Stocks slide on global growth concerns
Dow sheds 125 points to below 13,000. Weak economic data out of Japan, South Korea and Europe put the focus back on international issues. US retailers report generally better-than-expected sales, while jobless claims remain flat.
Updated at 12:29 p.m. ETStocks slumped Thursday as global growth concerns took center stage again. U.S. retail data mostly topped expectations. Jobless claims were little changed, while personal income and spending ticked higher. Mostly, though, investors await Federal Reserve Chairman Ben Bernanke's speech Friday at a symposium at Jackson Hole, Wyo., where he may hint at more easing measures.
The Dow Jones Industrial Average ($INDU) was down 109 points at 12,998. The S&P 500 ($INX) was down 12 points at 1,399. The Nasdaq Composite ($COMPX) was down 33 points at 3,049.
US economic data
First-time jobless claims showed a faltering labor market as more Americans than forecast filed applications for unemployment benefits last week. Jobless claims were little changed at 374,000 in the week ended Aug. 25, well above the 370,000 economists had expected, according to Briefing.com.
More worrisome, the four-week moving average, a less volatile measure, climbed to a six-week high. Last week's figure was revised upward from 372,000 to 374,000.
On the other hand, consumer spending in the U.S. climbed in July for the first time in three months, albeit below expectations. Purchases increased by 0.4% after being little changed in June, the Commerce Department reported. Economists surveyed by Briefing.com had expected a gain of 0.5%. Incomes climbed by 0.3% for a third month.
In addition, inflation remained contained. The core PCE price index rose less than 0.1% in July, and the core PCE also rose less than 0.1%, indicating little inflationary threat in the U.S. economy.
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Global growth concerns deepen
Global growth concerns were largely in focus. Asian shares closed sharply lower on weak data out of Japan and South Korea. Japan's retail activity turned negative in July, falling 0.8% from a year earlier for the first drop since November. In South Korea, confidence among manufacturers stayed near its lowest level since 2009.
Shares in Europe followed Asian markets lower after the European Commission said the eurozone economic sentiment indicator fell to a three-year low in August, well below economists' expectations. In Germany, the number of unemployed workers grew for a fifth month in a row, more than projected, although the unemployment rate remained the same.
With Europe and its debt crisis continuing to dominate the markets, traders also eagerly await the European Central Bank's next Governing Council meeting on Sept. 6. ECB President Mario Draghi, who canceled his attendance at Jackson Hole, is expected to give more details about the ECB's bond-buying plan, aimed to lower borrowing costs for struggling indebted eurozone nations and to help to kick-start growth in the region.
US retail sales
Same-store sales data are expected from several leading retailers, including Macy's (M), Target (TGT) and Kohl's (KSS). So far it seems many retailers have topped expectations, aided by back-to-school sales.
Home-furnishings retailer Pier 1 Imports (PIR) said same-store sales for the fiscal second quarter rose 6.7%, while total sales rose 8.3%.
Costco Wholesale (COST) and Limited Brands (LTD) both beat Wall Street's same-store sales expectations for August.
Stocks to watch
Sears Holdings (SHLD) shares retreated after the retailer got kicked out of the S&P 500 after 55 years. LyondellBasell (LYB) will join the index after the close of trading on Sept. 4.
Shares of Pandora Media (P) jumped after the Internet radio service reported after the close Wednesday a break-even second quarter that topped the 3 cents a share loss analysts had expected. Pandora also provided a stronger-than-expected third-quarter revenue forecast.
Barclays (BCS) named Antony Jenkins as the bank's new CEO Thursday morning. Jenkins currently leads Barclays retail and business banking business.
Citigroup (C) agreed to pay $590 million to settle a shareholder lawsuit accusing it of hiding tens of billions of dollars in toxic mortgage assets. Reuters reports this is one of the largest settlements stemming from the global financial crisis.
Johnson & Johnson's (JNJ) subsidiary Janssen Biotech received an exclusive global license to develop and commercialize a treatment for a form of cancer found in bone marrow from Danish biopharmaceutical company Genmab A/S. The deal could be worth up to $1.1 billion.
Asset manager Carlyle Group (CG) has reached an agreement to buy DuPont's (DD) DuPont Performance Coatings unit for $4.9 billion cash.
>>>All the thumbs down on Earth will NOT change the fact that I HAVE my SS and Medicare, YOU are paying for it and will get NOTHING in return but a voucher! Tough ****ing luck, just cough up my " handouts"<<<
Yep. I think smart money will be buying pet food stocks. Purina is sure to repackage cat-food as "Elder-Chow".
Not an appetizing vision for the country to be regressing to an age of cat-food and coat hangers.
George Washington agreed that the original representation proposed during the Constitutional Convention (one representative for every 40,000) was inadequate and supported an alteration to reduce that number to 30,000. This was the only time that Washington pronounced an opinion on any of the actual issues debated during the entire convention.
Duffy and the Duck,
just wait until you see the debate with For-Biden and Ryan and you will realize who would be the best at becoming president if need be.
That alone speaks volume about a president who only pick jokers and run the show on his own.
What is our national debt today? When was the last budget passed?
Don't you see the Democrats are even afraid of their own numbers....
This country is way worse now than it was 4 years ago...
This is just the Wall Street carpetbaggers telling the FED that they want the QE2 now. Stocks drop before his speech, he relents and says there will be another round of stimulus, the FED prints more money, buys more Treasury bonds and all the wankers on wall street get to go home FAT, DUMB and HAPPY for the Labor Day weekend.
The rich get richer and the rest of us get to pound sand.
>>>Fact is ,when Regan reduced the capital gains taxes, treasury saw an increse in revenue due to increased investment activity.<<<
Yes, it did... but only in the short term. And the increase was not enough to cover the deficit that it created.
As far as inheritance tax, why shouldn't those sums be considered income? What did the heir do to earn that money/property? I'm sure that if I were bequeethed a viable asset, "buying" it for half of what it's worth seems like a sound business propostion.
Swagfan wrote,
"Help me out here. How will increasing income taxes on high earners, and reinstating the old inheritance tax rates (1 million exempt, over that 55% tax) on heirs of small business owners, leading to the sale of many small firms, lead to economic growth and get the economy moving forward? Anybody?"
The question so far is unanswered by anyone that can provide factual data to support such a policy.
Fact is ,when Regan reduced the capital gains taxes, treasury saw an increse in revenue due to increased investment activity. When Jimmy Carter left office our economy was in worse shape and interest rates in the double digits.
Increasing the inheritance tax will put many viable businesses out of business. Example; a family owned dairy farm that has been around for 40 years that was providing 50 or 60 full time jobs suddenly has to close down and liquidate. You see the man who built the farm up to a 4 million dollar operation that makes less than $100k a year profit suddenly died of a heart attack and his children don't have 2 million laying around to pay the tax man. Jr. has been working the farm with his dad all along and now he and the other workers are out of work.Jr. hopes the auction goes well enough so he can pay the tax bill and find a job when other farms are closing down.
The problem with our system is politics and politcans and the parties that play politics and
pick the politicans that we get to vote for.
From the time a party picks a person to run for office and they leave office they are controlled by
the party and the money they raise to get them elected and keep them elected. The more times
the are relected the worse it getrs.
We need term limits and a line item veto before any progress can be made with solving our
social and economic woes.
When are people going to wake up? Before the crash in 2008, the Dow was at about 14,000......and now we
are over 13,000.......so they are saying the economy is almost as good as it was before the crash? This
is all artificial , our spending is out of control, congress will only act on something if there is money to be
made under the table for them. Get out of the stock market while you still can and put your money in gold or
silver...........if you don't then in 6 months you will wish you did. FDIC is about broke, so if you think your going
to get dollar for dollar for any monies lost if your bank fails..........wishful thinking. ITs time Americans stand
together and take back America from the greedy politicians and also its time we get out of NAFTA and bring
our jobs back home. Do not vote for one politician running for re-election, we need new leadership and
FAST!!!!!!!!!!
over and see how much worse they can make things. <<<
Whoever gets elected POTUS in the fall will claim that their "leadership" sucessfully "turned the economy around" in the years to follow. The fact is that the economy will turn itself around as this is the nature of business cycles in capitalist systems. It's also the nature of politics to make claim about things for which they had little do.
Romney claims that he was a sucess as a governor. But look at the period when he was governor: 2002-2006, when the economy in general was being fueled by an artificial bubble in realestate. He happened to be in the right place at the right time, nothing more, and got out before before everything went south.
Likewise, Obama happened to be in the wrong place at the wrong time. I doubt that any president could have dealt with the downturn with any more success. Capitalist economies can be a stubborn thing sometimes.
"Unemployment has doubled since Obama been on the Capitol Hill. There are so many people unable to file a claim because they have not worked long enough to re-file."
Obama? Career politicians in Congress were on the job during the good times, gave themselves raises and were there during Dubya's terms as big business terminated 40 million careers while giving themselves raises. Since the President took Office, career politicians in Congress formed the Party of NO with both Republican and Tea Party members and have blocked EVERY piece of legislation written to help America and Americans. Rant your asss off but America knows that the GOP has to get voted OUT this Fall and not to compromise that with a GOP puppet in the White House.
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