Closing Bell: Stocks Tumble Again on Fed Stimulus, Earnings Worries

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Scott Eells/Bloomberg via Getty Images
Renewed concern that the Federal Reserve will soon throttle back its support for the economy and warnings of weaker sales from two major companies sent stocks much lower Thursday.

The Dow Jones industrial average (^DJI) tumbled 225 points, or 1.5 percent to 15,112, the Standard & Poor's 500 index (^GPSC) surrendered 24 points, or 1.4 percent, to 1,661, and the Nasdaq composite index (^IXIC) lopped off 63 points, or 1.7 percent, to 3,606.

More signs that the economy was slowly recovering appeared to weigh on the market. An improving economy raises the likelihood that the Fed will start backing off its monthly purchase of $85 billion in bonds. Many investors believe that the Fed's effort has underpinned the recent bullish stock market.


Among the numerous economic reports released Thursday were those that showed confidence among homebuilders rising to an eight-year high in August and weekly claims for jobless benefits falling to a near six-year low. Mortgage-buyer Freddie Mac also reported that mortgage rates held steady in the latest week, giving prospective homebuyers more time to lock in historically low levels.

Fresh data released Thursday also showed consumer prices rose broadly last month, and the number of foreclosures recorded in July fell 31 percent, putting the U.S. on track to end the year with the fewest home repossessions since 2007.

Data on manufacturing, meanwhile, were less encouraging, though economists were little fazed and said it merely suggested the improvement in factory activity was slower than had been anticipated.

In company news, Walmart Stores (WMT) shares fell 2.5 percent to $74.45 after the discount retailer posted disappointing same-store sales and missed revenue estimates for a fifth consecutive quarter. The company also lowered its revenue and profit forecasts for the year.

And Cisco Systems (CSCO) fell 7.1 percent to $24.48 as a slew of brokerages cut their price targets on the stock. The network equipment maker said Wednesday it will cut 4,000 jobs, or 5 percent of its workforce, as sales slow.

More Stocks in the News:
  • Shares of Cisco's smaller rivals, Ciena Corp. and F5 Networks, also ended lower. Ciena (CIEN) fell 5.6 percent to $21.24 while F5 Network (FFIV) slipped around 3.6 percent to $89.22.
  • One of the few bright spots in retail earnings was Kohl's (KSS), which reported a rise in quarterly same-store sales, sending its stock up 5.3 percent to $53.54.
  • Real-estate stocks headed lower on expectations that interest rates would rise. Equity Residential (EQR) lost 1.5 percent to $51.79, while Kimco Realty (KIM) dropped 2 percent to end at $21.29.
  • Billionaire investor George Soros added another 2 million shares to his stake in struggling retailer J.C. Penney (JCP), regulatory filings showed. The retailer's stock rose 5.5 percent to $13.83.
  • Warren Buffett's Berkshire Hathaway shed its stake in newspaper and broadcasting company Gannett Co. (GCI), which sent shares of Gannett falling 5.1 percent to $24.29.
  • Gun-maker Smith & Wesson Holding's (SWHC) shares dropped 7.9 percent to $11.22 after a KeyBanc analyst downgraded the stock to "underweight" from "hold," citing recent outsized gains in the stock's price, coupled with lower retail demand.
What to Watch Friday:
  • At 8:30 a.m. Eastern time, the Commerce Department releases housing-starts data for July, and the Labor Department releases second-quarter productivity data.
  • The University of Michigan reports its initial reading of August consumer sentiment at 9:55 a.m.
-Compiled from staff and wire reports.



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sirhalllaw

The Republican Congress from approximate 2006 time period created a framework that enabled the wealthy to become even more wealty. The consolidation of wealth upward into the hands of no more than 1% of the Country's population remains unparalleled in history. Add to that the Republican-controlled Supreme Court, lead by Justice Scallia (the Good Lord has a sense of humour as the name rhymes with "Scallywag") who allowed corporations to discharge pensions in bankruptcy and once can see just how the stage is set for the overwhelming majority of citizens to be nothing more than servants for the ultra-wealthy. The only way the current Republican politicians (they have lost their idioligal way from what used to be a good, moderate party) stay in power is through manipulation of the media. And, my fine feathered friends, truth is the first casualty. To a large degree, the result is synonomous with Emperor Nero placing the ass in the Roman Senate. The grab for power has taken on a new, sinister and quite disturbing aspect....the Supreme Court has gutted any voter protection and allowed Voter Registration requirements already appearing from the Southern States. They moved so quickly that the ink had not yet dried on the sham document denominated a "decision" by the Supreme Court. Should we act as President Bush did, and actually encouraged folks to do, simply disregard it and conduct our affairs reflecting our absolute contempt for both the decision and those who issued it? Larry

August 16 2013 at 9:11 AM Report abuse +1 rate up rate down Reply
michael_vici

中国隐秘共产党从我身上做了二十年人性精神虐待试验,中国可以发生这样虐待人的事情,中国没有希望了,我是真心希望中国亡国啊。既然中国有纳米分子的事情,那其他的国家也有。我希望能有替我伸张正义的人,因为我实在是受不了了,生活一点希望都没有。现在每天就是被虐待。到底还有没有公道正义,还有没有王法。到底谁能帮帮我啊,因为我的身上只有纳米分子,所以我没有任何办法去反抗,只能硬抗。我的感觉就是被软不垃圾的刀子使劲的插,隐秘共产党不一下子伤害我,就是慢慢的一点点的力度很大的变着法的去虐待我。在这里我寻求帮助。因为我实在顶不住了。手机号码13853788002

August 16 2013 at 7:52 AM Report abuse +1 rate up rate down Reply
k4jlp

Watch Commodity Futures tank as the big players get spooked and short and dump. Their SCAM of high speed software on trades ignoring oversupplies are coming to a end. Take a look at all the diesel leaving the Country then ask why everything you need like fuel, food, clothes are ALL going up. Diesel is actually much cheaper to refine than gasoline. The refineries are laughing all the way to the bank as they give you your empty wallet back. What a bunch of SHEEP we are....bah...bah...

August 16 2013 at 7:30 AM Report abuse +1 rate up rate down Reply
jrb359

Anyone really surprised here? The Fed has been artificially proping up the stock market for a while! The Obama Fat Cats were doing well while unemployment still remained high. Sooner or later it will return to where it should actually be.

August 16 2013 at 6:24 AM Report abuse +2 rate up rate down Reply
osailordayz7

home foreclosuers down because there's fewer homes to close down very simple.has nothing to do with the economy picking up..i don't see where and how it is ever going to pick up..the only thing i see is more self help homes and many many government subsidize apartments going up and many many more food stamp receipients...

August 16 2013 at 1:21 AM Report abuse +2 rate up rate down Reply
1 reply to osailordayz7's comment
mac2jr

Ohio, 10,000 homes for sale at $1.00 each.. go for it...

August 16 2013 at 2:34 AM Report abuse rate up rate down Reply
mac2jr

See my answers below

August 15 2013 at 11:05 PM Report abuse +2 rate up rate down Reply
mac2jr

Love... Passaic ... Gulf ... Erie ...

What do these have in common? The Love Canal, Passaic River, Gulf of Mexico, and Lake Erie are just some examples of the tens of thousands of sites that have each been polluted by industrial waste, harmful chemicals, toxins, lead, mercury, and such from American Companies that failed to protect the interest of the planet and those that live upon it, all in the quest for more profits for the owner's of the companies.

Who gets to pay for the massive destruction, health issues, and cleanup cost? You and I, the taxpayers of the U.S.A.

I am about to propose something that many will not like, but can be a means to an end. Since polluters tend to not be caught or go out of business when caught, thus leaving the taxpayer to foot the bill, perhaps the taxpayer should tax all business owners, before they pollute. The money to be used for cleanup of our roads, rivers, lakes, landfills, abandoned building sites, land destruction, etc.

This tax should be levied on all the business owners, which includes the Stockholders and other Investors that love to reap the profits, but balk at paying back the taxpayers for their cost of making things right.

A 1% tax on all buy and sell transactions should be sufficient.

August 15 2013 at 10:00 PM Report abuse -3 rate up rate down Reply
1 reply to mac2jr's comment
betty_brock

BP is paying PLENTY for the Gulf spill.

August 15 2013 at 10:12 PM Report abuse rate up rate down Reply
1 reply to betty_brock's comment
mac2jr

BP took a USA tax deduction for the cost of the cleanup. BP raised their gasoline prices 5 cents a gallon more than anyone else. BP is suing the USA taxpayers for cancelling its military gasoline supply contract. BP admitted guilt in the killing of the personnel, the marine life, and thousands of beach towns, but NOT ONE BP person went to jail..

August 15 2013 at 10:59 PM Report abuse rate up rate down
mac2jr

Are Regulations keeping you from Working, and if so, Why?

Quote "Government forced companies to move off-shore with stupid regulations."

Ok, the statement was made, now back it up, what stupid regulations, and at what level of
government.

We in business have to comply to LOCAL Fire Department, Zoning, and safety regulations. We have to comply to local tax laws, and business permit laws. We have to comply with the Building Codes and the EPA rules that protect our neighbors. We have to comply with Federal taxing authority rules and pay for the roads, bridges, infrastructure, and utilities we use to make our profits. We have to comply to Labor Laws, and Labor safety regulations.

Why did these rules and regulations come to being, it was because some of our Businesses in their quest for more and more profits cheated their workers, failed to support their neighborhoods, polluted our water and air, and in many instances caused body harm to workers and those living in the surrounding communities.

The FACT is, that Governments do not arbitrarily pass rules and regulations nilly-willy, but in response to a need or in response to a crime committed by the company against the citizens that are affected by that company.

So, you want less rules and regulation, wise up and stop being bad neighbors.

August 15 2013 at 9:59 PM Report abuse -3 rate up rate down Reply
1 reply to mac2jr's comment
betty_brock

Go ahead and drive the rest of industry offshore.

August 15 2013 at 10:13 PM Report abuse +1 rate up rate down Reply
1 reply to betty_brock's comment
mac2jr

Cleveland, Ohio's mayor just announced on CNN that the city is selling up to 10,000 abandoned homes for $1.00 each. Why are these homes abandoned, the Steel Industry, took the profits, failed to upgrade the plants and equipment, and then found itself in trouble due to foreign competition. So, instead of reinvesting in itself and America, and the City and People that produced the profits, the company closed shop and left the city and its people dissolute. This is happening all across America from small one-horse factory towns to major cities like Detroit.. Wake up America, we keep giving business TAX BREAKs, and they keep destroying our lives..

August 15 2013 at 11:04 PM Report abuse -2 rate up rate down
mac2jr

The reason given for the Stock Market to lose 300 points, by the Stock Exchange, was that there were too few people applying for Unemployment this week.

Now, what does that tell you about the sanity of the Stock Market and the people who invest in this Casino Crap Game...

August 15 2013 at 9:58 PM Report abuse -2 rate up rate down Reply
betty_brock

FIRE THE FED. We would be better off.

August 15 2013 at 8:51 PM Report abuse +1 rate up rate down Reply