Stocks extend losses after jobless claims tick higher
Applications for unemployment insurance rise unexpectedly. Sales of new homes climb. Weak economic reports out of Europe and China overshadow hopes for more Fed stimulus. HP's shares slip after its revenue misses forecasts.
Updated 11:55 a.m. ET
Stocks fell Thursday after applications for U.S. jobless claims unexpectedly ticked up last week. Also, disappointing economic data out of China and Europe pointed to stalling global growth, while hopes of a swift stimulus action by the Federal Reserve dimmed. Hewlett-Packard's (HPQ) shares plunged after the company missed revenue estimates Wednesday.
The Dow Jones Industrial Average ($INDU) was down 86 points at 13,087. The S&P 500 ($INX) was down 7 points at 1,406. The Nasdaq Composite ($COMPX) was down 12 points at 3,061.
Applications for U.S. jobless benefits rose slightly last week, the Labor Department reported Thursday. Initial jobless claims increased by 4,000 to a seasonally adjusted 372,000 in the week ended Aug. 18. That's the highest level in five weeks and above the 365,000 level economists had expected, according to Briefing.com. The Labor Department revised the prior week's number to 368,000 from 366,000.
U.S. factory activity edged up to 51.9 in August from 51.3 in July, the first monthly increase in five months, according to Markit's flash manufacturing Purchasing Managers Index.
Housing data not enough to boost stocks
Sales of new single-family homes climbed by 3.6% to an annual rate of 372,000 in July from 359,000 in June, the Commerce Department said Thursday, surpassing economists' estimates of 368,000, according to Briefing.com. The Department also revised June sales up from an original reading of 350,000. The July increase is the third in four months.
Prices of new homes, however, fell 2.1% in July from the previous month to a median price of $224,200 as the inventory of new homes on the market fell 0.7% to a record low of 142,000 in July. At July's sales pace, it would take 4.6 months to clear the houses from the market, down from 4.8 months in June.
Fed minutes provide hope
Wednesday afternoon, the Federal Reserve released the minutes from its latest Federal Open Market Committee meeting. The minutes showed readiness among many policymakers to further boost stimulus -- possibly by another round of bond buying -- unless they see "substantial" signs the economy is poised to rebound.
U.S. stocks trimmed losses Wednesday after the minutes to close mixed. While gold rose to a 16-week high, the dollar fell to a two-month low. The euro rose to a seven-week high against the dollar. Oil also rose on stimulus hopes.
On Thursday, however, investors hopes for a swift action dimmed somewhat after certain Fed members pointed to improving U.S. economic data recently.
Fed Chairman Ben Bernanke is set to speak at a symposium in Jackson Hole, Wyo., on Aug. 31. Many economists expect Bernanke to announced stimulus then, or at least provide even more clarification.
Data out of China and Europe cause concern
China's manufacturing may contract at a faster pace in August to the weakest level since November, according to a preliminary reading released by HSBC, signaling more monetary and fiscal stimulus may be needed to secure a second-half growth rebound.
A preliminary composite purchasing managers' index showing private-sector business activity in the eurozone contracted for a seventh consecutive month in August. While the August figures show a slight improvement, together the recent readings point to a contraction in GDP in the eurozone.
St. Louis Federal Reserve President James Bullard, in a CNBC interview Thursday, voiced his skepticism over the outlook for the eurozone and warned that the best hope might be for the region to just "muddle through" its sovereign debt crisis.
Greece problems still loom overhead
Meetings over the next few days involving German Chancellor Angela Merkel and French President Francois Hollande are also in the headlines. The two leaders are expected to present a united front, telling Greek Prime Minister Antonis Samaras not to expect any leeway on its bailout agreement unless it sticks to its terms.
Stocks to watch
Dow component Hewlett-Packard's (HPQ) shares slipped after the computer maker reported better-than-expected adjusted earnings but missed on revenue. Deutsche Bank analysts slashed their price target to $15 a share from $20 and reiterated their "sell" rating.
Big Lots (BIG) shares plunged Thursday after the retailer reported declining profits that also missed analyst expectations on higher costs and a loss at its Canadian operations. The retailer also cut its full-year adjusted earnings forecast.
Shares of steel companies AK Steel (AKS), Steel Dynamics (STLD), Nucor (NUE) and U.S. Steel (X), among others, dropped after Dahlman Rose downgraded the sector because analysts believe steel prices are at their peek.
- More analyst call here.
General Motors' (GM) German unit, Opel, agreed with labor representatives to cut the hours of several thousand workers at two of its four German plants in response to a drop in demand for cars in Europe, Reuters reported. GM lost $747 million on its European operations last year.
is looking for work."
The German doctor comments: "That's nothing, in Germany we take part of the
brain out of a person; we put it into another person's head, and in 4 weeks
he is looking for work."
A Russian doctor says: "That's nothing either. In Russia we take out half of
the heart from a person; we put it into another person's chest, and in 2
weeks he is looking for work."
The U.S. doctor answers immediately: "That's nothing my colleagues, you are
way behind us....in the USA , about 3 and a half years ago, we grabbed a
person from Chicago with no brain and transplanted him in the White House ,
and immediately after....... the whole damn country was looking for work."
Jobless claims tick up unexpectedly.
Unexpectedly..........oh........ so you libs thought we were in a recovery again. Get your heads out of sand and try listening/reading to someone else besides the bs your party is feeding you. How many times can you actually get screwed before you realize you are getting screwed.
I wonder what the revised jobless number will be next week. Up or Down?
The illusion of the American free market - there is in fact no free market in the USA folks. A free market does not have 2 sets of workers (legal and illegal) working for 2 sets of wages. A free market does not have subsities for certain types of businesses (oil companies, farmers, ethanol) nor does it have special tax breaks for them. It would also not have medicare subsities either. It would not have different business rules from state to state nor would it have tarifs on imports. The problem is most countrys do not have anything close to the free market yet America continues to suffer as it opens it's markets when others keep theirs closed or impose BS conditions (looking at you China). Free trade really only works between countrys with similar living standards, USA, Canada, Western Europe, Japan & Australlia could have pure free trade agreements as wage costs are not that far off in each country. Poorer countries benefit 10 times as much as rich countrys in these agreements yet Mexico is part of NAFTA. Anyone else think we need a reset button?
President Obama said, 'We tried our plan, and it worked.' With the unemployment rate going up again, it's obvious that plan didn't work at all," Be that likely voter and go to the polls on November 6th 2012 and vote the Blamer/Complainer/Campaigner-in-Chief out of office!
All this bad news and guess what? Oil is still climbing. It's a good thing the job market didn't UNEXPEDEDLY get better or we would be paying 10 dollars a gallon for gas. I would love to meet the clowns on Wall Street face to face one time. Why can't everyone see what is killing the economy? GAS GAS GAS!!!!!! Drop the price of gas and food and promise to keep it down and watch the economy explode you freakin dummies!! The sad part is our so called government lets these people get by with the same ole stupid a@@ excuses over and over again to raise the prices. I wish they would grow a set of balls and stand up to these people for once. I am a firm believer that the government is behind all of it anyway. The whole damn country is crooked.
1. You didn't build that business!!!
2. The private sector (job market) is doing just fine!!!
Let's cut out the nonsense on women's rights (not the real issue but a diversion) and about people not paying enough taxes and talk about the real issues.
If you are married, have 2 kids, make $100,000 in 2012 and take the standard deduction (do not itemize); you will have a taxable income of $72,900.
Standard deduction 11,900-
4 x $3,800 deductions 15,200-
Taxable Income $72,900
First $17,400 taxed at 10% = $1,740
Next $53,300 $17,401 to $70,700 taxed at 15%= $7,995
Next $2,900 $70,701 to $142,700 taxed at 25% =$ 725
TOTAL TAXES DUE $10,460
Effective tax rate based on TAXABLE INCOME ($10,460 divided by $72,900 = 14.35%
Effective tax rate based on TOTAL INCOME ($10,460 divided by $100,000 = 10.46%
The 10.46% is your real effective tax rate. If you are not informed, then you will be sucked in to the retherioc. Can you tell me what your actual income tax paid in 2011 was? Or can you just tell me the additional taxes you paid or received as a refund?
Who passes tax legislation? CONGRESS DOES - But these people want to rant and rave about taxpayers taking advantage of the same tax breaks they take and passed into law. It is smoke and mirrors. Both parties use smoke and mirrors - why you must be informed.
Watching DANCING WITH THE STARS, THE BACHELOR, AMERICAN IDOL etc. will not make you an informed person - but rather a gullible uninformed person.
It would be best if that 90% go to some remedial programs for math and English and then learn something useful like a trade or farming.
Forget about the usual junk degrees like undergraduate business degrees, ethnic studies, and now even a course in "Occupy Wall Street" offered at Columbia University.
"The private sector is doing fine"..... "Would you like some dog with your kool-aid"?
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The solid report comes a month after the retailer closed all of its Canadian operations.
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