.
Although a recession is conventionally defined as two quarters of successive contraction in gross domestic product, the private committee doesn’t require GDP data to makes its recession call. Its members focus on month-to-month changes in the economy.
The U.S. economy shrank at a 0.5% pace in the third quarter after expanding 2.8% in the previous three months. Many economists believe the economy will contract at a 5% pace this quarter.
Economic worries mount
The NBER's recession announcement came after more weak economic news.The Institute of Supply Management's report on manufacturing came in at a reading of 36.2 for November, the lowest reading since 1982 and down from a reading of 38.9 in October. Economists had expected a reading of 38.
A reading below 50 indicates contraction in the sector.
In housing-market news, construction spending fell 1.2% in October, following a 0.3% drop in September. Economists had been looking for a 0.9% drop in October.
More weak data are due this week.
On Wednesday the ISM's service sector index comes out. Economists predict that the service industry also contracted in November.
Friday's data will likely be the most closely watched: The November jobs report is expected to show that the economy shed 300,000 jobs last month, after losing 240,000 jobs in October.
Consumers shop on Black Friday
Shoppers were out there spending their money on Black Friday, the day after Thanksgiving and the unofficial kickoff to the holiday shopping season.Sales on Black Friday rose 3% to $10.6 billion, year over year, according to ShopperTrak, a retail research firm.
The National Retail Federation estimated that shoppers spent an average of $372.57 last weekend, a 7.2% increase from last year's $347.55. The survey polled 3,370 shoppers.
"Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend," ShopperTrak co-founder Bill Martin said in a statement.
Deep-discount buying not enough
But Martin was cautious about overall holiday spending. "While this is an encouraging start for retailers, there's no guarantee these deep discounts will continue after Black Friday weekend, which could slow spending," he said. "Additionally, consumers have just 27 days to shop this year as opposed to 32 in 2007, which may catch some procrastinating consumers off guard, leading to lower sales levels."Many retailers are discounting aggressively in hopes of enticing shoppers focused on saving. Those deep discounts played a key role in attracting shoppers over the weekend, according to a survey by America's Research Group. About 70% of consumers bought highly discounted merchandise on Friday, the group said.
More from MSN Money
Black Friday saw a 1% increase in online spending, to $534 million, according to data from comScore. But consumers have spent only $10.41 billion online so far this holiday season, a 4% decline from the same period last year.
J&J buys implant maker
Drug giant Johnson & Johnson (JNJ, news, msgs) is buying implant company Mentor (MNT, news, msgs) for nearly $1.1 billion in cash.The offer of $31 per share represents a 92% premium to Mentor's closing price on Friday.
Most of Mentor's sales come from breast implants, but the company also sells equipment used in liposuction procedures. J&J plans to run the company as a stand-alone business under its Ethicon unit.
Mentor shares soared 89.4% to $30.58; J&J shares were down 5.6% to $55.33.
Yahoo denies deal with Microsoft
Yahoo (YHOO, news, msgs) isn't in talks to sell its Internet search business to Microsoft (MSFT, news, msgs), according to The Wall Street Journal's technology blog All Things Digital. (Microsoft is the publisher of MSN Money.)Yahoo executives were quashing a weekend report in the Sunday Times of London that Microsoft was in discussions to buy the search business for $20 billion. Yahoo spokesman Brad Williams said: "We don't comment on rumors, and all this is a rumor."
Stock Charts (Year)
Yahoo
Microsoft
Microsoft CEO Steve Ballmer recently said that he isn't interested in a merger with Yahoo.
Yahoo shares slid 6.7%, to $10.74; Microsoft stock fell 8% to $18.61.
GM board reviews bailout proposal
The board of General Motors (GM, news, msgs) met this weekend and reviewed a turnaround plan the troubled automaker plans to present to Congress as part of a request for more bailout aid.GM management is considering shutting down production of certain brands or selling them off, The Wall Street Journal reported. GM shares were down 12.4% to $4.59.
Shares of Ford Motor (F, news, msgs) were down 5.2% to $2.55 after the automaker said it may sell its Volvo business.
| Mon. | Fri. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 0.010% | 0.020% | -0.010 | -50.00% | -99.68% |
| 5-year Treasury note yield | 1.723% | 1.944% | -0.221 | -11.37% | -50.13% |
| 10-year Treasury note yield | 2.719% | 2.957% | -0.238 | -8.05% | -32.61% |
| 30-year Treasury bond yield | 3.236% | 3.487% | -0.251 | -7.20% | -27.43% |
| Currencies | |||||
| U.S. Dollar Index | 86.900 | 86.705 | 0.195 | 0.22% | 13.31% |
| British pound in dollars | $1.4903 | $1.5392 | -0.0489 | -3.13% | -25.08% |
| Dollar in British pounds | £0.6710 | £0.6497 | 0.0213 | 3.23% | 33.48% |
| Euro in dollars | $1.2628 | $1.2700 | -0.0072 | -0.52% | -13.60% |
| Dollar in euros | € 0.7919 | € 0.7874 | 0.0045 | 0.52% | 15.74% |
| Dollar in yen | 93.13 | 95.53 | -2.40 | -2.57% | -16.74% |
| Canadian dollar in U.S. dollars | $0.804 | $0.809 | -$0.0044 | -0.47% | -19.02% |
| U.S. dollar in Canadian dollars | $1.244 | $1.237 | $0.0068 | 0.41% | 23.40% |
| Commodities | |||||
| Gold | $776.80 | $819.00 | -$42.20 | -5.15% | -7.30% |
| Copper | $1.6310 | $1.6495 | -$0.02 | -1.12% | -46.37% |
| Silver | $9.3800 | $10.2300 | -$0.85 | -8.31% | -37.13% |
| Corn | $3.3275 | $3.4950 | -$0.17 | -4.79% | -26.95% |
| Crude oil (NYMEX) (per barrel) | $49.28 | $54.43 | -$5.15 | -9.48% | -48.66% |
A last look at November
The good news about November was that it could have been much worse.The Dow finished the month down 5.3%, its eighth monthly loss in an entirely forgettable year. The S&P 500 was down 7.5%, with the Nasdaq down 10.8%.
But at the Nov. 20 close, a day the Dow lost 445 points, the blue-chip index was down 19% for the month, with the S&P 500 looking at a 22% loss and the Nasdaq a 24% loss.
What brought the market back was a five-day rally that ended on Friday. The Dow was up 15.9%, with the S&P 500 up 18%, the biggest five-day gains for either index since the 1930s. The Nasdaq was up 15.9% in the period.
The big question is whether that rally will hold. Today, it did not hold, largely because of weakness in financial and energy stocks, both of which were big gainers last week.
We should note that Wal-Mart Stores (WMT, news, msgs) is the only Dow stock showing a gain this year. Also, only 19 S&P 500 stocks are ahead on the year.
Here are the Dow's winners and losers for November and the year:
| Company | Nov. close | Nov. price chg. % | Nov. close | YTD price chg. % | |
|---|---|---|---|---|---|
| November winners | Year-to-date winners | ||||
| Verizon | $32.65 | 10.0% | Wal-Mart Stores | $55.88 | 13.8% |
| ExxonMobil | $80.15 | 8.1% | McDonald's | $58.75 | -2.5% |
| Caterpillar | $40.99 | 7.3% | Johnson & Johnson | $58.58 | -14.8% |
| AT&T | $28.56 | 6.7% | Procter & Gamble | $64.35 | -15.3% |
| Coca-Cola | $46.87 | 6.4% | Exxon Mobil | $80.15 | -17.3% |
| November losers | Year-to-date losers | ||||
| Boeing | $42.63 | -18.7% | American Express | $23.31 | -60.1% |
| DuPont | $25.06 | -21.8% | Bank of America | $16.25 | -64.9% |
| JPMorgan Chase | $31.66 | -23.2% | Alcoa | $10.76 | -72.9% |
| Bank of America | $16.25 | -32.8% | Citigroup | $8.29 | -75.0% |
| Citigroup | $8.29 | -39.3% | General Motors | $5.24 | -79.9% |
Here the winners and losers for the S&P 500 for November and the year:
| Company | Nov. close | Nov. price chg. | Company | Nov. close | YTD price chg. |
|---|---|---|---|---|---|
| November winners | YTD winners | ||||
| Archer-Daniels-Midland | $27.38 | 32.1% | Family Dollar Stores | $27.78 | 44.5% |
| Sunoco | $39.74 | 30.3% | Rohm and Haas | $68.41 | 28.9% |
| Newmont Mining | $33.65 | 27.8% | UST | $68.75 | 25.5% |
| Autonation | $8.54 | 24.3% | Southwestern Energy | $34.37 | 23.4% |
| Jacobs Engineering Group | $44.77 | 22.9% | Barr Pharmaceuticals | $65.39 | 23.2% |
| Ford Motor | $2.69 | 22.8% | Amgen | $55.54 | 19.6% |
| Molson Coors Brewing | $44.47 | 19.0% | Wal-Mart Stores | $55.88 | 17.6% |
| Windstream | $8.86 | 18.0% | Celgene | $52.10 | 12.8% |
| Allegheny Energy | $35.25 | 16.9% | Hudson City Bancorp | $16.70 | 11.2% |
| Anadarko Petroleum | $41.05 | 16.3% | General Mills | $63.17 | 10.8% |
| November losers | YTD losers | ||||
| Office Depot | $1.97 | -45.3% | Liz Claiborne | $2.85 | -86.0% |
| XL Capital | $5.03 | -48.1% | CIT Group | $3.34 | -86.1% |
| JDS Uniphase | $2.72 | -50.2% | American Capital | $4.24 | -87.1% |
| Jones Apparel Group | $5.13 | -53.8% | Developers Diversified Realty | $4.80 | -87.5% |
| Developers Diversified Realty | $4.80 | -63.6% | National City | $2.01 | -87.8% |
| Liz Claiborne | $2.85 | -65.0% | XL Capital | $5.03 | -90.0% |
| American Capital | $4.24 | -69.8% | Hartford Financial Services Group | $8.45 | -90.3% |
| Genworth Financial | $1.45 | -70.0% | ProLogis REIT | $3.83 | -94.0% |
| Tenet Healthcare | $1.21 | -72.4% | Genworth Financial | $1.45 | -94.3% |
| ProLogis REIT | $3.83 | -72.6% | American International Group | $2.01 | -96.6% |
Andrew Rosenbaum contributed to this report.
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