Stocks slip as stimulus jolt begins to fade

New York manufacturing also slows. EU finance ministers are in a deadlock over the debt crisis. Citigroup cuts its China forecast. Apple shares near $700 as iPhone 5 sales sizzle.

By TheStreet Staff Sep 17, 2012 9:12AM
Updated at 12:31 p.m. ET


By Andrea Tse 


Stocks traded lower Monday as the sugar high from the Federal Reserve's QE3 announcement last week wore off and global uncertainties crept back into the headlines.


The Dow Jones Industrial Average ($INDU) was down 30 at 13,564. The S&P 500 ($INX) was down 2 at 1,463. The Nasdaq Composite ($COMPX) was down 7 at 3,177.


A meeting of European Union finance ministers in Cyprus over the weekend resulted in a deadlock over how the region plans to combat the debt crisis, with leaders unable to work past their differences on a banking union, the role of the European Central Bank and the conditions of bailout requests.

In the U.S., the New York Federal Reserve said the Empire State manufacturing index dropped to minus 10.4 in September, compared with minus 5.9 in August and a consensus of minus 3, showing a quickening of contraction in the state's manufacturing sector.


Also weighing on sentiment was Citigroup's joining other banks in slashing full-year growth forecasts for China.


The major U.S. equity averages finished with solid gains Friday, capping a stellar week triggered by a bold stimulus plan outlined by the Fed. The Dow finished the week up 2.15%, booking a gain for the eighth time in the past 10 weeks and sixth time in the past seven sessions. Year to date, the Dow is now up 11.26%.


In corporate news, demand for the new Apple (AAPL) iPhone 5 has exceeded initial supply, making it the fastest-selling model ever and pushing the delivery date for some preorders to next month, Reuters reported. Apple said preorders topped 2 million in the first 24 hours. Preorders "have shattered the previous record held by iPhone 4S, and the customer response to iPhone 5 has been phenomenal," Philip Schiller, Apple's senior vice president of worldwide marketing, told Reuters.

Activist investment fund Starboard Value LP is expected to disclose that it has taken a 13.3% stake in Office Depot (ODP), The Wall Street Journal reported, citing people familiar with the matter. The stake would make Starboard the largest shareholder in Office Depot.

 

General Electric (GE) has hired Morgan Stanley to review its 33% stake in Thailand's Bank of Ayudhya, which could lead to a sale of GE's roughly $2.2 billion holding, Reuters reported.


The Treasury Department is resisting a push by General Motors (GM) to sell the government's entire stake in the automaker, the Journal reported. Regulators are investigating whether several major U.S. banks failed to monitor transactions properly, allowing criminals to launder money, according to The New York Times. The Office of the Comptroller of the Currency, the federal agency that oversees the biggest banks, is leading the money-laundering investigation, according to the newspaper. The report said that the OCC could soon take action against JPMorgan Chase (JPM) and that it is investigating Bank of America (BAC).


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156Comments
Sep 17, 2012 10:09AM
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Look for unemployment to turn back up; I mean real unemployment, not the false number from the false god. The internationals now own us.  Small business will continue to struggle as we continue down the evil path of the New World Order.  George Orwell has that Mona Lisa smile.  A kind of I told you so look.  We are living in a Fantasy economy based on lies and misinformation.  I think most everyone; even the most economically challenged, understand we are screwed.  The old adage of having nothing to lose is most appropriate for the next several years. If you have nothing to lose at this point the next several years will seem very normal.  For those of us who have worked hard, saved, and believed in the system formerly called Capitalism, we will suffer.  Hard to understand how destroying an economy that gave and provided so much to so many for so long could provide solice and enjoyment to so many Liberals.  Profits are evil,  failure is acceptable, religion is bad.  Any clue why we as a culture are faltering?
Sep 17, 2012 9:50AM
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Looks like it's finally time to pay the piper.  Our gov't has maxed out its credit card.
Sep 17, 2012 11:41AM
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QE 4 ever,.. Ben Bernanke reminds me of that CROOK Warden from The Shawshank Redemption..the people will be coming for you BEN...your going to go to jail.
Sep 17, 2012 10:07AM
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Of course it's going to fade. It's artificially inflated. Fiat money doesn't create jobs. Who is the genius behind this theory? Keynes? Marx? Bernanke? Job and GDP growth is created by producing more and consuming less. It's insane, spend your way to prosperity. That's like saying induce yourself with drugs to you get well or keep shooting yourself until you stop bleeding. This is why the BRIC nations are spanking the U.S. in just about every economic category . This is a very simple law of economics, high school level stuff. Why do these 'so-called' experts with PhD's have a hard time understanding this concept, it's not quantum physics or a quadratic equation.
Sep 17, 2012 9:48AM
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MSN News Flash ! Bank of America never ending QE III winner= 80 billion given to the Banking Cartel by the Fed=they Win we LOSE !

Dismantle the Federal Reserve it is a criminal operation ! We need a new Stock Market with a new set of Rules !!

Sep 17, 2012 10:55AM
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Bernanke is mentally ill and should be immediately processed for a psycologocal evaluation. I mean he's seriously nuts, not some minor depression that might be eased by paxil or zolof.

He has delusions that his money printing will work, even though it's not working and has never worked in the past. He deludes himself when he believes his policies won't cause more harm than good. He deluded himself when he said around 2005 that the subprime loan troubles would not spill over into the wider economy. Have you ever, ever seen this guy admit he was wrong, or even that he could be wrong? And he's always wrong!

Sep 17, 2012 10:25AM
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So you dopes out there bought into the benny and barry show, but alas it only lasted a day or two. Because over the weekend what did you do, listen to me, read some real news on the web, what? How can anyone tell me that printing more money is the answer to our economic woes? We have been doing that for the last 50 years. And that is why the gas I bought in 1964 at .25 cents is now $4.00 when using barry faced federal reserve notes. But wait if I still had a quarter from back then, I would have been able to purchase a gallon of gas, and guess what the sliver value in barry bucks today is over $4.00 dollar. Wow must just be some strange happening right, no print more dollars and we will end up like Germany between the war, or Zimbabwe today that has a Trillion dollar bill. Now I wonders whose face will be on our Trillion dollar bill, grinning like a jackass eating briers?

Sep 17, 2012 11:42AM
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Fair trade - USA can have an equal trade relationship with Canada, Japan, Western Europe and Australlia.  Why, same standard of living (more or less).  Wages and regulations are more or less the same and the shipping costs outweigh any minor wage differences.  Trade with nations like China and Mexico can't be free trade as they kill the more developed country. 
Sep 17, 2012 9:55AM
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Throwing money at our economic problem is not the answer.  The so called growing economy of the last two years is a product of money borrowed from other nations to prolong the inevitable.
Sep 17, 2012 10:27AM
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Try 'stocks slip' on 2nd U.S credit downgrade in O'Bammas 4 yrs. Obama and his wife mutt must go!!!!
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Europe is now down the tubes there will be no miracle savign of that economy.

 

The US while our economy has already failed and Bernanke just keeps printing money to keep the super rich people rich which is not helping the Death Spiral of lost jobs and an ever weaker and weaker economy we are in.

 

The housing boom they are talking about is 90 percent investment buyers who have cashed out of stocks and bonds and trying to push up the hosuing market to double their money. It's doomed to fail as the asset bubble Bernanke has created is about ready to bust and make poor people of us all.

 

Pretty much Japan is dead and as their trade with China comes to a complete stop there will be no saving Japan's economy either.

 

Have a great day but what ever you do SELL SELL SELL as we have reached the high point in the stock market and bond market for this business cycle and it's all down hill from here.

 

 

Sep 17, 2012 10:19AM
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History tells us that Central Banks always end up printing money to inflate the way out of excessive government debt.  QE3 is our Central Bank (The Federal Reserve Bank) following what China was recently criticized for:  Manipulating the currency.  Sadly, all that extra money they print devalues every dollar we have already earned - and saved - with the anticipated result being inflation.  Cost of food, energy, and most other purchases can't help but go up, with the reduced purchasing power of each dollar we own.  The result will be that the guy on main street, working hard for a living, dare NOT spend money on a new car or most other products because of the uncertainty of increased cost of living.  How many wheelbarrows of cash will it take to buy a loaf of bread?  We just don't know.  I fear for my children and  grandchildren.
Sep 17, 2012 11:21AM
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QE3 - printing money - all this is going to do is increase inflation, decrease the buying power of the consumer and increase unemployment. Devaluing the currency has destroyed more nations, civilizations and people then all the wars in history. Hyperinflation created Hitler. History tells us that devaluation of currency is caused by governments not have the ability to manage their budgets. I don't see anyone out there that has answers to our economic problems.  We are going down America and maybe when we hit bottom we'll get of our welfare a__ and solve the problem.
Sep 17, 2012 11:47AM
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Saudi Arabia oil minister says he will produce more oil to moderate the prices and Obama says he welcomes the gesture and the speculators keeps the same BS up about Israel and Iran to keep the market jittery. Maybe we need to hire the Saudi Minister and send the speculators to work the oil fields. Hell, they will get paid as much as they rip the consumers off and actually earn an honest days pay instead of stealing our money with more lies. And even if Obama releases all the oil in the reserves, the oil companies with their gas stations will insist that the gas they have at those stations must be sold first before they lower the prices. We consumers will still be dammed if we do and dammed if we don't. More, and more a bicycle looks mighty tempting until you need to oil the chain and you go to purchase a can of 3 in 1 and you have to pay $500.00 for it.
Sep 17, 2012 10:24AM
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World War Three, That will be the next correction. Mark my words. Only a matter of time. The world in general is just pissed. Lotta Itchy, Twitchy fingers out there. It's only gonna take one of them.
Sep 17, 2012 11:34AM
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Fat **** Cat

You really are ignorant.  If the USA cut it's defence spending by 10% is would still out spend the next 5 militarys combined.  No one is challenging the USA military directly.  Suicide bombing, embassy attacks are not something a "bigger army" can stop.  Even in Afghanistan the Talibans main tactic is to dig holes and put bombs in them at 3:00am and threaten the locals to not say anything. 

As far as lowing rates - they have been at historic lows for years..... years I say.  So another 0.2 percent lower is suddenly the answer we have all been waiting for.  IF YOU HAVE NO JOB YOU CAN'T GET A LOAN REGARDLESS OF THE RATE. 

Sep 17, 2012 10:28AM
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Oh and Happy birthday to the biggest dopes around today the OWS losers celebrating 1 yr. They are the ones that got us into this mess in the first place, with all the Dumbocrat supporting for the last 50 years. Now that it has blown up in their faces they will not admit to what they have done, no now theyr really mad at the system and they want hope and change.
Sep 17, 2012 11:34AM
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Wall St got another welfare check 3 days ago and and they are already crying for more. I feel so sorry for these rich  inbreed ba$tards ! Time to shut 'em down and divy up the cash for the rest of American people.

Sep 17, 2012 10:10AM
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Until the trade deficit is reversed, our economy cannot be restarted by stimulous. Our wealth as a nation continues to be spread to our trading partners.
Sep 17, 2012 9:56AM
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problem is that every one expects economic collapse and I believe many holding off investment spend until they know how next economic environment will look like.
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