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Stocks extend rally on retail cheer
NEW YORK (CNNMoney.com) -- U.S. stocks rallied 1% Thursday, building on the previous session's big gains, as investors cheered strong retail sales and welcomed the European Central Bank's plan to extend liquidity measures.
The Dow Jones industrial average (INDU) jumped 107 points, or 1%; the S&P 500 (SPX) climbed 15 points, or 1.3%; and the Nasdaq (COMP) rose 30 points, or 1.2%.
Gains were broad-based, with all but three of the Dow 30 rising. Home Depot (HD, Fortune 500), Alcoa (AA, Fortune 500) and Bank of America (BAC, Fortune 500) led the advances.
Retailers helped prop up stocks as strong chain-store sales rolled in, signaling consumers are loosening their purse strings. Shares of Abercrombie (ANF), Dillards (DDS, Fortune 500) and JCPenney (JCP, Fortune 500) all jumped.
"This continues the trend we've been seeing in the past couple months of retail sales being better than expected," said Ryan Detrick, senior technical strategist Schaeffer's Investment Research. "It's a very positive signal that consumers are coming back and confidence is coming back with them."
Signs of economic strength sent stocks soaring Wednesday, with all three major indexes surging more than 2%. The blue-chip Dow index added 249 points, its biggest one-day gain since early September.
That momentum continued Thursday after the ECB announced it will continue its stimulus measures and will keep buying government bonds.
"The [announcement] was largely expected, but there's a bit of relief in the market that they aren't withdrawing liquidity," said Ryan Atkinson, vice president at Balestra Capital. "There's a feeling that the monetary authorities can support the [debt] issue, and for the time being that's all investors need."
Recently, investors have worried that Spain will be the next domino to fall in Europe. But Spain does not intend to tap the European Union fund, Spanish Prime Minister Jose Luis Rodriguez Zapatero said in a CNBC interview Thursday morning.
Economy: An encouraging report on the housing market helped stocks extend an early rally.
After the start of trading, the National Association of Realtors said its pending home sales index surged 10.4% in October after slipping 1.8% in September. The index, which measures sales contracts for existing homes, was expected to be unchanged.
"Economic data is looking better all around," said Atkinson. "Data has continued to beat expectations over the past few weeks, so investors are staying hopeful that the economy will continue to grow."
The upbeat housing report overshadowed a slightly worse than expected report on jobless claims. The government reported that the number of Americans filing for first-time unemployment rose to 436,000 last week, while economists polled by Briefing.com had expected 422,000 new claims.
A big week for jobs data culminates with the government's key monthly jobs report due before the opening bell on Friday: Employers are expected to have added 130,000 jobs in November after adding 151,000 jobs in October. The unemployment rate is expected to remain unchanged at 9.6%.
Investors were also looking at reports from top retailers on their November same-store sales, which will give a taste of the holiday shopping season ahead. Discount food shopping giant Costco (COST, Fortune 500) announced that its sales were up 9% year over year. Clothing brand Abercrombie & Fitch (ANF) reported sales were up 22%, and Macy's (M, Fortune 500) showed an increase of 6.1%. Same-store sales measure sales at stores open at least a year.
World markets: European stocks climbed. Britain's FTSE 100 finished 2.2% higher, the DAX in Germany climbed 1.3% and France's CAC 40 gained 2.1%.
Asian markets also had a solid day. The Shanghai Composite Index added 0.7%, the Hang Seng in Hong Kong added 0.9% and Japan's Nikkei jumped 1.8%.
Companies: Food and beverage giant PepsiCo (PEP, Fortune 500) said it would buy Russian food and beverage company Wimm-Bill-Dann Foods (WBD) for nearly $5.8 billion. The purchase will establish PepsiCo as the largest food and beverage business in Russia. Shares of PepsiCo dipped slightly.
Johnson & Johnson (JNJ, Fortune 500) announced that it is recalling 12 million bottles of over-the-counter Mylanta and almost 85,000 bottles of its AlternaGel liquid antacid. Shares of Johnson & Johnson edged up modestly.
Currencies and commodities: The dollar rose against the euro and the British pound, but slipped versus the Japanese yen.
Oil for January delivery rose $1.25 to settle at $88 a barrel.
Gold futures for February delivery gained $1 to settle at $1,389.30 an ounce.
Bonds: The yield on the benchmark 10-year U.S. Treasury rose to 3% from 2.96% on Wednesday. The 10-year yield hasn't been at 3% since late July.
Stocks end November with a whimper
NEW YORK (CNNMoney.com) -- Stocks started November with a bang but ended it with a whimper, as all three major indexes closed the day and month lower on Tuesday.
A stronger-than-expected report on consumer confidence muffled some losses, but the market couldn't fully recover from a weak housing report and concerns about Europe's economy.
The Dow Jones industrial average (INDU) lost 46 points, or 0.4%, but remained barely above the 11,000 mark at 11,006.02. The S&P 500 (SPX) fell 7 points, or 0.6%, to close at 1,180.55, and the Nasdaq (COMP) dropped 27 points, or 1.1%, to end at 2,498.83.
It was a downbeat end to a month that started out strong. The Dow and Nasdaq shot to two-year highs in early November after the Republican success in the Congressional election and the Federal Reserve's announcement of a second round of economy-boosting asset purchases.
But U.S. markets have been whipsawed by overseas worries about debt-ridden European economies, including Ireland, Portugal and Spain. Late Tuesday, S&P said it put Portugal's long- and short-term credit ratings on watch.
The Dow fell by triple digits at Tuesday's open. But the market got a boost when the Conference Board's index of consumer confidence came in above forecasts.
"Clearly we're not seeing a complete breakdown, but cautiousness is definitely in the air," said Kenny Landgraf, principal and founder at Kenjol Capital Management.
"On the upside, the domestic market is much stronger than international markets," Landgraf added. "Europe concerns have really been prolonged, and it seems like new countries keep tacking on more worries."
Stocks ended lower Monday, although a late-session surge eased early losses.
Economy: The Conference Board's index of consumer confidence rose more than expected to 54.1 in November from a downwardly revised 49.9 in October. Economists expected the index to come in at 52.
The Case-Shiller index of home prices in 20 major U.S. markets brought bad news: Home prices fell 2% in the third quarter after mostly steady gains since early 2009. Economists expected prices to rise 1% in September, according to a consensus of economists by Briefing.com.
A measure of manufacturing in the Chicago area showed an unexpected uptick in the pace of activity this month. The Chicago PMI index ticked up to 62.5 in November from 60.6 in October. Economists expected a slight drop. Any index reading over 50 indicates expansion.
Late Tuesday, the co-chairmen of President Obama's debt panel said they will delay a vote on final recommendations until Friday. The panel will release a report Wednesday as originally scheduled.
World markets: Asian markets closed lower. The Shanghai Composite lost 1.6%, the Hang Seng in Hong Kong fell 0.7% and Japan's Nikkei dropped 1.9%.
European stocks ended mostly flat. Britain's FTSE 100 and the DAX in Germany were unchanged, but France's CAC 40 closed off by 0.8%.
Companies: Google's (GOOG, Fortune 500) stock ended down more than 4.5% after the European Commission said it will investigate whether the Internet search company violated antitrust rules. Search service providers allege that Google gives its own services preferential placement on searches.
News reports also said Google is looking to acquire the discount coupon retailer Groupon. The New York Times' DealBook blog reported Google may be bidding as much as $6 billion for Groupon.
Currencies and commodities: The dollar was up against the pound and the euro, but it fell against the yen. Investors tend to move toward the dollar as a safe haven during times of economic uncertainty.
Oil for January delivery fell $1.62 to settle at $84.11 a barrel.
Gold futures for January delivery rose $18 to settle at $1,384 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.80% from 2.82% late Monday.
Stocks stage an afternoon comeback
NEW YORK (CNNMoney.com) -- After tumbling early Monday morning, stocks bounced back to end the session still down, but much closer to breakeven.
The Dow Jones industrial average (INDU) fell 40 points, or 0.4%, closing the session at 11,052, according to early tallies. The S&P 500 (SPX) fell 2 points, or 0.1%, and the Nasdaq (COMP) lost 9 points, or 0.4%.
Stocks had fallen nearly 1.5% earlier in the session, sending the Dow temporarily below 11,000, but they bounced back from those lows late in the afternoon.
"I think this is a trader's market. It was a little bit sleepy this morning, but now stocks are going to come back the other way," said Rich Ilczyszyn, a market strategist with futures-broker Lind Waldock.
Ilczyszyn expects stocks to be stuck in a tight range for the last few days of the month, as traders look to close out their bets, with as much profit as possible.
A wave of downbeat news gave investors little to be thankful coming back from the Thanksgiving holiday weekend, as renewed fears about Europe's debt crisis, feuding South and North Korea, and a WikiLeaks release of controversial diplomatic files all weighed on markets.
"The situation in Korea is hot and fluid," economist Robert Brusca of FAO Economics said in a research note. "The WikiLeaks data is very damaging to the U.S. and to many of its important allies."
Meanwhile, Europe was also on investors' minds: On Sunday, European officials announced an €85 billion bailout for Ireland and its banks. They also detailed a new protocol for similar rescues of European nations in the future.
The announcement didn't come as much of a surprise, after various media outlets speculated about the size and timing of the bailout over the last few weeks. But it still managed to rattle investors as it thrust Europe's debt crisis back into the spotlight, said Michael Crowley, senior economist with the Bank of Ireland.
"The market is focusing on Portugal and Spain, and wondering whether problems could spread to those countries," Crowley said. "There's an indication that the markets are kind of jittery and concerned about what and who will be next."
Black Friday: Investors were looking at the sales results from the first days of the holiday shopping season, including Black Friday and Cyber Monday.
Early reports already show shoppers spent more on Friday, although sales may have been stronger online.
According to the National Retail Federation, 212 million shoppers visited stores and websites over Black Friday weekend, up from 195 million last year. Spending rose 6.4% over last year, to an average of $365.34 per shopper.
World markets: European stocks tumbled. Britain's FTSE 100 slipped 1.8%, the DAX in Germany dropped 1.9% and France's CAC 40 lost 1.8%.
Asian markets ended mixed. The Shanghai Composite lost 0.2%, while the Hang Seng in Hong Kong gained 1.3% and Japan's Nikkei rose 0.9%.
Economy: President Obama on Monday proposed a 2-year freeze of federal workers' wages. The freeze is a way to save $2 billion for the remainder of the fiscal year 2011, and $28 billion over the next 5 years.
"Getting this deficit under control is going to require some broad sacrifices, and that sacrifice must be shared by employees of the federal government," Obama said.
While no major economic reports were scheduled Monday, investors will take in data on housing, manufacturing and consumer confidence on Tuesday. On Friday, the government will issue its closely watched monthly jobs report.
Companies: FedEx (FDX, Fortune 500) bucked the S&P 500's downward trend, rising 4.7%, after analysts from Credit Suisse raised their rating and price target for the company.
Amazon (AMZN, Fortune 500) stock rose to an all-time high, boosted by indications of solid Cyber Monday sales. Its shares rose 1.3% in afternoon trading, after trading up more than 2% to $181.84 earlier in the session.
Meanwhile, 18 of the 30 Dow components posted losses Monday.
Kraft Foods (KFT, Fortune 500) said Monday it is seeking arbitration in its battle with Starbucks (SBUX, Fortune 500), as the coffee chain tries to end a deal under which Kraft distributes packaged Starbucks coffee to grocery stores. Kraft shares fell 0.4% and Starbucks lost 0.9%.
BP (BP) announced Sunday it would sell its interests in Pan American Energy to Bridas Corporation for $7.06 billion in cash. The move is part of BP's plan to sell $30 billion in assets by the end of 2011, in order to raise funds in the wake of the Gulf oil spill. BP shares fell 0.8%.
A Dutch court ordered U.S.-based Johnson & Johnson (JNJ, Fortune 500) to pay a $130 million fine to pharmaceutical maker Basilea for a licensing agreement breach, Basilea said in a release.
Meanwhile, the Food and Drug Administration posted a report on its website that cites a variety of problems with a McNeil manufacturing facility in Puerto Rico. McNeil is a subsidiary of Johnson & Johnson, and was the source of this year's Tylenol recalls. Shares of Johnson & Johnson fell 0.6%.
Currencies and commodities: The dollar strengthened against the euro, the British pound and the Japanese yen.
Oil for January delivery rose $1.97 to settle at $85.73 a barrel.
Gold futures for December delivery rose $3.60 to settle at $1,366 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.84% from 2.87% on Friday.
Stocks skid on Korean hostilities
NEW YORK (CNNMoney.com) -- Stocks ran into a wall of worry Tuesday as violence erupted on the Korean peninsula, concerns about Europe's debt crisis expanded and the Federal Reserve issued a dour economic outlook.
The Dow Jones industrial average (INDU) fell 142 points, or 1.3%, to close at 11,036. The S&P 500 (SPX) fell 17 points, or 1.4%, to 1,181. The Nasdaq (COMP) slid 37 points, or 1.4%, to 2495.
The retreat was sparked by an exchange of artillery fire along the disputed sea border between North and South Korea Tuesday morning. The skirmish, which killed two South Korean soldiers and wounded several civilians, was one of the worst since the Korean War of the 1950s ended in armistice.
Dan Cook, chief executive at IG Markets, said thin trading volumes could be amplifying the market's reaction to the Korean hostilities, "but this is still major," he added.
"The uncertainty is so great and the implications could be huge," he said. "People are getting out of risk assets and in some cases going to cash," he added
In the currency market, the U.S. dollar and the Japanese yen both rose sharply. Gold prices and U.S. Treasuries also moved higher as investors flocked to safe haven assets.
The stock declines were broad based. Hewlett Packard (HPQ, Fortune 500) was the only Dow stock in the black. Shares of the computer maker rose 0.9%, after it reported better-than-expected quarterly results.
Chevron (CVX, Fortune 500) and Exxon (XOM, Fortune 500) both fell about 2% as the stronger dollar pressured oil prices. The dollar also weighed on shares of big multinational firms such as IBM (IBM, Fortune 500), Caterpillar (CAT, Fortune 500) and 3M (MMM, Fortune 500).
Concerns about long-term debt problems facing some major European economies had already been hanging over the market this week.
Investors are growing nervous about Spain and Portugal after officials in Ireland officially requested loans from the European Union and the International Monetary Fund over the weekend.
"Portugal is almost assuredly going to take a bailout," said Dan Greenhaus, chief market strategist with Miller Taback & Co. "The question then becomes how much Spain will need," he said, adding that estimates range between $300 billion and $400 billion.
Meanwhile, the Federal Reserve lowered its outlook for U.S. economic growth this year and next. The central bank also projected that unemployment would remain elevated into next year, according to meeting minutes.
But the bleak forecast was expected, and investors are more concerned about geopolitical risks, according to Greenhaus.
Traders said the market could be choppy this week, with many money managers taking time off ahead of the Thanksgiving holiday. All U.S. markets will be closed Thursday.
Wednesday brings reports on personal income and spending, as well as durable goods orders, data on weekly unemployment claims and new home sales for October.
Stocks ended mixed Monday, as shares of big banks fell after federal law enforcement officials searched the offices of three prominent hedge funds, in what is said to be a large-scale insider trading probe.
Economy: The Federal Reserve lowered its estimates for U.S. economic growth this year and next, and raised its outlook for unemployment.
The Fed now expects 2010 gross domestic product to increase between 2.4% and 2.5% this year, compared with an earlier projection of growth between 3% and 3.5%. In 2010, the Fed predicts GDP in the range of 3% to 3.6%, down from the last forecast in June.
Earlier, government data showed the U.S. economy grew at a better than expected 2.5% annual rate in the third quarter, faster than 2% rate previously reported.
The Fed also said the unemployment rate will be between 9.5% and 9.7% for all of 2010. Next year, the bankers believe joblessness could be as high as 9.1%, compared with a previous estimate of between 8.3% and 8.7%.
Minutes from the Fed's most recent policy meeting showed that officials were divided over the central bank's recent plan to boost the economy by purchasing $600 billion in U.S. Treasuries.
On the housing front, existing home sales declined 2.2% to a seasonally adjusted annual rate of 4.43 million in October from 4.53 million in September, according to the National Association of Realtors. Economists had expected a sales rate of 4.42 million in the month.
Companies: Clothing retailer J. Crew (JCG) agreed to be acquired by buyout firms TPG Capital and Leonard Green & Partners for $2.8 billion. Shares of J. Crew rose about 16% shares had been halted most of the morning after rallying as much as 22% in premarket trading.
Blackstone Group's pursuit of electric power provider Dynegy (DYN) has come to an end after activist shareholders objected to the takeover, Dynegy said in a statement.
World markets: The tensions in Korea dragged stock prices lower around the world.
Britain's FTSE 100 and the DAX in Germany both slipped 1.5%, while France's CAC 40 lost 2.3%.
In Asia, South Korea's Kospi index ended 0.7% lower. The Shanghai Composite lost 1.9% and the Hang Seng in Hong Kong dropped 2.7%. Japan's market was closed for a holiday.
Currencies and commodities: The dollar strengthened against the euro and the British pound, but remained weak versus the Japanese yen.
Oil for January delivery slipped 49 cents to $81.25 a barrel.
Gold futures for January delivery rose $19.80 to close at $1,377.60 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.76% from 2.81% late Friday.
Stocks finish higher after GM debut
NEW YORK (CNNMoney.com) -- U.S. stocks surged more than 1% Thursday as an early rally gained steam, following a strong debut by General Motors' stock.
Overnight talk that the Irish government was close to accepting a bailout loan eased eurozone worries and sent global stocks soaring. That momentum spilled over to U.S. markets.
The Dow Jones industrial average (INDU) jumped 173 points, or 1.6%. The S&P 500 (SPX) rose 18 points, or 1.5%, and the Nasdaq (COMP) ticked up 38 points, or 1.6%, according to early tallies.
Shares of General Motors (GM) opened at $35 apiece, $2 above the offering price. Trading was very active, with volume topping 452 million shares at the close. That's equivalent to about 10% of the total volume trading on the New York Stock Exchange's Thursday.
The automaker's highly-anticipated initial public offering raised more than $20 billion, making it the largest in U.S. history.
"The GM deal looks like it went well, which shows there's finally some stability and a growing company," said Joseph Saluzzi, co-head of equity trading at Themis Trading. "There was really no question of it not going well, because they had the government behind them, so it's a no brainer for investors -- they're thinking they can get a quick flip here, buying at $33 and selling at $35."
All but one of the Dow's 30 components rose, with Alcoa (AA, Fortune 500), Caterpillar (CAT, Fortune 500) and Boeing (BA, Fortune 500) leading the gains.
"The market is bipolar right now -- one day death is upon us, the next day everybody's jumping in," said Saluzzi. "There's not a lot of conviction overall, but today's one of those 'risk on' days."
After rallying in September and October, stocks have had a rocky November as eurozone worries and uncertainty about the U.S. economy's future have bubbled to the surface.
U.S. stocks ended Wednesday's session mixed, failing to break out of a narrow range as investors digested reports on inflation and the housing market.
A possible solution to the Irish debt crisis pushed European and Asian stocks higher, and those gains carried over into the U.S. market. Britain's FTSE 100 closed 1.3% higher, while Germany's DAX and France's CAC 40 surged 2%.
While Irish government officials had been denying that a loan to contain its growing debt was necessary, the International Monetary Fund and European Central Bank met in Ireland Thursday, and Central Bank of Ireland governor Patrick Honohan said he expects an IMF loan.
Asian markets ended with gains across the board. The Shanghai Composite rose 0.9%, and the Hang Seng in Hong Kong ticked up 1.8%. Japan's Nikkei gained 2.1%, which pushed the index above the 10,000-point threshold for the first time since June.
"The Irish debt situation has been the hot topic, so the news [that Ireland may accept a loan] took off some of the scare and this is a relief rally based on that initial headline," Saluzzi said. "But the issue is far from solved. It's like a bucket with many holes in it -- you plug one hole and water gushes somewhere else.
Economy: Strong U.S. economic data also helped boost markets Thursday.
Before the opening bell, the Labor Department reported the number of people filing for first-time unemployment benefits edged up 2,000 to 439,000 in the latest week.
While the number of claims moved higher, analysts had expected a larger increase of 442,000.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, slipped to 4,295,000 in the most recent week -- the lowest level in nearly 2 years.
The Philadelphia Federal Reserve index, a regional reading on manufacturing, surged to 22.5 -- up from 1 in October, and much higher than the reading of 5 economists had been expecting.
The Conference Board's index of leading economic indicators jumped 0.5%, after rising 0.5% the previous month. The reading slightly missed the 0.6% rise economists had forecast.
Companies: Staples (SPLS, Fortune 500) reported earnings ahead of the opening bell that were in line with analyst expectations. The office supply chain reported earnings per share of 40 cents, on total company sales of $6.5 billion for the third quarter. Shares of Staples jumped 2%.
Sears Holdings (SHLD, Fortune 500) posted results before the market open that were far worse than analysts expected. The company reported a loss of $1.98 per share, wider than the predicted loss of $1.07 a share. Sears shares slipped 4%.
Dell (DELL, Fortune 500) will release its quarterly results after the close. The PC maker is expected to report earnings of 33 cents per share, up from 23 cents per share a year earlier.
Meanwhile shares of NetApp (NTAP) led a broad tech advance, rising more than 8%. Shares of the data storage company had dropped about 6% Wednesday, after parts of its quarterly report were leaked.
Other big tech gainers included Yahoo (YHOO, Fortune 500), Amazon (AMZN, Fortune 500), Broadcom (BRCM, Fortune 500).
In other corporate news, coal producer Walter Energy (WLT) offered $3.24 billion to buy Western Coal Corp. Shares of Walter Energy edged slightly higher.
Currencies and commodities: The dollar fell against the euro and the British pound, but strengthened against the Japanese yen.
Oil for December delivery gained $1.41, or 1.8%, to $81.85 a barrel.
Gold futures for December delivery rose $16.10 to settle at $1,353 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.92%.
Stock rally bites the dust
NEW YORK (CNNMoney.com) -- After posting gains nearly all day, U.S. stocks tumbled at the session's close Monday, as investors remain jittery during a week with a full economic calendar.
At the closing bell, the Dow Jones industrial average (INDU) only gained 9 points, or 0.1%, after climbing as much as 88 points earlier in the session. The S&P 500 (SPX) fell 1 point, or 0.1% and the tech heavy Nasdaq (COMP) fell 4 points, or 0.2%.
Early in the session, investors welcomed news from Caterpillar (CAT, Fortune 500) that it planned to acquire mining equipment company Bucyrus International (BUCY). A strong retail sales report also gave stocks a boost at the get-go.
But stocks struggled to hold on to those gains toward the closing bell, as investors gear up for more economic data due out later this week. Tuesday brings reports on industrial production and the latest Producer Price Index, an important reading on the price of goods at the wholesale level.
"This market never really had a lot of conviction going in, even though we had some pretty good economic data to chew on. Investors just didn't have the passion for buying stocks today," said Jack Ablin, chief investment officer for Harris Private Bank in Chicago.
Meanwhile, worries about a sovereign debt crisis in Europe are once again bubbling to the surface, after the Group of 20 meeting of world leaders last week revived jitters about the global economy. And Irish debt continues to be a sore point, even as the country's government insists that it will not need a bailout.
"We've got some problems in the euro zone that are continuing to escalate," said Phil Streible, senior market strategist with Lind-Waldock. "The economic data hasn't been all that great, and I'm not so comfortable remaining upbeat about the stock market at these levels," he added.
Stocks ended on a sour note last week, as concerns about the global economy took center stage. All three major indexes closed with their worst weekly declines in three months.
Economy: A government report released before the market's open revealed good news for retailers heading into the holiday shopping season. Retail sales increased 1.2% in October -- a far better number than the 0.6% gain expected by analysts.
The report comes at the perfect time for retailers hoping for strong holiday sales. "There is a lot of demand out there and people feel better. Those who have money are spending it," said Harry Clark, founder and CEO of Clark Capital Management Group.
But two other economic reports were less upbeat, and could be holding stocks back from climbing more.
Investors cautiously looked to a bigger-than-expected rise in inventories at U.S. businesses in September as a sign that demand is not keeping up with supply. Inventories increased 0.9% from the prior month, higher than the 0.6% increase economists had been expecting.
A separate report on manufacturing in the New York area indicated that activity declined in early November from the month before.
For the first time since mid-2009, the general business conditions index fell below zero -- declining 27 points to -11.1. New orders also registered a sharp decline, the New York Fed said.
Tax policy is also likely to be on investors' minds as Congress reconvenes for a lame-duck session. Lawmakers have yet to decide the fate of key tax breaks that are due to expire at the end of 2010
Companies: After the bell, Nordstrom (JWN, Fortune 500) reported third-quarter earnings of 53 cents per share, slightly better than the 52 cents per share analysts were expecting. Nordstrom shares rose 1% in after-hours trading.
Earlier in the day, Caterpillar (CAT, Fortune 500) announced its plans to buy mining equipment giant Bucyrus International (BUCY) in a deal valued at $7.6 billion. The price per share is valued at a 32% premium to Bucyrus' share price as of Friday. Shares of Caterpillar edged up 1%, while Bucyrus's stock rose 29%.
The deal lifted stocks of other mining equipment manufacturers, driving shares of Joy Global Inc. (JOYG) up 7.5%, while shares of Terex Corp. (TEX, Fortune 500) rose 2.9%
Shares of Ford Motor Co (F, Fortune 500). rose 4.3% as rival automaker General Motors Co. prepares to price its initial public offering on Nov. 17.
BHP Billiton (BHP) withdrew its hostile takeover bid for Canadian mining company PotashCorp (POT) following intervention by Canadian regulators. Shares of BHP rose 0.8% afternoon trading, while PotashCorp shares fell about 1.9%.
Data-storage company EMC Corp. (EMC, Fortune 500) announced it will purchase Isilon Systems Inc. (ISLN) for $2.25 billion, increasing its competitiveness in the cloud computing sphere. Shares of EMC fell 1.2% and Isilon stock rose 28.5%.
Lowe's (LOW, Fortune 500) reported quarterly results early Monday morning. The home improvement retailer said it earned 29 cents per share, falling short of analysts' expectations by one cent per share. Sales rose to $11.6 billion.
The company said its earnings were hamstrung by overall sluggishness in the economy, and that uncertainty in employment and housing continue to pressure the industry. Lowe's shares fell 1.1%.
World markets: European stocks opened the week mixed. Britain's FTSE 100 rose 0.4%, the DAX in Germany gained 0.8% and France's CAC 40 fell 0.1%.
Asian markets also ended the session mixed. The Shanghai Composite gained 1.0% and Japan's Nikkei rose 1.1%, while the Hang Seng in Hong Kong lost 0.8%.
Currencies and commodities: The dollar strengthened against the euro, the Japanese yen and the British pound.
Oil for December delivery fell 2 cents, settling at $84.86 a barrel.
Gold futures for December delivery rose $3 to settle at $1,365.50 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury dropped, pushing the yield up to 2.95% from 2.76% late Friday.
Stocks: No comeback after Cisco
NEW YORK (CNNMoney.com) -- Stocks sold off at the open and never looked back Thursday after a disappointing outlook from Cisco Systems dragged on the technology sector all day.
The Dow Jones industrial average (INDU) fell 0.7% to close at 11,283, after falling as much as 1% earlier in the trading session.
The S&P 500 (SPX) lost 0.5% to close at 1,214, and the biggest loser was the tech-heavy Nasdaq (COMP), which fell 0.9% to close at 2,556, after plunging 2% in the morning.
Cisco's (CSCO, Fortune 500) lower outlook for the year initially got the tech sector off to a rocky start, and stocks grappled to make up some lost ground throughout the day.
"There was a realization that the world didn't end because of Cisco," said David Kotok, chairman and chief investment officer at Cumberland Advisors. "What's really driving stock prices today, yesterday and tomorrow more than anything else, is the central bank policies of very low interest rates for a very long time."
Kotok is referring to the Federal Reserve's policy of quantitative easing -- a $600 billion bond-buying spree the central bank announced last week. The news has sent stocks trending generally upward, as investors welcome the stimulus effect of the policy.
Meanwhile, investors are feeling jittery amid a gathering of the world's largest nations in Seoul, South Korea. The stakes are high at the Group of 20 meeting, especially as the European sovereign debt crisis and currency tensions once again move to center stage.
Market participants are hoping the meeting will conclude with a clear, detailed direction about where the world economy is headed. But if the end result is of little substance, markets could interpret that as a sign of more uncertainty and weakness in the economy.
"Investors want confidence," said Jim King, president and chief investment officer of National Penn Investors Trust Company. "They want to be confident in the direction of the economy, and that we're closer to creating solutions rather than creating more problems."
Stocks posted slight gains Wednesday after spending most of the session in the red.
Economy: World leaders including President Obama convened at the G-20 summit in Seoul that began Thursday. Heads of the world's major economies were expected to discuss recent currency tensions, as well as other global economic challenges and regulations.
Treasury Secretary Tim Geithner pushed back against an op-ed piece in the Financial Times written by former Fed Chairman Alan Greenspan that suggested the United States was pursuing a policy of currency weakening.
"The United States of America will never do that," Geithner told CNBC. "We will never seek to weaken our currency as a tool to gain competitive advantage or grow the economy."
World markets: European stocks closed little changed. Britain's FTSE 100 and the DAX in Germany were flat, and France's CAC 40 dipped 0.5%.
Asian markets ended higher. The Shanghai Composite gained 1%, the Hang Seng in Hong Kong ticked up 0.8% and Japan's Nikkei was up 0.3%.
Currencies and commodities: The dollar strengthened against the euro and the Japanese yen, but fell against the British pound.
Oil for December delivery settled flat at $87.81 a barrel.
Gold futures for December delivery rose $7.60 to settle at $1,406.90 an ounce.
Companies: Before the opening bell, media conglomerate Viacom (VIAB, Fortune 500) beat Wall Street expectations with strong earnings -- excluding writedowns from its Harmonix video game division, which Viacom plans to sell. Shares of Viacom moved 3% higher during the trading session.
In a surprise early release of its fourth-quarter earnings report just before the closing bell, rival Walt Disney (DIS, Fortune 500) announced earnings of 45 cents per share, falling short of analyst estimates. The Street was looking for 46 cents per share, according to analysts polled by Thomson Reuters. Its stock fell 2.8% before the closing bell.
Treasury markets, government offices and some banks were closed Thursday in observance of Veterans Day.
Stocks bounce back
NEW YORK (CNNMoney.com) -- U.S. stocks made a comeback Wednesday afternoon to finish higher, as the dollar turned lower after an earlier rally. But the gains were tepid as investors remained jittery ahead of the G-20 meeting.
The Dow Jones industrial average (INDU) added 10 points, or 0.1%, and the S&P 500 (SPX) rose 5 points, or 0.4%. The tech-heavy Nasdaq (COMP) added 16 points, or 0.6%.
All three major indexes had fallen sharply earlier in the session, with the Dow shedding 92 points, as the dollar soared to a one-month high against the euro and the yen. But stocks clawed higher as the dollar eased.
"We're seeing some abatement in the dollar's rally, which has contributed to the slight lift in the stock market," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
Investors remain cautious ahead of the G-20 meeting, which starts Thursday. Worries about sovereign debt continue to underpin sentiment and that could keep stocks trading in a tight range this week.
"I suspect stocks will stay in a range, largely directionless, leading into the weekend," Luschini said. He expects that investors will be sitting on their hands as the world's major economies meet in Seoul and discuss currency exchange rates, among other global economic issues.
Stocks ended lower Tuesday, as investors also continued to grapple with the Federal Reserve's latest effort to stimulate the economy.
The Fed unveiled details about its first round of debt buying as part of its $600 billion Treasury buying plan.
Economy: The number of people filing for initial jobless benefits plunged to 435,000 last week, according to the Department of Labor -- the lowest number in four months and much better than expected.
The number of Americans filing new claims for unemployment last week was forecast to fall to 450,000, from 459,000 in the previous week, according to a consensus of economists surveyed by Briefing.com.
U.S. trade balance contracted by 5.3% in September, narrowing to $44 billion, according to the Commerce Department. It was expected to have narrowed to $44.8 billion in September, from $46.3 billion in August.
The October Treasury budget is on tap for Wednesday afternoon.
Companies: Macy's (M, Fortune 500) reported a quarterly profit of 2 cents per share, an improvement from its loss of 8 cents per share a year ago. Macy's increased its earnings guidance for the second half of the year. The stock fell 1.3%.
General Motors, which is readying a $13 billion initial public offering, reported third-quarter net income of $2 billion on revenue of $34.1 billion. The results marked the automaker's best quarter in at least six years. GM also said it expects to "post a solid and profitable first year post-bankruptcy."
Boeing announced that it canceled test flights of its 787 Dreamliner, after one of the new airplanes made an emergency landing in Texas. Boeing's (BA, Fortune 500) stock fell more than 3%.
Campbell Soup Co. (CPB, Fortune 500) lowered its full-year guidance because of weaker-than-expected results for its upcoming quarter. The company said it expects a decline of 1% in net sales for the quarter, along with a 6% drop in earnings per share. For the full year, the company now forecasts net sales growth of 1% to 3%, as well as growth of 2% to 4% in earnings per share. The stock slipped 3.3%.
Shares of Assurant Inc. (AIZ, Fortune 500) plunged more than 11%, making the specialty insurer the biggest loser on the S&P 500. The stock dropped after an article in the American Banker suggested the company is tied to evidence of "abuse" and "conflicts of interest."
After the closing bell, network equipment maker Cisco (CSCO, Fortune 500) reported a quarterly profit Wednesday that rose 8% from year-ago to $1.9 billion, or 34 cents per share. Excluding a one-time charge, the company earned 42 cents per share. That topped Wall Street's forecast for 40 cents per share. Cisco's stock rose 4.2% after-hours.
World markets: European stocks closed lower. Britain's FTSE 100 and the DAX in Germany declined by 1%. France's CAC 40 fell 1.5%.
Asian markets ended the session mixed. The Shanghai Composite dropped 0.6% and the Hang Seng in Hong Kong lost 0.9%, while Japan's Nikkei rose 1.4%.
Currencies and commodities: The dollar lost ground against the British pound and the euro, easing from highs hit earlier in the session. It remained firm against the yen.
Commodity prices, which have been on a tear as investors bet that the Fed's $600 billion boost will weaken the greenback, took a breather thanks to the dollar's surge. A weaker dollar typically supports commodities priced in the U.S. currency, such as oil and gold, while a stronger dollar adds pressure.
Gold futures for December delivery fell $10.80 to settle at $1,399.30 an ounce, backing off from its record high achieved on Tuesday. Silver for December delivery slipped $2.04 to $26.87 an ounce.
Meanwhile, oil for December delivery gained $1.09 to finish at $87.81 a barrel, the highest settlement since Oct. 2008, after a government report showed a surprise decrease in inventories.
Bonds: The price on the benchmark 10-year U.S. Treasury fell slightly, pushing the yield up to 2.67% from 2.66% late Tuesday. Earlier the yield had climbed to 2.74%.
Stocks flounder as commodities shine
NEW YORK (CNNMoney.com) -- Stocks slumped while gold rallied to a record high Tuesday as investors continued to grapple with the Federal Reserve's latest effort to stimulate the economy.
The Dow Jones industrial average (INDU) was down 60 points, or 0.5%, to end at 11,421. The S&P 500 (SPX) shed 10 points, or 0.8%, to 1,227. The Nasdaq (COMP) slipped 17 points, or 0.6%, to 2,593.
Bank of America (BAC, Fortune 500) lead decliners on the Dow, while energy giant Exxon Mobil (XOM, Fortune 500) was the best performer on the index. Shares of other big banks also fell, with Citigroup (C, Fortune 500) and Morgan Stanley (MS, Fortune 500) down over 3%.
Meanwhile, gold prices surged to a record high for the second day in a row, while silver prices also jumped to fresh 30-year highs. Oil prices erased earlier gains to end slightly lower after the dollar regained ground in the currency market.
"Everything is really dictated by the dollar," said Ryan Larson, a senior equity trader at RBC Global Asset Management, noting that low trading volumes were adding to the market's lack of conviction. "The dollar is catching a bid and conversely we've seen the equity markets selloff modestly," he said.
Traders said the market is still adjusting to last week's announcement from the U.S. central bank, which officially unveiled plans to pump $600 billion into the economy via a bond-buying policy known as quantitative easing.
Some investors are betting the Fed policy will hurt the dollar and cause inflation to spike at some point in the future. As a result, they have been buying up gold as a hedge against rising prices. Others believe the extra liquidity will continue to boost stocks and commodities.
After climbing to fresh two-year highs last week on anticipation of the move, stocks have been drifting sideways since the Fed announced its plan.
"The lack of catalyst that is leaving traders without direction," said Larson.
The job market will be in focus Wednesday morning when the Labor Department releases its weekly report on initial claims for unemployment benefits. Investors will also take in reports on the U.S. trade balance and treasury budget.
In addition, investors are looking ahead to this week's meeting of leaders from the Group of 20 major economies, which starts Thursday in Seoul.
The meeting comes against a backdrop of tensions over global trade and currency policies. While expectations are high for the G-20 meeting, analysts said a definitive accord is unlikely to be achieved.
Stocks ended lower Monday amid a lack of economic data and strong demand for commodities.
Currencies and commodities: Gold and silver soared to new highs, while cotton prices rose 6% to another all-time high following a USDA crop report that cut the production outlook for 2011.
Oil prices slipped, erasing earlier gains, as the dollar recovered some ground. The dollar rose 0.7% on the euro, and gained the 0.8% versus the British pound. Against the Japanese yen, the dollar was up 0.4%.
Oil for December delivery fell 34 cents to close at $86.72 a barrel.
Gold futures for December delivery rose $6.90 to settle at an all-time high of $1,410.10 an ounce. Earlier, gold reached a record trading high of $1,422.10 an ounce.
Silver prices rose $1.47 an ounce to end at a 30-year high of $28.91.
Prices for commodities of all sorts have been rising recently as investors bet the Fed's accommodative policies will undermine the greenback. A weaker dollar typically supports commodities priced in the U.S. currency, such as oil and gold.
At the same time, some commodities are benefiting from concerns that Fed policy will lead to a bout of inflation at some point in the future.
"Investors are searching for potential alternatives in a world where paper currency, specifically dollars, may be less trustworthy than they once were," said Lawrence Creatura, a portfolio manager with Federated Clover Investment Advisors.
Economy: A government report showed that wholesale inventory levels rose more than expected in September, while a survey of small business owners showed optimism rose in October.
The Commerce Department said wholesale inventories rose 1.5% in the month from an upwardly revised 1.2% gain in August. Economists had expected a 0.6% increase, according to consensus estimates from Briefing.com.
The National Federation of Independent Business said its Index of Small Business Optimism gained 2.7 points in October, rising to 91.7. While the index remains below pre-recession levels, the NFIB said last month's increase reflects an expected improvement in economic activity.
Companies: Shares of Yahoo (YHOO, Fortune 500) rose 3% following reports that a group of private equity investors had approached Alibaba Group chairman Jack Ma about joining a takeover bid. The report is the latest in a series of takeover and merger rumors involving Yahoo in recent weeks.
Online travel booking service Priceline.com (PCLN) reported better-than-expected gains in third-quarter sales and profits. Shares of the company were up nearly 8%.
GE (GE, Fortune 500) announced a $2 billion investment in China through 2012. $500 million of the funds will be used to increase research and development, while $1.5 billion will be invested with joint ventures with Chinese state-owned enterprises. GE shares eased 0.6%.
Natural gas producer Atlas Energy (ATLS) said early Monday that it has agreed to be purchased by Chevron (CVX, Fortune 500) in a deal worth $4.3 billion. Atlas shareholders will receive $43.34 per share, in what is the latest deal in a string of large oil companies snapping up natural gas producers. Chevron shares fell 1.6%, but shares of other natural gas producers such as Cabot Oil & Gas (COG), Range Resouces (RRC), Chesapeake Energy (CHK, Fortune 500) and Southwestern Energy (SWN) all moved higher.
World markets: European stocks closed higher. Britain's FTSE 100 rose 0.4%, the DAX in Germany ticked up 0.5% and France's CAC 40 added 0.8%.
Asian markets ended the session lower. The Shanghai Composite fell 0.8%, the Hang Seng in Hong Kong dropped 1% and Japan's Nikkei declined 0.4%.
Bonds: The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 2.64% from 2.56% late Monday.