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Archive for July, 2009

Have You Gotten A Raw Deal From A Credit Card Company????

Friday, July 31st, 2009

If so, post it here, along with your name and hometown. I am preparing a consumer piece on the impact of new rules for credit card companies.

Rachel Pritchett, business reporter


Friday Dow Rises On GDP News

Friday, July 31st, 2009

Now at 9,185, up 30 points.

NEW YORK (AP) — Traders aren’t making big moves on the final day of a huge month for the stock market.
Investors reacted coolly to a report that the nation’s economy shrank at a slower pace than expected in the April-June quarter. Most stocks rose but major indexes seesawed in a tight range.
The nation’s gross domestic product, a measure of the economy’s total output, slowed at a rate of 1 percent during the quarter. That was better than the 1.5 percent drop expected by analysts. But the report also found that consumers cut spending in the second quarter, a troubling sign because their outlays account for more than two-thirds of all U.S. economic activity.
Investors have been placing big bets this month that the longest recession since World War II is finally beginning to recede. The Dow began Friday with a gain of 8.4 percent for the month, its strongest July since 1989, when it gained 9 percent. The blue chips are on track to post the best performance of any month since October 2002.
Alan Lancz, money manager at Alan B. Lancz & Associates, said the GDP report signaled the economy was improving, but he worries that investors are getting ahead of themselves and buying stocks as if the economy will rebound quickly off the bottom.
“The good news is it’s heading in the right direction and the bad news is the higher the market moves the more it’s discounting a V-shaped recovery,” he said.
In early afternoon trading, the Dow rose 11.86, or 0.1 percent, to 9,166.32. The Standard & Poor’s 500 index rose 0.65, or 0.1 percent, to 987.40, while the Nasdaq composite rose 2.56, or 0.1 percent, to 1,986.86.
The GDP report is the strongest sign yet that the recession is winding down. However, the Commerce Department revised the first-quarter GDP figure much lower, saying economic activity tumbled 6.4 percent. That is the worst quarterly reading in nearly 30 years.
The latest report also said consumers cut spending by 1.2 percent in the second quarter, after a 0.6 percent increase in the first quarter.
Investors have been looking to consumers to help lead the economy out of a recession. Spending has been cut as consumers continue to worry about jobs. The unemployment rate is expected to move higher after hitting a 26-year high of 9.5 percent in June.
“We’re still not in very good shape in the employment part,” said Steven Stahler, president of the Stahler Group in Baton Rouge, La., adding he doesn’t expect to see consumers leading the country of out recession soon.
In corporate news, Walt Disney Co. fell 98 cents, or 3.7 percent, to $25.24 after reporting a 26 percent drop in fiscal third-quarter profits on slower DVD sales while revenue fell by 7 percent.
In other trading, bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.52 percent from 3.61 percent late Thursday.
Light, sweet crude rose $1.11 to $68.05 a barrel on the New York Mercantile Exchange.
The dollar fell, and gold prices rose.
About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 506.4 million shares compared with 680.7 million shares traded at the same point Thursday.
The Russell 2000 index of smaller companies rose 1.45, or 0.3 percent, to 559.25.
Overseas, Japan’s Nikkei stock average rose 1.9 percent. In afternoon trading, Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index declined 0.6 percent, and France’s CAC-40 declined 0.5 percent.


GNP Dip Smaller Than Expected

Friday, July 31st, 2009

WASHINGTON (AP) — The economy sank at a pace of just 1 percent in the second quarter of the year, a new government report shows. It was a better-than-expected showing that provided the strongest signal yet that the longest recession since World War II is finally winding down.
The dip in gross domestic product for the April-to-June period, reported by the Commerce Department on Friday, comes after the economy was in a free fall, tumbling at an annual rate of 6.4 percent in the first three months of this year. That was the sharpest downhill slide in nearly three decades.
The economy has now contracted for a record four straight quarters for the first time on records dating to 1947. That underscores the grim toll of the recession on consumers and companies.
Many economists were predicting a slightly bigger 1.5 percent annualized contraction in second-quarter GDP. It’s the total value of all goods and services — such as cars and clothes and makeup and machinery — produced within the United States and is the best barometer of the country’s economic health.
“The recession looks to have largely bottomed in the spring,” said Joel Naroff, president of Naroff Economic Advisors. “Businesses have made most of the adjustments they needed to make, and that will set up the economy to resume growing in the summer,” he predicted.
Less drastic spending cuts by businesses, a resumption of spending by federal and local governments and an improved trade picture were key forces behind the better performance. Consumers, though, pulled back. Rising unemployment, shrunken nest eggs and lower home values have weighed down their spending.
A key area where businesses ended up cutting more deeply in the spring was inventories. They slashed spending at a record pace of $141.1 billion. There was a silver lining to that, though: With inventories at rock-bottom, businesses may need to ramp up production to satisfy customer demand. That would give a boost to the economy in the current quarter.
The Commerce Department also reported Friday that the recession inflicted even more damage on the economy last year than the government had previously thought. In revisions that date back to the Great Depression, it now estimates that the economy grew just 0.4 percent in 2008. That’s much weaker than the 1.1 percent growth the government had earlier calculated.
“The GDP revealed that the recession we faced when I took office was even deeper than anyone thought at the time,” President Barack Obama said. “But the GDP also revealed that in the last few months, the economy has done measurably better than we had thought, better than expected.”
Also Friday, the government reported that employment compensation for U.S. workers has grown over the past 12 months by the lowest amount on record, reflecting the severe recession that has gripped the country.
Separately, the International Monetary Fund said in a report that a U.S. economic recovery “is likely to be gradual” and that growth could be sluggish “for a considerable period.”
The report, part of an annual IMF review of the U.S. economy, credited the government’s “strong and comprehensive policy measures,” including the bank rescue efforts and stimulus package, for ending “the sharp fall in economic output.”
Federal Reserve Chairman Ben Bernanke has said he thinks the recession will end later this year. And many analysts think the economy will start to grow again — perhaps at around a 1.5 percent pace — in the July-to-September quarter. That would be anemic growth by historical measures, but it would signal that the downturn has ended.
Naroff said he now thinks growth in the third quarter could turn out to be much stronger because companies will need to replenish bare-bone stockpiles of goods.
“You could get a huge swing in inventories that could create a much bigger growth rate than anybody expects,” he said.
If that were to happen, it’s possible the economy’s growth could clock in around 4 percent in the current quarter, he said.
Obama’s stimulus package of tax cuts and increased government spending provided some support to second-quarter economic activity. But it will have more impact through the second half of this year and will carry a bigger punch in 2010, economists said.
Even if the recession ends later this year, the job market will remain weak. Companies are expected to keep cutting payroll through the rest of this year, but analysts say monthly job losses likely will continue to narrow.
Still, unemployment — now at a 26-year high of 9.5 percent — will keep rising. The Fed says it will top 10 percent at the end of this year. Businesses will be unlikely to boost hiring until they’re certain the recovery has staying power.
In the second quarter, businesses continued to cut all kinds of spending, but not nearly as much as they had been, one of the reasons the economy didn’t contract as much.
For instance, they trimmed spending on equipment and software at a 9 percent pace in the second quarter, compared with an annualized drop of 36.4 percent in the first quarter. Similarly, they cut spending on plants, office buildings and other commercial construction at a rate of 8.9 percent, an improvement from the annualized drop of 43.6 percent in the first quarter.
Housing — which led the country into recession — continued to be a drag on the economy. Builders cut spending at a rate of 29.3 percent, also an improvement from the 38.2 percent annualized drop reported in the first quarter.
Consumers, meanwhile, did a slight retreat in the spring.
They sliced spending at a rate of 1.2 percent in the second quarter, after nudging up purchases at a 0.6 percent pace in the first quarter. It turns out consumers didn’t have nearly the appetite to spend in the first quarter as the government previously thought, according to the revisions released Friday.
In large part, that’s because wages and salaries were revised much lower in the first quarter. They totaled $6.339 trillion annualized, down from the old estimate of $6.495 trillion — a huge drop of $156 billion.
With consumers spending less on everything from cars to clothes, Americans’ savings rate rose sharply — to 5.2 percent in the second quarter, the highest since 1998.
One of the wild cards in the shape of the recovery will be how consumers behave in the months ahead. Their spending accounts for the single-largest chunk of economic activity.
A return to spending by governments helped economic activity in the spring. The federal government boosted spending at pace of 10.9 percent, the most since the third quarter of 2008. And state and local governments increased spending at a pace of 2.4 percent, the most since the second quarter of 2007.


House Pumps Funds Into ‘Cash For Clunkers’ Program

Friday, July 31st, 2009

WASHINGTON (AP) — The House voted Friday to rush $2 billion into the popular but financially strapped “cash for clunkers” car purchase program, heeding calls from consumers who hope to keep taking advantage of the trade-in incentives.
The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.
President Barack Obama said he was encouraged by the House action to keep alive a program that had “succeeded well beyond our expectations.”
Rep. Steve Israel, D-N.Y., said of the program: “This is a test drive, and people bought it big time.”
Called the Car Allowance Rebate System, or CARS, the program is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to $4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage.
House Majority Leader Steny Hoyer said the new money for the program would come from funds approved earlier in the year as part of an economic stimulus bill.
House Speaker Nancy Pelosi, D-Calif., said the cars purchased under the program were much more fuel-efficient than the bill requires.
“Consumers have spoken with their wallets, and they’ve said they like this program,” said Rep. David Obey, D-Wis.
Republicans argued that Democrats were trying to jam the legislation through. Some lawmakers also complained that many dealers were left to contend with a chaotic government-run program.
“The federal government can’t process a simple rebate. I’ve got dealers who have submitted the paperwork three times and have gotten three rejections,” said Rep. Pete Hoekstra, R-Mich. “What is a dealer supposed to do?”
There had been a $1 billion budget for rebates for new car sales in the program that was officially launched last week and has been heavily publicized by automakers and dealers.
The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.
The Senate was not scheduled to vote on Friday but lawmakers hoped to win approval for additional funding next week.
Senate action is likely next week, making sure the program would not be affected by the sudden shortage of cash.
Sen. Carl Levin, D-Mich., said the administration assured lawmakers that “deals will be honored until otherwise noted by the White House.” But he suggested that “people ought to get in and buy their cars.”
At the White House, press secretary Robert Gibbs sought to assure consumers that the program is still running and will be alive “this weekend. If you were planning on going to buy a car this weekend, using this program, this program continues to run.”
Gibbs would not commit to any timeframe beyond that.
It was unclear how many cars had been sold under the program.
Sen. Debbie Stabenow, D-Mich., said about 40,000 vehicle sales had been completed through the program but dealers estimated they were trying to complete transactions on another 200,000 vehicles, putting the amount of remaining funding in doubt.
John McEleney, chairman of the National Automobile Dealers Association, said many dealers have been confused about whether the program will be extended and for how long. Many had stopped offering the deals Thursday after word came out that the funds available for the refunds had been exhausted.
The clunkers program was set up to boost U.S. auto sales and help struggling automakers through the worst sales slump in more than a quarter-century. Sales for the first half of the year were down 35 percent from the same period in 2008, and analysts are predicting only a modest recovery during the second half of the year.
With so much uncertainty surrounding the program, North Palm Beach, Fla., dealer Earl Stewart said he planned to continue to sell cars under the program but would delay delivering the new vehicles and scrapping the trade-ins.
“It’s been a total panic with my customers and my sales staff. We are running in one direction and then we are running in another direction,” he said.


Thursday Dow Surges On Upbeat Earnings, Employment Reports

Thursday, July 30th, 2009

Now up 146 points to 9,217

NEW YORK (AP) — Upbeat corporate earnings are giving stocks another burst of energy.
Stocks surged Thursday as investors jumped on better-than-expected profit reports and a surprise drop in unemployment.
Major stock indexes rose more than 1 percent, including the Nasdaq composite index, which crossed 2,000 for the first time since October. The Dow Jones industrial average jumped 130 points.
Investors looked to stronger earnings as a good sign about the direction of the economy. Motorola Inc. reported a profit although it was expected to post a small loss, and MasterCard Inc. posted earnings that topped expectations.
General Electric Co. jumped after a Goldman Sachs analyst raised his rating on the stock and predicted the industrial conglomerate won’t have to split off its lending arm due to a financial sector reform proposal in Congress.
“There are some specific stock stories that are getting people involved and making people confident,” said Nick Kalivas, vice president of financial research at MF Global in Chicago.
Traders also welcomed a report that the number of Americans continuing to collect unemployment benefits unexpectedly fell last week to 6.2 million. Economists polled by Thomson Reuters had expected that figure to rise to 6.3 million from 6.23 million last week.
Investors have been following revenue figures and profit forecasts from companies to determine when consumers might start spending again. Colgate-Palmolive Co.’s profit report was typical: Earnings rose 14 percent even as sales fell because the consumer products maker was able to cut costs.
“This is what happens first, people have to get their cost structure in-line, and we’re seeing that with the earnings that are coming out,” said Brett D’Arcy, chief investment officer at CBIZ Wealth Management Group.
In midday trading, the Dow rose 133.39, or 1.5 percent, to 9,204.11. The Standard & Poor’s 500 index rose 15.33, or 1.6 percent, to 990.48. The index hasn’t traded above 1,000 since November.
The Nasdaq advanced 25.61, or 1.3 percent, to 1,993.37. It rose to nearly 2,010 in morning trading, its first move above 2,000 since Oct. 3. The index is up more than 55 percent from its low of 1,269 in March.
The advance is the latest in a rally that began July 13 when companies started reporting profits that exceeded analysts’ modest expectations. The rally had stalled in the last four days but major stock indicators are still up 11 percent since the advance began.
About 2,400 stocks rose on the New York Stock Exchange compared, while only about 500 that fell. Volume came to 593.1 million shares, compared with 445 million traded at the same point Wednesday.
Among companies reporting earnings, Motorola rose 48 cents, or 7.3 percent, to $7.05. MasterCard rose $11.80, or 6.3 percent, to $200.35. Colgate fell $3.19, or 4.2 percent, to $72.66.
GE rose 92 cents, or 7.5 percent, to $13.18.
The gains in stocks weakened demand for the safety of government debt. Bond prices slipped, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.70 percent from 3.67 percent late Wednesday.
The drop comes ahead of an auction later Thursday of $28 billion of seven-year notes. Weak demand at auctions earlier this week raised concerns that the government might have to offer higher returns on bonds to lure in investors, which would have the negative effect of raising borrowing costs on loans such as mortgages.
Light, sweet crude rose $2.67 to $66.02 a barrel on the New York Mercantile Exchange.
The dollar mostly fell against other major currencies, while gold prices rose.
The Russell 2000 index of smaller companies rose 9.35, or 1.7 percent, to 557.73.
Overseas, Japan’s Nikkei stock average rose 0.5 percent. In afternoon trading, Britain’s FTSE 100 gained 2 percent, Germany’s DAX index rose 1.7 percent, and France’s CAC-40 rose 2.1 percent.


New U.S. Jobless Claims Rise More Than Expected

Thursday, July 30th, 2009

WASHINGTON (AP) — The number of newly laid-off workers filing first-time claims for jobless benefits rose last week, the government said, though the increase was mostly due to seasonal distortions.
Many economists say new claims, which track layoffs and firings, are trending downward in a modest sign of improvement in the labor market.
The Labor Department said Thursday that the initial claims for unemployment aid rose by 25,000 to a seasonally adjusted 584,000, above analysts’ estimates. But the figure is below the 617,000 new claims filed in late June, before the numbers began to be distorted by a shift in the timing of temporary auto shutdowns.
The four-week average of claims, which smooths out fluctuations, fell to 559,000, its lowest level since late January. And the number of people remaining on the jobless benefit rolls unexpectedly fell to 6.2 million from 6.25 million, the lowest level since mid-April.
“The latest report is actually reasonably good news,” Abiel Reinhart, an economist at JPMorgan Chase & Co., wrote in a client note. “Obviously, claims are still high … but things appear to be gradually improving.”
Stocks surged in morning trading as investors welcomed both the new data on jobless claims and better-than-expected earnings. The Dow Jones industrial average rose about 170 points, or 1.9 percent, and broader stock averages also jumped.
Still, jobs remain scarce and the unemployment rate, which hit 9.5 percent for June, is expected to surpass 10 percent by year’s end.
Weekly claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. The lowest level this year was 488,000 for the week ended Jan. 3.
The increase in initial claims last week was mostly due to seasonal distortions, stemming from a move by auto companies to shut their plants earlier than usual this year. Car makers normally close their factories in early July and temporarily lay off thousands of workers as they retool plants to build new car models.
This year, those shutdowns happened in May and June as General Motors Corp. and Chrysler LLC closed plants after filing for bankruptcy protection. That shift in timing caused new claims to fall sharply in the first two weeks of July.
Claims have now rebounded from that artificial decline, a Labor Department analyst said, and next week’s numbers aren’t expected to be affected.
The recession, which began in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs. The unemployment rate is expected to rise to 9.7 percent when the July figure is reported next week.
More job cuts were announced this week. Verizon Communications Inc. said Monday that it would cut more than 8,000 employee and contractor jobs before the end of the year.
Among the states, California had the biggest increase in claims, with 4,290, which it attributed to increased layoffs in the construction and trade industries. Michigan, Florida, Connecticut and Indiana had the next-largest increases. State data lags behind initial claims data by one week.
New York had the largest drop in claims, with 22,052, which it said was due to fewer layoffs in the service and transportation industries. Wisconsin, Missouri, Pennsylvania and Ohio had the next largest declines.


3 Projects in Line for $5 Million in Federal Loans

Thursday, July 30th, 2009

By Brynn Grimley
Bgrimley@Kitsapsun.com
BREMERTON
Projects in Poulsbo, Silverdale and Port Orchard could get a jump-start if they are approved for a combined $5 million in loans from the federal Department of Housing and Urban Development.
Members of the executive board of the Kitsap Regional Coordinating Council heard presentations on those projects, along with a fourth planned for Bainbridge Island, on Wednesday.
The board recommended the three be considered by HUD officials for $5.7 million that is available to the county under the Section 108 loan guarantee program.
The Poulsbo request is from Westbury Inc., which wants $2 million to help build a plant to manufacture security and safety barriers systems primarily for airports; the Silverdale request comes from the county, which would use $1 million to help build a YMCA there; the city of Port Orchard asked for $2 million to support a downtown revitalization
project; and Martha and Mary asked for $1.5 million to help build a 12-suite rehabilitation facility on Bainbridge Island.
That adds up to $6.5 million, which is why the council had to whittle the list down.
This is only the second time in recent history that the county has used the loan guarantee program, according to Shelley Kneip, attorney for the Kitsap County Prosecuting Attorney’s Office. Previously, Section 108 loan money was used for renovations at the Admiral Theatre in Bremerton, she said.
The county is responsible for paying back the low-interest loans and has to pledge current and future Community Development Block Grant allocations to cover the loan amount as security.
To ensure the county is not on the hook for the loan payments, applicants had to prove they could pay back the total amount, or provide enough collateral to cover the cost.
The benefit of the Section 108 loan program is it does not affect an agency’s bonding authority, and provides flexibility to help a community jump-start development in areas that need it most, said Shannon Bauman, block grant program planner.
To be eligible, applicants must meet Community Development Block Grant rules and regulations, as well as at least one of three national objectives: the project must benefit low- and moderate-income people, help to eliminate “slum and blight,” or meet the urgent needs of the community.
The regional council board determined the Poulsbo project and the Silverdale project were the two most prepared to move forward and suggested they receive the full amounts requested.
County Commissioner Josh Brown expressed uncertainty about the city of Port Orchard’s plan to repay the loan. Other board members echoed those concerns, which Mayor Lary Coppola — also a KRCC member — said was agreeable.
The board stipulated the loans must be repaid in 10 years and that the projects must be ready to go no later than September 2010.
Because the Martha and Mary project was not ready for immediate implementation, the board committed to supporting the project later.
The three projects are now subject to a financial review by an independent financial consultant, which will make sure their payment plan is feasible. A 30-day comment period and a public hearing will also take place before a final loan application is sent to HUD.
A second public hearing will be held once the funds are received.

The Projects
The projects recommended to receive Section 108 loans from the federal Department of Housing and Urban Development include:
Westbury Inc.: The company plans to build in Poulsbo’s Twelve Trees Industrial Park, where it will manufacture security and safety barriers systems primarily for airports. It plans to employ 100 people, of which more than half will be from the low- to moderate-income bracket. Jobs would start at $16 an hour, plus benefits. The company requested $2 million, and will provide the remaining $500,000 it needs to get started.
Port Orchard Town Center Revitalization Project: The city of Port Orchard requested $2 million to help with the purchase of land needed for the construction of an underground parking garage and new library on Prospect Street. The cost of the parking garage, including land acquisition and design is $5.3 million. The cost of the overall downtown revitalization project is estimated at $36.6 million.
Kitsap County Silverdale Campus YMCA: The county requested $1 million for the proposed Silverdale YMCA. The county previously committed $5 million for the estimated $15 million project, which is projected to be between 50,000- and 70,000-square feet. The remaining $10 million will be funded by the YMCA of Pierce/Kitsap County. The new facility would create 74 full-time positions once open, of which 56 will be for low- to moderate-income individuals.


Your Thoughts On Health-Care Reform????

Wednesday, July 29th, 2009

Bloggers,

I am working on a story about how locals feel about the health-care reform proposals now in the U.S. House and Senate. Send me an e-mail with your views on what should — or should not — be included in any bill that emerges. Do you favor a government option, single payer, leave as is? Do you believe something will pass Congress this fall?

Rachel Pritchett, 475-3783, rpritchett@kitsapsun.com


Wednesday Stocks Slide on Worries About Economy

Wednesday, July 29th, 2009

Dow now at 9,067, down 40 points.

NEW YORK (AP) — The latest durable goods report is giving the stock market new reasons to worry about the economy.
Stocks fell Wednesday after the Commerce Department said orders to U.S. factories for big-ticket manufactured goods dropped an unexpectedly steep 2.5 percent in June, the latest sign that the economy could remain troubled for some time. The market’s July rally has been on hold since Friday as investors look for clues about the economy’s direction.
The drop in orders reflected the troubles in the auto industry and a sharp drop in demand for commercial aircraft. It was the largest slide in five months. Economists were expecting a decrease of 0.6 percent.
Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, cautioned against reading too much into one economic number because he expects readings will continue to come in mixed as the economy begins to recover.
“There’s a good economic number and then there’s a bad number and that’s probably what you’d expect at this juncture of the recession,” he said. “Hopefully it’s two steps back and three steps forward.”
In midday trading, Dow Jones industrial average fell 57.29, or 0.6 percent, to 9,039.43. The Standard & Poor’s 500 index fell 8.17, or 0.8 percent, to 971.45, while the Nasdaq composite index slid 15.05, or 0.8 percent, to 1,960.46.
On Tuesday, stocks finished mixed after several corporate earnings reports and the Conference Board’s reading on consumer confidence fell short of expectations.
Energy company stocks dragged on the overall market after crude inventories rose more than expected last week, according to a weekly Energy Department report. The rise prompted worries that weakness in the economy was curbing demand for energy.
Occidental Petroleum Corp. fell $2.44, or 3.4 percent, to $69.25, while Schlumberger Ltd. fell $1.84, or 3.4 percent, to $52.76.
Light, sweet crude fell $3.94 to $63.29 a barrel on the New York Mercantile Exchange.
In corporate news, Microsoft Corp. and Yahoo Inc. announced a 10-year deal that gives Microsoft access to the Internet’s second-largest search engine audience. Microsoft rose 3 cents to $23.50, while Yahoo fell $1.89, or 11 percent, to $15.33.
Media conglomerate Time Warner Inc. said its second-quarter profit fell 34 percent on lower revenue in the company’s publishing, movie and online properties. Its earnings topped estimates but revenue fell short of projections. The stocks rose 23 cents to $26.78.
Sprint Nextel Corp. fell 49 cents, or 10.7 percent, to $4.10 after its loss widened in the second quarter as revenue and subscribers continued to fall.
Investors have grown cautious after a two-week surge of 11 percent in major stock indexes that began when earnings reports were stronger than expected. A handful of disappointing earnings reports earlier in the week reminded investors that an economic recovery may still be far off.
The market will be looking for insights into the economy when the Federal Reserve releases its beige book report at 2 p.m. EDT. The report is a regional snapshot of economic activity.
About two stocks fell for every one that fell on the New York Stock Exchange, where volume came to 439.3 million shares compared with 506.5 million traded at the same point Tuesday.
The Russell 2000 index of smaller companies fell 3.92, or 0.7 percent, to 548.03.
Meanwhile, bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.64 percent from 3.69 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Overseas, Japan’s Nikkei stock average rose 0.3 percent. In afternoon trading, Britain’s FTSE 100 rose 0.5 percent, Germany’s DAX index rose 1.9 percent, and France’s CAC-40 advanced 1.1 percent.


Wednesday Stocks Slide on Worries About Economy

Wednesday, July 29th, 2009

Dow now at 9,067, down 40 points.

NEW YORK (AP) — The latest durable goods report is giving the stock market new reasons to worry about the economy.
Stocks fell Wednesday after the Commerce Department said orders to U.S. factories for big-ticket manufactured goods dropped an unexpectedly steep 2.5 percent in June, the latest sign that the economy could remain troubled for some time. The market’s July rally has been on hold since Friday as investors look for clues about the economy’s direction.
The drop in orders reflected the troubles in the auto industry and a sharp drop in demand for commercial aircraft. It was the largest slide in five months. Economists were expecting a decrease of 0.6 percent.
Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, cautioned against reading too much into one economic number because he expects readings will continue to come in mixed as the economy begins to recover.
“There’s a good economic number and then there’s a bad number and that’s probably what you’d expect at this juncture of the recession,” he said. “Hopefully it’s two steps back and three steps forward.”
In midday trading, Dow Jones industrial average fell 57.29, or 0.6 percent, to 9,039.43. The Standard & Poor’s 500 index fell 8.17, or 0.8 percent, to 971.45, while the Nasdaq composite index slid 15.05, or 0.8 percent, to 1,960.46.
On Tuesday, stocks finished mixed after several corporate earnings reports and the Conference Board’s reading on consumer confidence fell short of expectations.
Energy company stocks dragged on the overall market after crude inventories rose more than expected last week, according to a weekly Energy Department report. The rise prompted worries that weakness in the economy was curbing demand for energy.
Occidental Petroleum Corp. fell $2.44, or 3.4 percent, to $69.25, while Schlumberger Ltd. fell $1.84, or 3.4 percent, to $52.76.
Light, sweet crude fell $3.94 to $63.29 a barrel on the New York Mercantile Exchange.
In corporate news, Microsoft Corp. and Yahoo Inc. announced a 10-year deal that gives Microsoft access to the Internet’s second-largest search engine audience. Microsoft rose 3 cents to $23.50, while Yahoo fell $1.89, or 11 percent, to $15.33.
Media conglomerate Time Warner Inc. said its second-quarter profit fell 34 percent on lower revenue in the company’s publishing, movie and online properties. Its earnings topped estimates but revenue fell short of projections. The stocks rose 23 cents to $26.78.
Sprint Nextel Corp. fell 49 cents, or 10.7 percent, to $4.10 after its loss widened in the second quarter as revenue and subscribers continued to fall.
Investors have grown cautious after a two-week surge of 11 percent in major stock indexes that began when earnings reports were stronger than expected. A handful of disappointing earnings reports earlier in the week reminded investors that an economic recovery may still be far off.
The market will be looking for insights into the economy when the Federal Reserve releases its beige book report at 2 p.m. EDT. The report is a regional snapshot of economic activity.
About two stocks fell for every one that fell on the New York Stock Exchange, where volume came to 439.3 million shares compared with 506.5 million traded at the same point Tuesday.
The Russell 2000 index of smaller companies fell 3.92, or 0.7 percent, to 548.03.
Meanwhile, bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.64 percent from 3.69 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Overseas, Japan’s Nikkei stock average rose 0.3 percent. In afternoon trading, Britain’s FTSE 100 rose 0.5 percent, Germany’s DAX index rose 1.9 percent, and France’s CAC-40 advanced 1.1 percent.