Stocks slide on fears of a global slowdown

A new report shows weakness in Chinese trade. US import prices fall unexpectedly. JCPenney reports disappointing earnings. RIM may have found a buyer for part of its business.

By Melly Alazraki Aug 10, 2012 9:07AM

Updated at 12:00 p.m. ET


Stocks declined Friday, yet trimmed losses midday, as worse-than-expected Chinese export data added to fears that the global economy is slowing.

 

The Dow Jones Industrial Average ($INDU) was down 14 points at 13,151. The S&P 500 ($INX) was down 2 points at 1,401. The Nasdaq Composite ($COMPX) was down 6 points at 3,012.


New data indicate that growth is slowing in China, affected by the debt crisis in Europe and the anemic growth in the U.S., as well as by domestic weakness. Investors still hope Beijing will soon step up its stimulus efforts, as the world relies on the country to help pull global growth out of its slump.

 

The report shows that the growth in overseas shipments from China ground to a near halt in July, with exports up just 1% from the same month a year earlier, far below expectations and well beneath the 11.3% in June. Import data were also disappointing, with an increase of just 4.7%, compared with 6.3% in June. Economists had expected growth of 8% and 7%, respectively. Another report showed much lower-than-expected local-currency lending.

 

European stocks were trading lower, and Asian markets finished Friday in the red. Commodities, oil and gold all fell on fears of slowing global demand. Corn prices, on the other hand, hit another record high.

U.S. import prices also fell unexpectedly by 0.6% in July. That compared with a revised 2.4% drop in June, mainly because of declining oil prices. Oil prices also fell in July, though at a much slower rate. Economists surveyed by MarketWatch had expected import prices to be unchanged. Export prices rose 0.5% in July after a 1.7% decline in the prior month.

 

An update on the U.S federal budget will be released at 2 p.m. ET. The report will give a snapshot of the nation's finances. Economists surveyed by Briefing.com expect it to show a deficit of $71 billion in July, higher than the $60 billion deficit in June.


Facebook (FB) is to obtain consent before sharing consumer information, FTC said as it approved the social network's privacy settings, Reuters reports.


Manchester United (MANU), the British soccer club, started trading Friday after raising $233.3 million in its U.S. initial public offering, pricing the shares below the marketed range. Shares remained relatively flat in their debut on the New York Stock Exchange.

 

J.C. Penney (JCP) posted a net loss of $147 million, or 67 cents a share, as sales decreased 23% to $3.02 billion. Excluding items, the adjusted loss was 37 cents. Analysts had projected a per-share loss of 25 cents on revenue of $3.2 billion. 


The Justice Department said Thursday that it won't bring charges against Golman Sachs (GS) or any of its employees for financial fraud related to the mortgage crisis, The Wall Street Journal reported.


Yahoo (YHOO) shares fell as a regulatory filing showed new CEO Marissa Mayer has embarked on a strategy review that's rethinking a plan to return to shareholders the cash generated from a deal to sell its stake in Chinese internet company Alibaba. The stock has now been downgraded to "neutral" from "buy" at Bank of America/Merrill Lynch.


  • More analyst calls here.

 

Research In Motion (RIMM) shares climbed after Bloomberg reported that, according to two sources, the company's enterprise-services unit has attracted interest from IBM (IBM). No party has shown interest in buying all of RIM or the division that makes its phones, and no talks are under way, one source said.

 

Monster Beverage (MNST), the largest U.S. energy drink maker by volume sales, disclosed in a regulatory filing that an attorney general is investigating its Monster Energy drinks and ingredients, as well as advertising and marketing. The investigation is in an early stage.

 

Nvidia (NVDA) reported third-quarter earnings and sales that exceeded analysts' estimates on robust demand for processors used in tablet devices coming to market in the current quarter.

 

Fusion-io Inc (FIO) late Thursday reported strong fiscal fourth quarter results that handily beat profit estimates. It also projected strong growth over the next year.

102Comments
Aug 10, 2012 10:10AM
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The problem is so huge, complicated, and intertwined that a few simple political one liners can’t even come close to the true problem. The rich, the entitlements, government bureaucracy and regulations, taxes, immigration, subsidies, military spending, banks, Federal Reserve, jobs, our evolved political system, and on and on and on. It is the entire system, all of it that has become corrupted and broken. We need an Etch-E-Sketch moment back to the Constitution. We need leaders that are focused on providing the leadership and stewardship needed to ensure the survival of our nation, not political pundits following their party line or platform, not focused on buying votes and taking care of their own political aspirations, and not focused on building and taking care of their personal family dynasties. President Obama has proven he is not the one, and it is obvious Mr. Romney isn’t the one either, and both the republican and democratic parties have made it abundantly clear they are a large part of the problem not the solution. The American people need to wake up.    

Aug 10, 2012 10:28AM
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Another day of alot of negative news from around the world and yet the market is only down 20 points or so.  However..even at the slightest amount of positive news and the market "soars" over 200 points.  That's why this market is nothing more than a manipulated farce.  
Aug 10, 2012 10:20AM
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year after year our choices are so far below what we think our nation should be capable of elevating to "president" stature. 

 

>>>>President Obama has proven he is not the one, and it is obvious Mr. Romney isn’t the one either, and both the republican and democratic parties have made it abundantly clear they are a large part of the problem not the solution.<<<<

Aug 10, 2012 10:11AM
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If the stock market had any direct corelation with reallity it would be much lower.  These so called stimulis programs do nothing to help regular people who have taken the entire impact of this recession/depression.  Rates are at historic lows and have been for years now, what affect will more easing do, lower them 2 tenths of point more?  Until governments get their heads out of special interests asses we will have nothing of substance in the form of government help.  Helping regular people doesn't get them campain contributions or bribes so I guess were all f'd.

Aug 10, 2012 9:31AM
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nice topic to wake up to:  USA worried about the banks collapsing.  no doubt the FDIC could never step in and cover the losses from these idiots gambling debts. 

 

>>>>U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.<<<<<<

Aug 10, 2012 10:24AM
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The american people are screwing themselves, with help from the government. No one is forcing anyone to buy chinese. And I bet that even if stocks go down today, they stay above 13K!  Uncle Sam is a manipulator.
Aug 10, 2012 9:41AM
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There evidently isn't any economic systems left except "StImulism".  WOW, the whole world is in trouble!!!
Aug 10, 2012 9:45AM
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Let's get the story right. Stocks slide on Obama policies. SPEND SPEND SPEND. More than 1/3 of this nation on some kind of welfare not counting SS or Medicaid. Our president has let us down. The clueless will still vote for him. What a shame. Wake up and vote Obama out in November. By the way the debt clock approaching 16 trillion.
Aug 10, 2012 10:55AM
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For what good it does to comment, it seems that the most recent (and unwritten but embraced by the majority of Americans) Constitutional Amendment reads like the 7 deadly sins:
"Wrath, Greed, Sloth, Pride, Lust, Envy & Gluttony."

This apple we call America is bad to the core; the competent are deemed incompetent, the rich are treated as (false) idols, and logic & intelligence do not hold a candle to fame and fortune. In a few hours, the posters here who have shown signs of a grip on the situation will be steamrolled by the bitter partisan politico bickering, and mostly disregarded by the overwhelming affront of the Trolls.





Aug 10, 2012 9:37AM
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more wonderful news about these clowns: 

 

>>>>WASHINGTON -- The Justice Department says after a "careful review" it has determined there is no basis for bringing a criminal prosecution against Goldman Sachs or its employees in regard to allegations set forth in a congressional report.<<<<<

Aug 10, 2012 11:32AM
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" The Justice Department said Thursday that it won't bring charges against Golman Sachs."

1) Big Donors?
or
2) Justice is swapped going after states.
or
3) All of the above. 

Aug 10, 2012 10:10AM
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It is all coming home to roost with the "roosters".  If our nation was not on the "dole" and it is much worse than most think.  Where I live it is well over 50% not including medicare and medicaid.  The actual unemployment rate is well over 20% nationally.  California is sinking into the ocean and it is no earthquake.  We asked for this with the braindead idiot in office and the ideologues which will not admit because their denial is that present. And, most of them are on the "dole", also.  The topics and the "switches" day to day are that obvious with the phony "pundits"....who are on the "dole, also.  This is not going to change in the foreseeable future.  
Aug 10, 2012 10:00AM
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I guess the 'cats out of the bag' now (not talking about Fat Cat either) concerning US Banks taking responsibility for their own actions- not relying on the government to bail them out. A article by Rick Rothacker of Reuters that's out today has said what many of us have known for a while now, that banks must develop their own plans to advert a collapse if they faced serious problems during a financial crisis. Everything from 'living wills' for worst cases, aimed at the TBTF showing how they would liquidate themselves without imperiling the financial system to resolution plans/recovery plans to protect the system, tax payers, & creditors.

 

Keep the government out of it and the government now says: "don't assume support from the public sector".

 

Finally, they're making the heads of Banking institutions take responsibility for their own actions.

Aug 10, 2012 9:26AM
Aug 10, 2012 11:01AM
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I always try to find "Made in the USA". It's almost impossible to do anymore.

Aug 10, 2012 11:54AM
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This government reminds me of the time I gave my credit card to my oldest daughter. Except my card had a limit.


Aug 10, 2012 10:18AM
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I guess Europe is now ok so let's use China again? Spin. pump and dump this is the stock market dance!!! Again the bankers need to pay for their weekend in the Hamptons or possbly Rio!!!!
Aug 10, 2012 10:48AM
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i wonder how many times McCain has kicked himself for picking Palin as a running mate? 

 

>>>>>The only reason that Romney got the nomination was that he kept his mouth shut during the primaries and let the others open theirs and "remove all doubt".  Now, of course, he has to open his.  2016 will see some better candidates on both sides.  <<<<<

Aug 10, 2012 11:09AM
avatar

...This apple we call America is bad to the core; the competent are deemed incompetent, the rich are treated as (false) idols, and logic & intelligence do not hold a candle to fame and fortune. In a few hours, the posters here who have shown signs of a grip on the situation will be steamrolled by the bitter partisan politico bickering, and mostly disregarded by the overwhelming affront of the Trolls.

 

They are gathering momentum even as I type...Red vs Blue; no white, no logic, no clue. Their guy is better than the other guy...

Aug 10, 2012 10:42AM
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Well, we finally see the #1 reason why Wall Street and every other market makes out so well from day to day.  The word is FEAR!  Fear about this, fear about that, fear from this report and that report!  No real examination of what the report is about but it sure does generate sales!!!  Today is Friday and will be a down day due to profit taking. But they never use that as a reason, because we can put the blame on FEAR of a global slowdown!!!!
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