Feb 28 2008
Stocks tumbled as oil prices reached toward $75
Stocks tumbled as oil prices reached toward $75 a barrel and tech shares continued their swoon. The Dow Jones industrials lost 122 points, or 1.1%, to 11,013. Intel (INTC, news, msgs) fell about 3%, Microsoft (MSFT, news, msgs) shed nearly 1.7%, and Hewlett-Packard (HPQ, news, msgs) lost 2.7%. The Standard & Poor’s 500 index fell nearly 14 points or 1.1% to 1,259. But the Nasdaq Composite was just plain clobbered, falling 38.6 points, or 1.8%, to 2,090. So far this week, the Nasdaq is down nearly 1.9%, and it is at its lowest level in a month. The Nasdaq 100 index ($NDX.X) was harder hit today, off nearly 32 points, or 2.1%, to 1,501. Crude oil rose to $74.95, up 1.15% from yesterday. The $75 level is considered a psychological boundary where the price may begin to harm the global economy. There were no heroes among tech stocks, unlike yesterday when KLA-Tencor (KLAC, news, msgs) juiced the sector by saying its order book looked pretty strong. KLA-Tencor itself was down 3.6% today, after jumping more than 8% on Tuesday. The Semiconductor Holders (SMH, news, msgs) exchange-traded fund was down 2.7%. Among indexes that Market Dispatches tracks, only the MSCI U.S. REIT index ($RMZ.X) was higher — just 0.3%. A decline in boat sales hits boat manufacturers Shares of Brunswick Corp. (BC, news, msgs), fell 7.7% today after the maker of Sea Ray and Boston Whaler boats and outboard motors said that second-quarter retail demand had declined significantly. The company didn t say why. The report left a number of traders wondering if the sales decline was a signal of declining buying sentiment among high-end consumers. Competitor Marine Products. (MPX, news, msgs) was down 6.1%, and West Marine (WMAR, news, msgs), the big retailer of boat supplies, was down 2%. The weakness among these recreation-related stocks also was seen elsewhere in retailing. Stock Charts (Year) Brunswick Home Depot (HD, news, msgs) fell 2% and hit a two-year low at $33.67 after a Bear Stearns analyst cut his same-store sales growth estimate. Lowe’s (LOW, news, msgs) fell 3.8%. The Standard & Poor’s Retail index ($RLX.X) was off 2.5% on the day. Wal-Mart Stores (WMT, news, msgs) and Target (TGT, news, msgs) were both down more than 2% on the day. Oil prices jump on big inventory drop Crude oil inventories sank by 6 million barrels last week, the Energy Information Administration reported. Analysts surveyed by Dow Jones had predicted that inventories declined by just 1.4 million barrels. Gasoline stockpiles fell by 400,000 barrels, about in line with analysts’ expectations. Ironically, oil stocks were lower. Exxon Mobil (XOM, news, msgs) and Chevron (CVX, news, msgs) were both off about 1%. Energy prices — New York close Wed. Tues. Chg. Month chg. YTD chg. Crude oil (NYMEX) (per barrel) $74.95 $74.10 $0.8500 1.38% 22.79% Heating oil (per gallon) $2.0184 $2.0106 $0.0078 2.76% 16.81% Natural gas (per million BTU) $5.7820 $5.6330 $0.1490 -5.28% -48.49% Unleaded gasoline (per gallon) $2.2559 $2.1925 $0.0634 2.49% 31.92% EU hits Microsoft with a big fine Microsoft shares fell after European regulators slapped a $357.3 million fine on Dow component Microsoft for not complying with a 2004 antitrust ruling to give information to server software competitors.Stock Charts (Year) Microsoft The fine covers 187 days at 1.5 million euros per day. Microsoft also faces a 3-million-euro-per-day fine if it doesn’t provide the information by then end of this month. (Microsoft is the publisher of MSN Money.) Microsoft general counsel Brad Smith told CNBC s Squawk Box that the company plans to appeal the fine, saying it has worked very hard to provide information since the 2004 decision was issued. But the dispute was not about compliance, but clarity about just what the company was expected to do, Smith said. Genentech falls on Avastin disappointment Shares of biotech company Genentech (DNA, news, msgs) fell 3.66%, a day after the company reported a second-quarter profit of 56 cents per share, 12 cents per share ahead of the Reuters Estimates consensus. But sales of cancer drug Avastin were at $423 million — shy of the expected $441.84 million. Deutsche Bank downgraded Genentech to “hold” from “buy,” citing valuation and few near-term catalysts for a stock rise, Briefing.com reported. And Prudential cut Genentech to “neutral” from “overweight” on the smaller market opportunity for Avastin and weaker-than-expected top-line growth. Oil services firm Halliburton (HAL, news, msgs) fell 0.93% on the day after The Washington Post reported that the U.S. Army will end its multi-billion-dollar contract with the company and use multiple contractors. U.S. trade gap widens Higher oil prices widened the U.S. trade deficit in May, but not as much as Wall Street had predicted. The May trade gap widened to $63.8 billion from $63.3 billion in April, the Commerce Department reported. Economists predicted the deficit to grow to $65 billion. The amount paid for foreign oil rose to $27.9 billion in May from $$23.9 billion in April. Overall, imports rose 1.8% in May, while exports rose 2.4%. The U.S. trade deficit with China rose 4% in May to $17.7 billion. Short hits from the markets — 4 p.m. Wed. Tues. Chg. Month chg. YTD chg. Treasurys 13-week Treasury bill 4.93% 4.92% 0.10 1.34% 23.59% 5-year Treasury note yield 5.08% 5.07% 0.04 -0.43% 16.56% 10-year Treasury note yield 5.10% 5.10% 0.00 -0.74% 16.04% 30-year Treasury bond yield 5.13% 5.14% -0.06 -0.98% 12.93% Currencies U.S. Dollar Index 85.60 85.03 0.570 0.88% -5.89% British pound in dollars $1.83 $1.85 -0.006 -0.90% 6.81% Dollar in British pounds 0.55 0.54 0.003 0.91% -6.24% Euro in dollars $1.27 $1.28 -0.005 -0.67% 7.52% Dollar in euros 0.7869 0.7832 0.004 0.68% -7.00% Dollar in yen 115.50 114.26 1.240 0.96% -2.01% Commodities Gold $651.20 $643.10 $8.10 5.71% 25.50% Copper $3.67 $3.64 $0.0250 5.85% 69.56% Silver $11.56 $11.55 $0.00 6.66% 29.98% Crude oil (NYMEX) (per barrel) $74.95 $74.10 $0.85 1.38% 22.79%