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.

By Melly Alazraki Aug 30, 2012 9:25AM
stock marketUpdated at 12:29 p.m. ET

Stocks 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.

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.

198Comments
Aug 30, 2012 11:44AM
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>>>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. 

Aug 30, 2012 11:40AM
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Quick, roll out the "Recovery Summer" slogan. Yeah, that's the ticket............
Aug 30, 2012 11:40AM
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I am thoroughly convinced a lot of people are brain washed into being government enablers. It seems they want to provide more tax money to the bureaucrats so they can continue to spend more than they take in. Condoning any tax increases is like giving a junkie more drugs. We need to say enough is enough and force them off the spending spree. The government is taking money from us that could be providing employment and growth.
Aug 30, 2012 11:35AM
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Our Country has the best system of government but it has been compromised we have grown rapidly in population yet our representation in Washington has not adjusted to this extreme increase since the year 1913 when the majority republican house, senate and president made an amendment to the constitution putting a cap on the number of representatives allowed in congress, the reason had merit at the time 100 years ago it seamed that to many representative would be counter productive and in hindsight it also seams to few has the same outcome. the population in 1913 was 97 million with 435 representatives now the population is 300 million with 435 rep.s. THIS IS UNCONSTITUTIONAL! ITS TIME FOR CONGRESS TO RE-EVALUATE THIS 100 YEAR OLD AMENDMENT "THIS YEAR". Maybe base it on the ratio of 1913 that would be 1340 representatives.                                                                      The "ideal" number of members has been a contentious issue since the country's founding.
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.
Aug 30, 2012 11:33AM
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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"
Aug 30, 2012 11:31AM
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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...

Aug 30, 2012 11:30AM
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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.

Aug 30, 2012 11:30AM
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>>>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.

Aug 30, 2012 11:29AM
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Biggest lie of all time? Those decrying that Damned Socialist Roosevelt saying they want to SAVE Medicare and SS
Aug 30, 2012 11:22AM
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 Mitt and Ryan will raise a family's income tax by $2000 a year, senior health care costs by $6000 a year according to INDEPENDENT studies. AND they want to lower the Fat Cat income tax rate to 1%.And you Buy into that???  Dumb as a rock if you do. Like I said, i got mine so who really CARES what happens to you. You want what I got, YOU fight for it
Aug 30, 2012 11:21AM
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Top Scott is sitting at His computer wearing nothing but fish net stockings, a fish net tank top and a pointy white hood, wondering what happened to His America :- )
Aug 30, 2012 11:18AM
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So, V_L,you're saying no matter what B.B. and the Fed boys do we're screwed.I like the way you think - reality.So,why not be calm anyway,there's nothing I,you or we can do about it.The rich are gonna do what ever it takes to stay rich and we get to pay for it,yaaaayyyy !! Oh,BTW, it's already POOFed back up,told you.
Aug 30, 2012 11:16AM
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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.

Aug 30, 2012 11:16AM
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The ONLY uncertainty on this planet is Obama

The ONLY certainty is that he is about to find a real job...

 

He will have to go to a different school than the teleprompter school and learn to think before he speaks unlike Pelosi and Reid who speak and then they think...oups...

Aug 30, 2012 11:16AM
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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.

Aug 30, 2012 11:16AM
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You know, it makes NO DIFFERENCE to me who wins the election. Why? Because I am 65  nd I HAVE my SS and medicare to which there will be NO CHANGES according to your God Ryan himself. So if YOU want what I have, under 55ers, FIGHT for it  because I give up on your ignornace of the fact that the GOP wants to get rid of entitlements, not save them along with the capital gains tax because the rich just ain't rich enough Enjoy being ruled by the oh so benevolent Ultra Capitalists, kids! 

Aug 30, 2012 11:13AM
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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!!!!!!!!!!

Aug 30, 2012 11:12AM
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>>>I am beginning to wonder why Obama would want to be reelected.  Let the repubs take

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.

 

 

 

 

Aug 30, 2012 11:09AM
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"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.

Aug 30, 2012 11:00AM
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STOCKS FALL.......??? Where do they fall............in ObamaCare???

YOU have zero credibility. Who are you a kid living in your mom's house? Everyone who actually pays for health insurance is on-board with the Healthcare Act because we get more for a lower cost WE shop for.
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