Stocks slip after housing data, ahead of Fed minutes

July home sales show market strength. Investors hope central bank policymakers will hint at more stimulus. Japan's trade deficit heightens worries about a global slowdown. Dell warns of a tough second half.

By Melly Alazraki Aug 22, 2012 9:18AM
Updated at 12:14 p.m. ET

Stocks remained lower Wednesday as global slowdown concerns once again took center stage after Japan reported weak economic data. As investors awaited the minutes from the Federal Reserve's most recent policy meeting, housing data continued to show improvement. Shares of Dell (DELL) were sliding after the company on Tuesday warned of a challenging second half.

The Dow Jones Industrial Average ($INDU) was down 59 points at 13,144. The S&P 500 ($INX) was down 4 points at 1,409. The Nasdaq Composite ($COMPX) was down 3 points at 3,064.

Asian markets ended lower after Japanese data showed the country's trade deficit widened more than expected in July as exports plunged.

European shares followed suit, and U.S. markets seemed on their way to join the global decline. As one of the largest exporters in the world, Japan reported numbers that could imply weaker global demand. Japan's trade data showed shipments to China and Europe plunged 12% and 25%, respectively, in July from a year earlier.
European debt crisis
In Europe, equities were under further pressure ahead of several meetings between Greek Prime Minister Antonis Samaras and several European leaders. Greece will ask for some breathing room, making the case to extend the implementation of the country's austerity program by two years. If Greece doesn't get the support it needs to deal with its debt crisis it may have to leave the euro, destabilizing other eurozone countries and the currency.

In recent days, Europe has mostly gathered strength on hopes that the European Central Bank plans to implement a bond-buying plan in September to help the region out of its debt crisis. The plan, however, has been hyped, criticized and downplayed, leading markets along higher or lower.

Fed minutes
But even as investors try to fully comprehend the meaning of the goings on in Europe and globally, they'll be waiting for the Fed's minutes.

At 2 p.m. ET, the Fed will release its notes from the latest Federal Open Market Committee meeting on July 31-Aug. 1.

Investors will pore over the minutes to get a better picture of the state of the U.S. economy and perhaps find hints as to the Fed's plan about the possibility of a third stimulus program, QE3. Many hope such a program will be unveiled at the Jackson Hole, Wyo., symposium on Aug. 31. Many doubt, however, the minutes will provide any clear signal to the Fed's intentions, especially given recent better-than-expected U.S. economic data.

Housing resales jump
Sales of existing homes rose 2.3% in July from the previous month to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors reported Wednesday. Economists expected a pace of 4.5 million. Sales rose 10.4% from the same month a year earlier. The median price of existing homes climbed 9.4% year on year to $187,300, and inventories rose 1.3% to 2.4 million units, representing 6.4 months of supply.

Also, weekly mortgage applications declined a sharp 7.4%, the Mortgage Bankers Association said. Applications for refinancing tumbled 9% as interest rates edged higher.

CBO warns of recession risk
The nonpartisan Congressional Budget Office warned of a recession risk because of the "fiscal cliff." The CBO predicts that the U.S. economy will grow at a 2.1% pace in 2012. But if Congress fails to act to maintain current tax rates and avert deep cuts to federal spending, the U.S. would experience a recession, with unemployment rate jumping to about 9% in the second half of 2013 from its current 8.3%.

The CBO estimates the U.S. government will run a budget deficit of $1.1 trillion in fiscal 2012, or 7.3% of gross domestic product, slightly lower than the agency's March estimate.

Stocks to watch
Dell (DELL) shares slipped after the No. 2 U.S. PC maker beat analyst earnings estimates but warned of a challenging second half, slashing its full-year outlook. Customers, it said, cut back on computer purchases ahead of the launch of Microsoft's (MSFT) Windows 8 software. In general, though, Dell is struggling to compete with cheap Asian rivals and the adoption of tablets. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Hewlett Packard (HPQ), which is also due to report results after the close, saw its shares decline after Dell's results.

Luxury home builder Toll Bros. (TOL) earned 36 cents per share for its fiscal third quarter, double analyst estimates. Revenues also came in above consensus. "Housing is on the mend," executive chairman Robert Toll said. CEO Douglas Yearley added, "We believe the housing recovery is being driven by pent-up demand, very low interest rates and attractively priced homes." Yearley, however, explained that because the company is focused on the luxury market, it is facing less competition from other builders. 

American Eagle Outfitters (AEO) shares rose after the retailer said it will meet or beat Wall Street's earnings target for the third quarter.

Williams-Sonoma (WSM) shares soared after the company reported results that beat Wall Street expectations. Meanwhile Express (EXPR) shares slipped after the retailer reported a 26% rise in profit, but cut its full-year earnings projection.


BHP Billiton (BHP) is postponing or scaling back projects together worth more than $50 billion, a reversal from a previously aggressive expansion strategy and a sign that the mining boom has ended, The Wall Street Journal reported. BHP Billton said annual net profit fell 35%.

Fifth Third Bancorp (FITB) approved a stock-buyback authorization for up to 100 million shares. In addition, Fifth Third's directors are likely to consider a dividend increase next month.

Apple (AAPL) and Samsung lawyers made their closing arguments Tuesday. Now it's up to the jurors, who have to answer 600 questions before they make a decision.
174Comments
Aug 22, 2012 4:35PM
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Tumbleweed the guy is only a moron...If he had a brain he would take it out and play with it....

Many are nothing but scumbags out of the GUTTER...

 

Others are highschool kids, that have probably been held back a couple years and are down in their Mommy's basement,trying to jerk your chain....

Takes them quite a while to post, because they have a grade school dictionary; Trying to look up big words so they sound important,educated,older or all knowing.

 

Just don't pay much mind to them...I don't.

Aug 22, 2012 3:32PM
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 Futher clarification. You merely find a dude wanting to borrow money and match him up with someone who wants to lend it. You pay 4% to the lender -- better than 2%, right?--and turn around and lend it at 12%- better than 24% right?-- no bank deposits or leveraging required, just insurance.You simply take it from the lender and give it to the borrower, grossing 8% and netting 4% after costs
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When asked what his favorite food was, Obama replied "I sure do love the leftovers from a bris"!
Aug 22, 2012 3:06PM
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Banks offer 2% on CDs and get 24% on  credit cards. If you were to pool local money you could offer double the CD rate at 4%, half the credit interest to 12%, pay 4% for deadbeat insurance and overhead and still make 4% on the deal just for bringing everybody together. And the money all stays local, EVERYBODY is happy-- except for the big banks. But I think it is all illegal unless you are framed as a bank.
Aug 22, 2012 2:49PM
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 Can you imagine the Hell on Earth of being a banker WITH the empathy gene and actually having to take all that whining and moaning from your pathetic ,loser, deadbeat, customers seriously?? FAR better to just do without-- the gene that is. Cry me a river pal , says non empathetic  CEO Mozilla of Countrywide fame But he luvs Ayn too
Aug 22, 2012 2:45PM
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Fatty Cakes......The footing is more important then the wall thickness, most contractors would probably know that ?? But, probably not Willard...

 I'm guessing that different locals have different zoning regulations also; Don't think there are any FEDERAL STANDARDS covering 9' walls...?

 

If I lived in Hurricane country or sweltering Desert areas, I would want thicker walls also, basement or other wise...

Go Barack Go.....Take them to the mat or woodshed....Wahooooooooo!

Aug 22, 2012 2:36PM
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MM consider this.The biggest " business" deposits in any given county in the US comes from selling illegal drugs
 So to be competitive the banks have to attract and welcome that money. you snooze you lose out to the bank across the street
 So the inference is that it is in the best interest of your bank's bottom line if Junior gets hooked on whatever
 Like they say about the lottery, the fools are going to waste it on whatever anyway so why shouldn't the State get a slice of the stupidity money to pay for Junior's school. Right on and ditto say the banks. Lets's just say they lack the empathy gene
 There's a phrase for it: Eyes Wide Shut
Aug 22, 2012 2:07PM
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 Actually Fat Cat my business insurance bond and license are still active. I am solvent for about 10 more years without having to work at all  thanks to gold and SS, and after that its reverse mortgage time if necessary. I just keep the license to be legal for when a word of mouth job comes along like a deck rebuilds or replacements,  or to repair rotting sheds and garages---high demand jobs in a wet climate, even on foreclosed homes. A weekend or two a month will provide a lot of gravy money at $30 an hour
Aug 22, 2012 1:39PM
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 New GFS just in. If true Tampa airport will definitely be shut down from about noon Monday to 8 PM Wednesday. All of Florida and Southern Georgia are going to get soaked big time, as Issac heads back out to sea and reforms. Atlanta does not look like a good place to relocate nor any city in Florida or South Carolina. Houston maybe? They gotta be worried after seeing the GFS
Aug 22, 2012 1:31PM
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Mr. Fat Cat.................................hehehehe.............................so too was Adolph Hitler, Hess and Goerbles--in public, as they were getting rich building themselves mountain retreats at the expense of a post WWI Germany that hid a Dictator with tax-exempt status and all the hypocrisy of his promises to Germany for a 1,000 year Reich that lasted 12-miserable years and cost the world, its innocents.

 

Well said Mr. Fat Cat.  Hitler too was deposed just like any Tyrrant or Tyranny that stands against the Common Man.  Anyone can put on a facade for the public.  Just like how many Psychologists and Psychiatrists offer thier wisdom for sale whilst thier own homes are in crisis--how many seek to exorcise the demons of others, whilst thier own houses lay in evil turmoil?

 

How's your house looking Fat Cat?  Hmmmmm??? 

Aug 22, 2012 1:24PM
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I am NOT the famous Michael Moore by the way.

 

I worked on Wall Street and in Banking.  I assure you I know exactly what I am writing and who my writings are aimed at............................those using the system against itself to destroy America by its own Rule Of Law.  Too bad Eric Holder and the corrupt FBI are out of their league--it will cost Obama his re-election and bring slavery to America once again, except this time, you won't have to be a black or minority--it will be anyone without an Ivy League college degree or those who are deemed "undesirable" and economicly challenged--the Poor and Working Poor who voted themselves right into oblivion.

 

Too bad.

Aug 22, 2012 1:19PM
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The hurricane is headed my way, say a prayer for me. I have never seen one before.
Aug 22, 2012 1:15PM
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To avoid complete and utter global war and the final end of the human experiment...........

 

1.  Destroy the G-20 and create a Corporation based on U.N like organizing intented to set global trade policies, enforce embargos and set banking regulations.

 

2.  What is made in a country stays in that country for direct consumption.  Global Trade should be restricted to only indiginous raw produce--percious metals, gems and stones should be monitored by a global consortium like OPEC.  There is NO rule against Nike for instance, existing in every country it wants to sell its products, but it must manufacture them in that country if that country wants to consuem Nike products.  This creates jobs for direct consumption and clarifies M-1, M-2 and M-3 indicies with easily trackable employment to consumption indicies.

 

3.  End black box static trading along with Short Selling and the use of cross-trades for hedging--an end of for instance, buying Puts on one maket while selling Calls on another then using Bonds to gurantee stop losses.  Commodities and Currencies markets should include drug testing of its Traders, Chair Holders and Brokers--on down to the Arb Clerks and Runners to rule out the Mob and Drug Dealer links to organized crime who educates thier future gang members through Harvard and other awesome universities, who go on to teach the Criminal how to collude and beat the street.  In other words..........................a [4] NO TOLERANCE rule for organized criminal enterprises using Wall Street for money laundering via Mortgage Lending linked back to Lenders who used AIG to engage in an Insurance Scam.  Junk Mortgages backed by Mob money created by stock options leveraged overseas by foreign banks in Switzerland, England and The Caimen Islands, who took points to lend back to the U.S banks, those "AIG Insured Loans" at Loan Shark rates--first the teaser rates then the hidden "Variable Rates" which destroyed the U.S Housing Market.

 

5.  Follow the Money Rule--enact a law that simply allows the SEC to see a clear flow of money before allowing trades by CEOs and Major Bank executives.  In other words, if I am a CEO and I opt for a miniscule salary with huge stock options and profit share that are unrealized income until I exercise those compensations, and I park them in the UK at Barclays for instance, and then Barclays allows me to leverage them (borrow against them) to underwrite  Junk Mortgages knowing that AIG and the FDIC are insuring them.......................................then what is that called?  A Pyramid Scheme and under RICO is also conspiracy to engage in a Criminal Enterprise.  First, its' tax-evasion because it's using international law against itself in the creation of a pyramid scheme but then it's currency manipulation as well as LIBOR gouging and price fixing.

 

6.  Thus...................restore Glass Steagal.

Aug 22, 2012 1:05PM
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What is the purpose of a bipartisan commision if both Republicans and Democrats ignore their advice because it is not in their best political interest. The US is running a 1.1 trillion dollar annual deficit and we can't agree to cut spending or raise taxes. Obviously there will be a compromise or bankruptcy will be around the corner. So someone  please tell those idiots in Washington to do what is right for this country now!
Aug 22, 2012 1:04PM
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  Issac has Pat Robetson's number. Smite time. Call it  Fidel /Chavez Voodoo. I mean like what are the odds of it happening naturally? The GOP convention just HAPPENS to be in the pathof a hurricane? Yeah right. They are God Blessed remember? Pat  better do some preempting soon! if it veers away, Think of the praise! might even be called a favorable sign from God for the GOP. Issac relents in the face of Good--- never let a good crisis go  to waste

If not, hopefully Israel will bomb Iran and let  the Rapture begin to kind of make up for the loss to VooDoo
Aug 22, 2012 12:52PM
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The longer the G-20 tries to mask and slowly write down its CDO and Synthetic CDO epidemic, the longer it will take to resolve anyone's currency destabilization. The numbers don't match up and LIBOR was just the tip of the iceberg as far as the corruption, theft, cheating and scheming depths really goes into the economy from within Wallstreet. Macro or Micro Economics indicies are ridiculously off if one looks at the truth--Unemployment in the U.S alone is really at 18-24%, based on those who fell off the cliff, work for cash as indentured slaves or have simply taken on part time and uder-reported jobs. Obama cannot be blamed for anything other than those he chose to surround himself, have elite ideologies and people who look like he does, don't fit into their wine and cheese gatherings in academic circles. Republicans used nepotism, collusion, and social-etitist communism to argue that Obama was a Socialist? What do you call the Republican Party? Who do you think Wall Street is owned by...........................Capitalists? LOL The top 18 Capitalists are engaged in mob-like Communism no different than Russian, Italian, Irish or Chinese mobsters.

The fact is, that so much money is undeclared due to the global mobs that launder their drug, thug and insider trading monies monies through banking and insurance rings linked right to U.S academics institutions where ex-graduates became Neo-Endowers. The corruption inside academics in the U.S and abroad is staggering. The nepotism to create jobs for future graduates is and has become the tail wagging the dogma of higher education--it is not education being learned, but rather, socialism from the nepotistic podium. Collusion amongst Republican Party Governors, Mayors, Congressmen and Senators is and was supposed to be illegal, and punishable by loss of citizenship. Yet both major parties collude off the floors of Congress and states cut deals all the time amongst and especially amongst State Attorney colluders. The States want to act like separate countries in defiance of the 14th Amendment, which would also erase the 13th and 9th Amendments as well which is part of the Republicans Southern answer to Poverty--arrests that leads to huge dollars for private prisons run by evil thugs in Florida who want to pay $.40 cents per-day to inmates to manufacture for companies who currently use them--a guitar manufacturer, a leather retailer in Texas and others........................................ Do your homework media, rather than just selling tv and radio and print ad time or space.

 

Aug 22, 2012 12:51PM
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The G-20 is finished.  Global Markets were fool's gold to beginwith.  It matters NOT whether we have an Obama or a Romney in the White House, because both have elitist mentalities, both have educator freinds in Cambridge and both have mobs they answer to.  The world is too corrupted to fix and it is only going to get much much worse before it gets better.  Stay OUT of church, and worship as Christians were supposed to.................................in small groups amongst themselves.  Islam, Christianity and Judeaism have been hijacked by Vattican insiders--some call them Luminati.  I call them "Thugs" and "Mobsters".  The entirety of faith is at war and science is out of control with technologies released for the get rich seeker's needs over the needs of the people to have access to safe technologies.  In Silicon Valley where "faith" is a data bit.................................the depths of depravity from spying on people inside thier homes to hijacking the flash cards in thier cars, lends to the kind evil the churches and synogogues and temples used to hold at bey.  It is a free for all mentality of exactly what those in technology wanted to see happen............................Anarchy.

 

Obama should have listened to Paul Krugman and Robert Reich years ago and the Republicans should have grown up and found the center through moderates like Chuck Hagel who left politics because of the bat-shoot crazies from within the lunatic fringe.  Americans shouldn't vote for their own demise by confusing Republican gimmickery with Christian rites and rituals taking precedence over the heart for God and the teachings of Jesus.  The truth is.........................all currencies have failed because IRS Tax evasion rules allowed Mit and others to leverage thier own stock options overseas, in which became the Creditors of American Finance through foreign currency manipulations and banking.  The global mess is immense...........................more than 600-Trillion!  It is a house of cards built on leveraged assets that have no real valuation today, other than the same CEOs playing games with thier banks to evaluate those assets fictitionally--there is no real demand to own, therefore, there is no real value except in a virtual reality game of hokus pokus.

Aug 22, 2012 12:49PM
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 When the Ultra capitalists proclaimed the family unit to be of little value to society, it became perfectly acceptable to have mom go into the work force and  make the family unit secondary. More labor supply, less cost for labor! Sweet! Productivity soars. Men were needed for Arms Race jobs at the time. Let's bundle it up with a ribbon and call it woman's lib
Aug 22, 2012 12:41PM
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I'm watching the track of soon-to-be hurricane Isaac with some anticipation and am wondering a few things:

 

1. If it does slam a direct hit into Tampa during the RNC convention, is someone going to get Pat Robertson's (or whoever is God's spokesman these days) opinion vis-a-vis God's judgement?

 

2. Can we get Hannity and Limbaugh a ticket if they won't already be there?

Aug 22, 2012 12:32PM
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 Super anti abortionist really religious Family Guy Ryan  has a rabidly pro abortion atheist who claimed on camera that the family unit was of little value to society, as a hero and yet you call the left loony tunes? 

 Did I mention one of HER heroes was a serial killer , because as SHE herself stated, he had no empathy for others either, just like her. Empathy --a bad bad thing to an Ultra Capitalist.. Leads to expected handouts. Or so SHE says. Gotta be in the DNA
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