Dow falls on consumer outlook

Consumer sentiment slips unexpectedly. Fed Chairman Ben Bernanke signals the central bank may take action. GE shares fall after sales disappoint investors.

By TheStreet Staff Oct 15, 2010 8:02AM

TheStreetBy Melinda Peer, TheStreet

 

Updated at 1:16 p.m.  ET

 

The Dow Jones Industrial Average was falling after consumer sentiment weakened unexpectedly, fueling doubts about the economy.

 

At 1:16 p.m. ET, the Dow Jones Industrial Average ($INDU) was down by 44 points, or 0.4%, at 11,050. The S&P 500 ($INX) was little changed at 1,174. The Nasdaq ($COMPX) was rising by 22 points, or 0.9%, to 2,458.

 

Consumer sentiment slipped to 67.9 in October from 68.2 in September, according to the University of Michigan's preliminary look at consumer confidence. The market had been anticipating an increase to 68.5, according to Briefing.com.  

 

Consumer spending accounts for two-thirds of U.S. gross domestic product, and it has been a source of concern among economists and investors.

 

General Electric (GE) was the worst-performing Dow stock, falling 4.6% to $16.38. The conglomerate said third-quarter sales fell 5% to $35.9 billion, falling short of estimates for $37.4 billion.

 

Bank of American (BAC) and JPMorgan (JPM) were down by more than 3%. Hewlett-Packard (HPQ) was the top gainer, adding 1%.

 

Stocks rose earlier today after Federal Reserve Chairman Ben Bernanke said he considers current conditions "to be a case for further action," according to the text of a speech he gave at the Federal Reserve Bank of Boston. He didn't say when any steps to boost the economy would happen.

The Fed is "locked and loaded," said Global Insight's Brian Bethune. "It is just a question of how much easing. William Dudley has already thrown the figure of $500 billion, so that could be the minimum we can expect," referring to the value of assets the Fed might purchase to encourage borrowing.

 

The Consumer Price Index, a measure of inflation, ticked 0.1% higher in September after rising 0.3% in August. That's slightly below the 0.2% growth economists had anticipated, according to Briefing.com. The core rate, which excludes volatile food and energy costs, remained unchanged as it did in August, which was weaker than the 0.1% uptick that economists projected. 

 

In comapny news, shares of Google(GOOG) jumped 11% to $598.72 after the search company blew past profit expectations for $6.67 a share with third-quarter adjusted earnings of $7.64 a share.

 

Hawk (HWK) agreed to be acquired by Carlisle (CSL) for $50 a share, or $413 million. Hawk shares were up 2.1% to $40.71, while Carlisle shares were falling 1.7% to $32.20.

 

Gannett (GCI) shares were sinking 6.6% to $13.16 after the media company's third-quarter results fell short of estimates. Third-quarter earnings rose 38% to $101.4 million, or 42 cents a share. Earnings from continuing operations were 43 cents, below analysts' estimates of 50 cents.

 

Mattel (MAT) stock was dropping 7.3% to $22.12 after the toymaker said third-quarter revenue rose 2% to $1.83 billion instead of the $1.94 billion analysts had expected.

 

Cosmetics maker Avon (AVP) said it will cut 400 jobs when it closes an Ohio factory. The shares were increasing 0.3% to $34.99.

 

In other economic news, retail sales rose 0.6% in September, exceeding expectations for an increase of 0.4% and coming in just below August's growth of 0.7%. Excluding autos, sales met economists' expectations for an increase of 0.4% after advancing 1% in August.

 

Manufacturing activity in the New York region strengthened in October as the Empire Manufacturing Survey came in at 15.73, up from 4.10 in September. Economists, according to Breifing.com, had expected a reading of 5.75 from the New York Fed. The level was much higher than the reading of 5.75 that economists had projected, according to Briefing.com.

 

Business inventories increased 0.6% in August, which was largely in line with the 0.5% uptick that Wall Street had been anticipating. August's growth compares with July's jump of 1.1%.

 

The afternoon brings the September budget report from the Treasury Department. Economists expect the budget deficit to have narrowed to $33.5 billion from $46.6 billion in August.

 

 

In commodity markets, crude oil for November delivery was losing 29 cents at $82.40 a barrel. The December gold contract was falling $8.10 to $1,369.30 an ounce.

  

The dollar was gaining value against a basket of currencies, with the dollar index up by 0.1%. The benchmark 10-year Treasury note rose 6/32, weakening the yield to 2.497%.

 

The FTSE in London shed 0.3%, while the DAX in Frankfurt was ahead by 0.5%. Hong Kong's Hang Seng slipped 0.4%, and Japan's Nikkei lost 0.9%.

 

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216Comments
Oct 15, 2010 8:21PM
avatar

Responder: Again, See below.

 

No.  Why don't you show us where I was proven wroing.  I think he's referring to  your Healthcare exemption statement yesterday, where I provided an opinion stating that you were in fact wrong.

It is really interesting how people like to rely on their sites, as if sites don't have errors due to oversight or bias.

You ought to try and read a book sometime.  You might find some interesting views by authors who put their name on the cover, not some anonymous guy hiding behind a computer.    Your statement here  implies that an author that puts his/her name on a book makes them credible and without bias. That's wrong.

And why oh why do you never hyperlink your info, because it can't be backed up.

I'm not a youngin, like I assume you are in regard to "hyperlink usage.  Plus, what good would it do.  You would likely disregard the information if it did not fit your political agenda. Responder, be careful here... you've done that yourself. You've dismissed links from myself from factcheck or politfact.com... People just want some information to back it up, for instance... Brutus has given my usefull links to BLS before.

Ignatius:  One day, maybe, you'll wake up and realize that liberalism is an failed ideology based on an erroneous world view and philosophy.  

Liberalism has been the ever growing predominant view in Europe and the U.S.  Is is any wonder that both Europe and the U.S. are declining in world influence and economic power.

But, hey, just keep on believing this failed world view.  One day you'll realize you were wrong when you look and see what it produces.   

 

 

Oct 15, 2010 8:09PM
avatar

Responder: See Below:

 

jar:

New ideas are needed.  When you post like this, it gives the appearance that you think Dems are a better alternative.  They're not. That is of course your opinion Responder, which I think you sometimes confuse with fact. You surely understand that you are not infallible...

For all my beefs with overspending by both parties, it is a fact that in the past 18 months our deficit is a record for anytime in our history.  The deficit for the past year exceeds the total of all presidents from George Washington to Ronald Reagan.   You're taking inflation to account I assume? I also notice you leave Reagan out? Why is that?

Oct 15, 2010 7:51PM
avatar
good old ronald reagon is the clown that started all this frikken mess people!!!!!!!!!!!!!!!!!! itz about time you folks wake up and smell the roses!!!!!!!!!!!!!!!! like my good friend "confussios" alway's told your's trulyl "those who goes to beddy-bye with a itchy azz, will most likely wake up with a very stingy middle finger!!!!!!!!!!!!!!!!!! :)Wink
Oct 15, 2010 6:53PM
avatar
And didn't someone prove you were a liar yesterday with factcheck.org?
No.  Why don't you show us where I was proven wroing. 

It is really interesting how people like to rely on their sites, as if sites don't have errors due to oversight or bias.

You ought to try and read a book sometime.  You might find some interesting views by authors who put their name on the cover, not some anonymous guy hiding behind a computer.   

And why oh why do you never hyperlink your info, because it can't be backed up.
I'm not a youngin, like I assume you are in regard to "hyperlink usage.  Plus, what good would it do.  You would likely disregard the information if it did not fit your political agenda.

Ignatius:  One day, maybe, you'll wake up and realize that liberalism is an failed ideology based on an erroneous world view and philosophy. 

Liberalism has been the ever growing predominant view in Europe and the U.S.  Is is any wonder that both Europe and the U.S. are declining in world influence and economic power.

But, hey, just keep on believing this failed world view.  One day you'll realize you were wrong when you look and see what it produces.      

 



Oct 15, 2010 6:45PM
avatar
I know you did.. but when Reagan and the Republican's held the senate. our deficit still went up.
jar:

New ideas are needed.  When you post like this, it gives the appearance that you think Dems are a better alternative.  They're not.

For all my beefs with overspending by both parties, it is a fact that in the past 18 months our deficit is a record for anytime in our history.  The deficit for the past year exceeds the total of all presidents from George Washington to Ronald Reagan.  

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