After Market: Calm Optimism as Stocks Hold Steady, Gold Sinks Below $1,200


Stocks took a breather Thursday after racing higher on Wednesday, and the price of gold sank to a three-year low. The major averages ended mixed -- and that's good news, as the market mostly held onto the huge gains that followed the Federal Reserve's taper announcement.

The Dow Jones industrial average (^DJI) edged up 11 points, the Standard & Poor's 500 index (^GPSC) slipped a point, and the Nasdaq composite index (^IXIC) fell 12 points.

But the price of gold slumped by $39 an ounce, closing below $1,200 for the first time in more than three years. Gold related stocks followed suit. Newmont Mining (NEM), Barrick Gold (ABX) and Goldcorp (GG) all fell about 1.5 percent.

Another story getting lots of play today is Target's (TGT) announcement that as many as 40 million credit and debit card customers may have had their account information stolen over the past few weeks. Target shares fell 2 percent.

Even though earnings season is still a few weeks away, earnings news was a big factor today.

On the upside:
  • Oracle (ORCL), up 6 percent. The software maker beat Wall Street profit and revenue estimates.
  • Food giant ConAgra (CAG), up 5 percent, after topping expectations.
  • And Pier 1 (PIR), also up 5 percent. Net slightly missed, but the retailer raised its dividend by 20 percent.

On the downside:
  • KB Home (KBH) lost 6 percent. Despite this years housing boom, the stock is now flat compared to a year ago.
  • Rite Aid (RAD) fell 10 percent as the drug store chain lowered its outlook for next year.
  • Winnebago (WGO) slid 14 percent, even though net jumped.
  • And Darden Restaurants (DRI) lost 4 percent. Net fell from a year ago, but the big news was the company's plan to sell or spin off its Red Lobster unit. That dragged on other restaurant chains. Cheesecake Factory (CAKE), Buffalo Wild Wings (BWLD) and Cracker Barrel (CBRL) all lost about 2 percent. Dine Equity (DIN) fell 1.5 percent.

What to Watch Friday:
  • The Commerce Department reports final revisions for third quarter gross domestic product at 8:30 a.m. Eastern time.
These major companies are due to release quarterly financial statements:
  • BlackBerry (BBRY)
  • CarMax (KMX)
  • Finish Line (FINL)
  • Navistar International (NAV)
  • Walgreen Co. (WAG)
-Produced by Drew Trachtenberg.

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Spin the gold story and maybe it will go back up.

December 19 2013 at 7:46 PM Report abuse -5 rate up rate down Reply

There is a "play" in metals, but it's not gold. The problem gold has is, after the gold ore is refined and the gold is cast or struck into coins and ingots, the gold sits and collects dust - it almost never gets consumed. As they find more, the total amount increases and the price drops. Unlike gold, commodity metals like copper, aluminum, and iron are used in manufacturing - some of it gets recycled but, for example in the case of iron, it simply rusts away.
Most of the "easy" sources of these commodity metals have been exhausted. What is left is the harder to extract deposits except for an iron mine in Africa but it has numerous start up problems with no clear fix in sight.
For example, it costs ten times as much to extract aluminum from the available bauxite ore powder as it does to simply melt down and re-use existing aluminum.
It is unlikely that copper, aluminum, and iron prices are going to drop. You could probably do a lot better if you own copper or aluminum ingots instead of gold ingots.
Right now the Chinese are operating their manufacturing plants 24/7 and they are a black hole for metals with no end in the foreseeable future.

December 19 2013 at 6:57 PM Report abuse rate up rate down Reply
Susan or Gerald

Here comes the gold free fall again.

December 19 2013 at 4:57 PM Report abuse rate up rate down Reply