MARKEts
Dow down triple digits, the good times are over
Wall Street Journal Nov 26, 08 8:58 AM CST
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Wall Street’s three-day revival screeched to a halt this morning, as the Dow opened down 136 points following a grim consumer spending report. Personal consumption fell 1% in October, the fastest consumers have slammed the brakes on spending in 7 years, the Wall Street Journal reports. Orders for durable goods took their third straight tumble, falling 6.2%.
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OPINION
"Wealth effect" is playing out in reverse
Washington Post Nov 25, 08 10:09 AM CST
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Three factors are playing into the financial crisis, and it's time to recognize the culprit that accompanies the burst housing bubble and banking meltdown, Robert J. Samuelson writes in the Washington Post . The wealth effect—"the tendency of people to adjust their spending as their wealth changes"—is reversing, with Americans scrambling to save in the face of falling stock prices and home values. The consequences could be dire.
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But cash isn't king for retailers, who'll likely see bigger drop in sales
Associated Press Nov 24, 08 2:15 AM CST
(Newser)
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Americans are reverting to cash for purchases in increasing numbers, according to top retailers Wal-Mart, Target and JC Penney. The shift away from credit is expected to further reduce spending by consumers—who will be limited to cash-on-hand purchases—not just during the holiday season, but during what could be a deep and long-lasting recession.
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ANALYSIS
Worried Americans scaling back spending, saving more—bad news for retailers
New York Times Nov 12, 08 10:16 AM CST
(Newser)
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The US consumer has “gone from being the world economy’s greatest strength to its Achilles’ heel,” writes David Leonhardt in the New York Times . Just as Wall Street’s turmoil begins to calm, consumer spending—an economic mainstay—has gone into hiding, helping to accelerate General Motors’ tailspin and sending messages to retailers like newly bankrupt Circuit City that times are changing.
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Credit card company is reeling as consumers cut back spending
Wall Street Journal Nov 12, 08 7:10 AM CST
(Newser)
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Falling consumer spending and rising defaults have prompted American Express—which has seen its stock plunge 57% this year—to ask for $3.5 billion from the government’s $700 billion bailout fund, reports the Wall Street Journal. The company Monday received Federal Reserve approval to become a bank holding company, giving it access to the Troubled Asset Relief Program.
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Twin concerns drive new consumer psyche
Wall Street Journal Nov 4, 08 10:43 AM CST
(Newser)
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Affluent Americans are folding up the Gucci sunglasses and trying green living's thriftier practices on for size, a response to environmental and economic concerns that's sure to dampen spending for the duration of the recession, the Wall Street Journal reports. "People aren't shopping to feel better," said one retail consultant. "They actually are not shopping to feel better."
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MARKETS
MarketWatch Oct 31, 08 3:39 PM CDT
(Newser)
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Stocks rallied today despite a slew of poor economic reports as investors instead focused on falling rates in the credit markets, MarketWatch reports. Though the Dow was up 11.3% for the week, October ended as the worst month since 1987. The Dow rose 144.32 to close at 9,325.01, the Nasdaq climbed 22.43 to 1,720.95, and the S&P gained 14.66 to 968.75.
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Weary from a long fight, consumers are retrenching, cutting purchases across the board
Bloomberg Oct 31, 08 9:24 AM CDT
(Newser)
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The punches are coming from all directions and consumers, beaten down and out of breath, are clearly ceding the fight through decreased spending, Bloomberg reports. The scorecard released today says it all: consumer purchases were down 0.3% in September, the biggest drop in 4 years, capping the weakest quarter in 30 years. Inflation is also cooling, today's report found, giving the Fed, which warned this week of further “downside risks,” more room to maneuver.
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MARKET opener
Scary Halloween ahead for Wall Street?
Wall Street Journal Oct 31, 08 8:51 AM CDT
(Newser)
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Stocks took a small slide this morning, as spooked investors bid farewell to one of the worst months in market history. The Dow fell 21 points, while the S&P and Nasdaq were off 0.3% and 0.9% respectively, the Wall Street Journal reports. Among the scary news was a predictably grisly consumer spending report, which took its biggest hit in four years, and a slashed outlook from Electronic Arts.
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Economists fear prolonged recession inevitable as numbers erode
Bloomberg Oct 30, 08 8:28 AM CDT
(Newser)
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The US economy shrank less than expected in the third quarter but still suffered the biggest contraction since the 2001 recession, reports Bloomberg. The gross domestic product fell 0.3%, led by the first fall off of consumer spending in two decades. The figure, out from the Commerce Department this morning, beat the forecast 0.5% annual rate but nevertheless rang alarm bells among economists who warned a prolonged recession is likely.
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OPINION
London's mayor has some advice for the queen: Buy a dress
Daily Telegraph (UK) Oct 28, 08 12:33 PM CDT
(Newser)
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If you’re fretting, panicking, or just plain moping about the economy, Boris Johnson has some advice: Wake up and go shopping. “This isn’t some disaster movie about a virus from Mars. It’s a recession,” the mayor of London writes in the Daily Telegraph . “It doesn’t mean we have to line our rooms with newspaper, get in the fetal position, and live on tins.”
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Luxury execs are sitting tight for the most part, while jet set wonders what's appropriate
Wall Street Journal Oct 9, 08 7:04 PM CDT
(Newser)
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Not even the super-rich are immune to the present crisis, prompting Christina Binkley to wonder in the Wall Street Journal : "Is this the end of bling?" In a word, maybe. The world, of course, will always have rich people, but they may not want to flaunt it as much amid all this "anti-wealth sentiment."
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71% miss projections, worst showing since September of 2000
MarketWatch Oct 9, 08 4:42 PM CDT
(Newser)
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With the holiday season looming, retailers' only hope may be a genuine Christmas miracle. In reports on last month's business, 71% of retailers missed sales and profits estimates, making it the worst September since data collection began in 2000, MarketWatch reports. Experts widely attributed the dismal numbers to the struggling economy and a dearth of credit, while some stores blamed disastrous weather for low traffic. Only value and off-label stores beat expectations.
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