Dow Down on Mixed News: Thursday’s IP Market Recap

by Marc Bastow | August 23, 2012 5:07 pm

OK, three days is more than a blip — it’s a pattern. And what appears to be emerging is that nobody really knows how to parse economic information into consistent market action.

Take Thursday: The Labor Department reported first-time unemployment claims increased to 372,000 in the latest week, up from the previous week’s revised figure of 368,000, and more than the 365,000 economists had expected.

Then followed the good news: The Commerce Department reported new home sales[1] rose 3.6% to a seasonally adjusted annual rate of 372,000 in July, although median prices fell. That’s better than the 368,000 economists had expected.

Confusion and uncertainty reign — just what markets hate.

The result is the third down day in a row for the Dow Jones Industrials, but this time with a bit of a thud, dropping 0.88% to 13,057, while the S&P was hammered down 0.81% to 1,402, and the Nasdaq tumbled 0.66% to 3,053.

It was an ugly day everywhere, but especially in tech. Shares of computer maker Hewlett-Packard (NYSE:HPQ[2]) dropped 8% on the day after Wednesday’s dismal earnings announcement[3]. Shares are down nearly 35% over the last six months.

Dell (NASDAQ:DELL[4]) managed to stem some of the bleeding by holding losses to just under 4% for the day. Intel (NASDAQ:INTC[5]) followed suit with the others, dropping just under 3%, and even Apple (NASDAQ:AAPL[6]) fell just under 1%. That’s not a big number, but since it makes up almost 20% of the index’s weighting, Apple makes a big splash when it hits the water.

Troubles in discount retailing[7] continued as Big Lots (NYSE:BIG[8]) posted lower-than-expected results[9] and trimmed guidance for the remainder of the year. Shares finished lower by 20% on the day. Dollar General (NYSE:DG[10]) and Family Dollar (NYSE:FDO[11]) both finished down over 2% in lock-step with BIG.

Among clothing retailers, shares of Guess? (NYSE:GES[12]) tumbled 23% after reporting earnings that didn’t meet analyst estimates and cutting its outlook for the year. Abercrombie & Fitch (NYSE:ANF[13]), which recently announced similar lowered guidance[14] numbers, fell just over 2%.

The week ends with no further earnings reports scheduled for Friday.

Three Up

Three Down

Marc Bastow is an Assistant Editor at As of this writing he was long AAPL and INTC.

  1. reported new home sales:
  2. HPQ:
  3. dismal earnings announcement:
  4. DELL:
  5. INTC:
  6. AAPL:
  7. Troubles in discount retailing:
  8. BIG:
  9. posted lower-than-expected results:
  10. DG:
  11. FDO:
  12. GES:
  13. ANF:
  14. lowered guidance:
  15. NOK:
  16. CRUS:
  17. KKD:
  18. NAV:
  19. DLLR:
  20. VRA:

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