After Market: The Better the News, the Harder Stocks Fall

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For the second day in a row, stocks faltered despite -- or rather, because of -- some really upbeat economic news. The Commerce Department said that U.S. GDP grew at a 3.6 percent annual rate in the third quarter, revising that number upward from an earlier estimate of 2.8 percent. That's a big jump in terms of how these things usually go. And a second report showed a big drop in first time jobless claims.

So, concern is popping up once again that the Fed will begin tapering its stimulus program sooner than previously thought. As a result, the Dow Jones industrial average (^DJI) fell 68 points -- its fifth straight loss. The Standard & Poor's 500 index (^GPSC) dropped 8 points, and the Nasdaq composite index (^IXIC) lost 5.

Shares of Microsoft (MSFT) fell 2.5 percent while Ford (F) gained nearly 1 percent after Bloomberg reported that Alan Mulally said he will stay on as CEO at Ford through 2014. He had been considered the top candidate to succeed Steve Ballmer as head of Microsoft. Ballmer plans to retire next summer. Mulally is regarded as one of the nation's most respected business executives.

Retail stocks had another rough day. Walmart (WMT) fell 1 percent and J.C. Penney (JCP) fell 8 percent after a big investor sold his stake in the company. Costco (COST) lost 1.5 percent after posting disappointing sales for last month, hurt by falling gas prices and a drop in sales of consumer electronics. And teen apparel retailer Wet Seal (WTSL) got soaked with 14 percent drop as its losses widened and it issued a weak holiday sales forecast.

But there were some gainers on retail row. Dollar General (DG) rose 6 percent on better than expected earnings. It says the average shopper is spending more per visit. And Conn's (CONN) surged 19 percent. It posted a big sales gain and upped its earnings estimate for the year.

Elsewhere, Apple (AAPL) added nearly 1 percent after reportedly finalizing its deal for China Mobile, the world's biggest mobile telecom company, to sell iPhones in China.

Puma Biotech (PBYI) soared 68 percent on positive test results for its breast cancer drug.

But Electronic Arts (EA) fell 6 percent because of ongoing problems with its "Battlefield 4" video game, one of the company's most valuable franchises. As a result, EA is halting some other projects.

What to Watch Friday:

  • Retailers American Eagle Outfitters (AEO) and Big Lots (BIG) report quarterly corporate earnings before markets open in New York.
  • At 8:30 a.m., the Labor Department reports November jobs data, and the Commerce Department releases personal income and outlays for October.
  • The University of Michigan releases its initial survey of consumer sentiment for December at 10 a.m.
  • The Federal Reserve reports on Americans' use of consumer credit for October at 3 p.m.
-Produced by Drew Trachtenberg.


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14 Comments

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k4jlp

Again here we have a system that PRODUCES NOTHING except a transfer of wealth from YOUR WALLET TO THEIRS. It's a fun game to them, played on a continous level.
What better way to make money by using others wealth to gamble if you have no other skills to offer? It does not matter to them if you fail or if America fails, as a matter of fact they have figured out how to still profit if a gamble fails, can you say 'BLACKSTONE"?

December 06 2013 at 7:43 AM Report abuse rate up rate down Reply
1 reply to k4jlp's comment
dweeeb.buster

Purchasing a piece of an American business does not transfer wealth from your pocket to anothers. In fact, the private sector is what creates wealth..

If you're too stupid to participate, just opt out.

December 06 2013 at 10:02 AM Report abuse rate up rate down Reply
1 reply to dweeeb.buster's comment
k4jlp

Mr. dweeb,
No, I assure you I'm not stupid, just wide eyed opened enough for see your bs..I don't have time to explain to you how the Commodity Market can and is manipulated. My reference to the transfer of wealth referes to how certain groups grab money from MY wallet via control of the supply of crude/gasoline therefore control of the price Perhaps you should re-read by previous post. The price of EVERYTHING else we buy is tied to the cost of ENERGY. If you cant understand or see that, your way to far gone already to convince of anything...have a great day!

December 06 2013 at 10:19 AM Report abuse rate up rate down
Davie2743

There no doubt is some behind the scenes manipulation going on here.

December 05 2013 at 10:43 PM Report abuse rate up rate down Reply
2 replies to Davie2743's comment
ferrariqx

Really? To what end?

December 06 2013 at 12:34 AM Report abuse rate up rate down Reply
dweeeb.buster

Probably the flying pigs again.

December 06 2013 at 10:03 AM Report abuse rate up rate down Reply
Paul L. Chomi

In spite of better economic news the Stock Market fell, WHY??? bcoz Investment Bankers and Financial Managers are manipulating the STOCKS. There is a very influential group which can dictate what happens in the Exchanges, to misled people on the true economic situation of the U.S. economy... Gordon Gekko, says... That GREED is good, as long as nobody complains...Gbu

December 05 2013 at 10:33 PM Report abuse rate up rate down Reply
rbearland

The expectation is increase in interest rates which drive down dividend stocks and bonds.
The markets are very smart and tend to predict the future most of the time.

December 05 2013 at 10:32 PM Report abuse -1 rate up rate down Reply
1 reply to rbearland's comment
k4jlp

What you really mean is "the markets are smart and know how to shape the future" right?

December 06 2013 at 8:02 AM Report abuse -1 rate up rate down Reply
1 reply to k4jlp's comment
dweeeb.buster

What the original poster really meant is that for most, no explanation is necessary, while for you dumbest 1%ers, none is possible.

December 06 2013 at 10:05 AM Report abuse rate up rate down
juststeve35

Again, irrefutable proof that much of what drives The Street is nothing more than speculation and reliance on the free flow of Federal dollars via QE.

December 05 2013 at 10:16 PM Report abuse +1 rate up rate down Reply
mmmgoblue

Money managers, working at the bedrock level of capitalism & ideologically opposed to any serious government regulation today in one voice told the world they are fearful the fed will stop doing the very thing they complained it was doing for too long. Go figure.

December 05 2013 at 6:51 PM Report abuse +2 rate up rate down Reply
joejoegolfn

What happens in the third and 4th quarter? Back to school purchases that parents must make and hiring for the Christmas holidays. Spending was down 4 Percent over the Thanksgiving weekend. If the fed wasn't pumping in 85 billion a month, the stock market would not be over 12000. This whole economy is a lie. Unemployment/underemployment is closer to 20 percent. Wait till Obama care completely kicks in. Can you say DEPRESSION

December 05 2013 at 6:21 PM Report abuse -1 rate up rate down Reply
1 reply to joejoegolfn's comment
ferrariqx

Gosh! You doom and gloom people never stop, 'eh? If I only had a nickel every time you right wingers predicted an Obama led Depression. (sigh)

NEXT!

December 06 2013 at 12:42 AM Report abuse -2 rate up rate down Reply