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Tag: economic reports

U.S. Stocks Mostly Lower Ahead Of Economic Reports

New York (AFP) – U.S. stocks Monday moved mostly lower in early trade as investors looked ahead to a smattering of economic reports in a holiday-shortened week.

About 30 minutes into trade, the Dow Jones Industrial Average advanced 5.71 points (0.03 percent) to 16,484.12.

The broad-based S&P 500 slipped 1.58 (0.09 percent) to 1,839.82, while the tech-rich Nasdaq Composite Index declined 11.31 (0.27 percent) to 4,145.29.

With many investors still on holiday, trading volume this week is expected to be light, creating conditions for possible volatility. Markets are open all week, except for New Year’s Day on Wednesday.

Investors are watching for Monday’s report on pending home sales and other economic releases later in the week on consumer confidence, home prices and a few other indicators.

The Dow and S&P 500 last week pushed to new highs on three successive sessions before declining slightly on Friday. The S&P 500 is up more than 29 percent on the year.

Cooper Tire & Rubber fell 3.1 percent after announcing it had ended a proposed merger with India’s Apollo Tyres. The deal, announced in June, became bogged down in legal sniping related to labor problems within Cooper’s U.S. and Chinese operations.

Footwear maker Crocs gained 12.7 percent after announcing that Blackstone Group is investing $200 million in the company and taking a 13 percent stake. Crocs plans a $350 million stock repurchase program.

Dow component the Walt Disney Company rose 2.6 percent following a strong performance of its film “Frozen” over the important holiday weekend.

Banking giant Wells Fargo was unchanged after announcing a $591 million settlement with state-controlled mortgage finance giant Fannie Mae to resolve claims it sold defective loans prior to 2009.

Bond prices rose. The yield on the 10-year bond slipped to 2.99 percent from 3.01 percent Friday, while the 30-year fell to 3.92 percent from 3.94 percent. Bond prices and yields move inversely.

Dismal Jobs Report Points to Slowing Recovery

As the early August debt-ceiling deadline looms, the release of two dismal economic reports can only fan the flames of partisan debate. Both the BLS and the U.S. Department of Commerce release data that points to yet another economic slowdown. The increase in the unemployment rate, the widespread shedding of government jobs, and the increase in retail inventories—specifically automobile inventories—promise to add new flavor to Washington’s raging budget debate.

In their June jobs Report, the BLS indicated that the United States non-farm unemployment rate increased from 9.1% in May to 9.2% in June. This 0.1% increase represented the third consecutive month of rising unemployment and can be blamed primarily on the creation of a meager 18,000 jobs. To better understand the economic and political implications of this increase we should take a more focused look at the BLS numbers.

More interesting than the straightforward increase in unemployment is how these numbers varied over different sectors of the economy and segments of the population. The number of people unemployed for less than five weeks increased by an astonishing 412,000, while the number of people jobless for more than 27 weeks increased by 89,000 people. Both of these numbers indicate that employers have stopped hiring. In June, many more people were being laid off, and even fewer were getting rehired.

The most dismal sign is an overall drop in the percentage of people working. According to the report, the percentage of the population working or looking for work decreased from 58.4% in May to 58.2% in June. A true measure of the number of jobs available, this overall decline in people working shows a truly stagnant economy.

Public workers seemed to suffer the most from the economic slowdown as various federal, state and local government agencies combined to cut 39,000 jobs. A result of widespread efforts to balance state and local budgets, the loss of government jobs promises to become a big issue in the ongoing debate over federal budget deficit. With Republicans and Democrats fighting to save trillions in revenue, policymakers must wonder if further cuts to government programs is really a good thing for a stumbling economic recovery.