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 9:59AM
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The national debt is on pace to top $16 trillion by the end of next week.  This comes out to about $51,000 of debt for each and every citizen.  But even more disturbing, the portion of debt that belongs to each citizen who actually pays income taxes is about $140,000.

"It's a spending problem, stupid."

Aug 30, 2012 9:54AM
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interesting trouble when a paper like the Los Angeles Times writes an article about just how bad off we are with the public employee pension liabilities.

 

today they said the liability to every household in california for the pension shortfalls (what their pension "makes" in investments vs what the GUARANTEED PAYOUT covered by the state tax payer for the retired public employee) is $23,000 each. 

 

this is just a snapshot of what the other states are seeing.  our magnetude is higher by our size.  but since pension contracts get coppied from state to state, expect your own to also start seeing these huge liabilities. 

 

 

Aug 30, 2012 10:06AM
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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?
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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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 11:13AM
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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!!!!!!!!!!

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And so it begins.

 

Bernanke can not print anymore monies the Federal Reserve has realized that their policy of protecting the super rich by pumping money into equities is the wrong approach to getting us out of this depression.

 

We are still in a Death Spiral of Lost Jobs and an ever weaker and weaker economy.

 

The Federal Reserve is fast upon the brink of tipping us into a hyper inflation mode. In fact I do nto think they can avoid it as they are not smart enough.

 

The problem is the BRICS are moving away from the dollar as a trading vechicle and they are learning that their standard of living is improving much faster and easier without trying to sell things at bargain prices to the US.  Pretty much they do not need us anymore and never really did.

 

Our dollar is going to be worthless in a couple of years as the BRICS become stronger and stronger.

 

What can the Federal Reserve do about this?? Printing even more fake monies to buy US T-bills will not solve the problem only make it worse. Increasing the interest rates will just accelerate inflation not that it will not happen on it's own as the BRICS realize that they are now in charge of the world economy not the USA, Japan and Europe all of whom have collasping economies.

 

So the Federal Reserve is stuck none of their tricks and tools will work. Print more monies and we die a fast death of inflation with no growth. Drop interest rates well we are already at zero so there is no more room there. Increase interest rates they tried that in 2008 to push it up to 5 percent and helped turn the recession into a depression.

 

The Federal Reserve has two things it can do that will save the US and neither course will they take.

 

First is to print a couple of trillion dollars and build manufacting plants for things Americans need and put 40,000,000 American back to work and force the government to boot the illegal aliens who are just a drain on our economy (who do you think makes up the bulk of the welfare people in the US???).

 

Second is much worse have the US tax the super rich to pay off the deficit of $16 trillion that would be easy as the super rich own about $95 trillion and losing $16 trillion would put them at $79 trillion but the increase in the value of the dollar as we solved our debt problem would increase the value of the dollar by about 1.5 times making their wealth increase to $118 trillion.

 

That is a much better solution for the super rich as otherwise they will see their wealth decrease to about $7 trillion dollars as the dollar collapses in couple of years.

 

We have either total idoits running this country or they are all commist agents.

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 10:05AM
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Right on schedule - they will run the market down in the hopes that it will force the Fed to kiss their a$$e$ tomorrow. When they finally figure out that the Fed doesn't give a $h!t, they will forget about the free money and go to work screwing the people with deception and fraud again. They will win no matter what because it is all about corporate and US government legalized racketeering..
Aug 30, 2012 10:35AM
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Previous week's first time unemployment claims were revised upward by 2,000 to 374,000.  This past week was also 374,000.  This is like 50 plus weeks in a row the #'s have been revised UPWARD.  And - the 4 week moving average is now 374,000, a NEW SIX WEEK HIGH.

 

Consumer spending up for the first time in 3 months in July.  HELLO- school starts the end of July in most places now and many states had sales tax holidays in July.  When I was in school it started after Labor Day.  Anyone remember the song "See You In September".  How much did credit card balances increase for July?  That would be telling.

 

As to PENSION PLANS whether small company, large company, government employees or Social Secuirty.  The real problem has been that this LIABILITY has been carried as "AN OFF BALANCE SHEET LIABILITY" like it really did not exist.  Additionally, most plans have used an unrealistic annual rate of return of 7% and continue to do this.

 

IF IT IS A LIABILITY TO A COMPANY OR THE GOVERNMENT, THEN IT SHOULD BE ACCOUNTED FOR AS A REAL LIABILITY.  Social Security would be fine if our legislators had not raided the funds in it, and used it balance the budget.  The government gave it  WORTHLESS IOU'S.  The big problem now is all of the people getting disability payments from SS.  I am sure some claims are legitimate, but the # of people receiving disability  have spiked under President Obama for some reason-

 

I am sure it has nothing to do with thinking these people will vote for him?

 

No inflation?  Have these people been to the grocery store, or purchased gas at $3.70 a gallon.

 

Oh! and where is the outcry for the noshow President Obama in New Orleans-or the news outlet (PMS)NBC interviewing those people who were abandoned and left at their homes.  Again, no personal responsibility by some of these people to leave.  My biggest problem is - why do my tax dollars have to go to rebuild BELOW SEA LEVEL.  I will never understand this one.  And no I am not duimb - but I do have common sense.

Aug 30, 2012 10:53AM
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Kinda fitting that Ben is in a place with "Hole" in the name while he ponders how much bigger he'll make the hole....
Aug 30, 2012 10:46AM
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floating said,

 

We need a true American political party.

 

I agree except take out the word political.  The use of that word  in any context of what

his country needs to govern itself is exactly what is causing the system to fail.

Aug 30, 2012 9:37AM
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Greed is Good=High Frequency Trading=Money never Sleeps=The(TBTF) Criminal Banking Cartel !
Aug 30, 2012 10:20AM
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It's time for a prominent 3rd party who has Americans in their best interests. It's time to change the election process and reform the Electoral College so a 3rd party could win.

Most of the GOP has gone so far off to the right that many traditional Republicans don't recognize this as their party anymore.

Most of the Democrats have become like corrupt Republicans, and both parties are in the pockets of lobbyists, and have been bought and sold by mega corporations and the financial industry.

We need a true American political party. Look around the world and see which countries have developed the best and most stable economies for their majority of people and their governments to get some clues. Not Russia or China.

Aug 30, 2012 10:43AM
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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. There are people not looking for work cause there

is none in their area. Many people are working temporary and part-time jobs or side jobs

that they are unable to qualify for unemployment.

 Politicians, State Officials, Dept. of Labor and the Media post false numbers all the time.

They lie to the public all the time. Stop WALL STREET from dictating how businesses should run.

Wall Street goes down, people lose their jobs. Wall Street goes up, the Wealthy takes your money

and don't re-hire those they let go. Wall Street goes down, you lose your retirement fund and the large stock holders, Insurance companies, etc. are happy. Wall Street goes up the Wealthy are extremely happy but you have yet to recover from your Losses or to have a job.

 

rid of OBAMA DRAMA and his Hoodlums (Evil Doers).

 

Vote for the lesser of 2 Evils.

VOTE for Mitt ROMNEY.

Aug 30, 2012 12:00PM
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So many posters SEEM to know all about how much better for this country one Party and one PotUS is than the other, but CAN NOT see that the whole show is now Corrupt? Until the majority of citizens figure out that they are rallying behind a bunch of crooks, this fiasco will start over in a couple months with the "Just wait for 2016" battle cry, and same meaningless rabble-rousing... 
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Yep keeping interest rates at zero is really going to get our economy off the ground. Look at Japan they still have deflation, they rise taxes all the time , they even charge a tax on people buying prescription drugs over there.

 

Pretty much they are doomed and their debt is scheduled to hit three times GDP in the next couple of years.

 

Yep keep doing everything but the only thing that will get us out of this depression.

 

WAKE UP FEDERAL RESERVE YOU NEED TO BUILD MANUFACTURING PLANTS AND PUT 40,000,000 AMERICANS BACK TO WORK and kick the illegal aliens draining our tax dollars in the form of welfare (they make up most of the people on welfare now) to the curb and deport them.

 

If the illegal aliens want a better life have them kick the drug lords out of Mexico and their corrupt leaders and build manufacturing plants and make things to make their lives better.

 

Gee people it does not take a genius to figure out Marx was right. The labor of the people is the only true source of wealth.

 

Gold stays in the ground doing nothing until people dig it out and others refine it and still others make pretty useless things out of it which the super rich sell and buy to each other for tens of billions of dollars a year.

 

Gee why don't we build manufacturing plants for hiring people instead and build stuff that is useful.

 

We are going to heck in a hand basket because our leaders are

 

a) stupid

b) corrupt

c) stealing the money

d) commies bent on the total destruction of the US

e) all of the above

 

WE NEED JOBS STUPID

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Lets see how big of a tantrum that wall street can throw waiting with their hands on their hips for their next installment of taxpayer handouts!

"See mama ben, see how unstable we are, and mommy, we understand that only you know how to fix the problem, just like you did the last 10 times"!

Aug 30, 2012 12:12PM
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Washington Post: Consumer confidence the lowest it's been in 10 months. Folks say they are pessimistic about employment opportunities and the economy. Economy is tanking .... unemployment is 8.3%, the deficit, inflation .... ect, etc.

So who still thinks Obama will win this election!!

 

Get a grip!  R+R in 2012 .. in a landslide!

Aug 30, 2012 11:59AM
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The bottom line is this country's growth is fuel by business and consumers....businesses expanding and hiring and those consumers spending money.  That is the United States!  So, busineeses are extermely cautious because of the WH agenda of raising their costs through taxes, regulations and health care costs....so they are doing what I am doing...just what I have tot do to maintain!  Why would I go spend a bunch of company money to expand in uncertainty!  Answer is I wouldn't and I won't.  So until business feels like they know/expect what there costs are going to be next year the year after that and the year after that ...nothing is going to happen to expand businesses to the level needed to drop unemployment.   It aint rocket science people.  And the other thing is that out of control government spending is ruining this country.  It sure is easy to spend more than you make and you don't care!  It's just unbeleivable
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