NEW YORK —
The late-summer lull is about to end.
Stocks fell Thursday, with investors too worried about high gas prices and stagnant employment to be impressed by higher consumer spending.
But trading volume was light, the market’s direction was steady, and there wasn’t much in the way of major economic news.
That could all change Friday. Federal Reserve Chairman Ben Bernanke is scheduled to speak at 10 a.m. EDT, and investors will be listening closely for his opinion on the economy and whether the Fed will take more action to try to prop it up.
Scott Freeze, president of Street One Financial in Huntingdon Valley, Pa., had the feeling that he was experiencing the calm before the storm. He went golfing Thursday morning with clients, figuring there wouldn’t be many more chances to leave the office.
Many of his employees and clients planned to come to work Friday morning, stick around to see what Bernanke says, and then leave early for the long weekend if it’s nothing of consequence.
“There’s so little going on, it’s all wait and see before Bernanke’s speech,” Freeze said. “I’m sure next week will be a much different scenario.”
Some thought Bernanke’s speech, for all the hype, would end up being a non-event. The statements from Fed officials are sometimes too ambiguous to really guide the market. And there’s a lot of doubt that the Fed can do anything for the economy anyway.
“Some people hang on every word, they try to figure out what kind of briefcase he’s carrying,” said John Lekas, senior portfolio manager at Leader Capital in Portland, Ore. “I think that’s a waste of time. It doesn’t matter that much.”
For much of August, with many traders on vacation and a dearth of major economic news, the market has lumbered more than galloped. On Thursday, about 2.4 billion shares were traded on the New York Stock Exchange. The average for the year so far is about 3.7 billion.
The Dow Jones industrial average closed down 106.77 points to 13,000.71. The Standard & Poor’s 500 fell 11.01 to 1,399.48. The Nasdaq composite slid 32.48 to 3,048.71.
The economic news that did surface Thursday was uninspiring to investors.
The government reported that consumer spending rose in July from June, after a flat June and a decline in May. Separately, retailers like Target Corp., Gap Inc. and Macy’s Inc. reported higher-than-expected August sales.
But rather than send stocks up, investors instead worried that the gains were only temporary, driven by back-to-school shopping that will soon peter out.
Gas prices and job prospects, which are key when people decide how much to spend, were not encouraging. Hurricane Isaac helped push the national average price for a gallon of gas to $3.83 from $3.80 Wednesday, according to the AAA. The government reported that the four-week moving average for unemployment claims also ticked higher.
Freeze, from Street One, doubts the jobs picture will improve soon, with so many companies not hiring. He thinks it’s disingenuous when they blame their hiring drought on the uncertainty of not knowing who will be president next year.
“They’re saying, ‘I don’t know what my tax situation will be,’ or ‘I don’t know if Obama will be president and I don’t want to deal with Obama’s health care plan,”’ he said. “I think these are just easy excuses for the corporations to use, because quite frankly the production levels and the revenue they’re generating don’t warrant hiring new employees.”
Among the stocks that did make notable moves:
—Pandora Media Inc. jumped more than 14 percent, rising $1.44 to $11.52. The Internet radio company reported big increases in revenue from advertising, subscriptions, and from listeners accessing the website from mobile devices.
—TiVo Inc., known for its digital video recorders, fell more than 3 percent, losing 32 cents to $9.04, after reporting a larger quarterly loss and missing analysts’ revenue predictions.
—Vera Bradley, the maker of high-end handbags, lost almost 9 percent, slipping $2.09 to $21.53. Weak sales in May and June forced the company to cut its earnings and revenue predictions for the year.
NEW YORK —
The late-summer lull is about to end.
US rig count up 12 to 1,883
Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. rose 12 this week to 1,883.
Visa, Amazon pull stock market lower
Disappointing news on the American consumer, reflected in the results of retail giant Amazon and credit card processor Visa, dragged down the stock market Friday, putting two major indexes on course for a weekly loss.
Very bad week: Airline disasters come in a cluster
Nearly 300 passengers perish when their plane is shot out of the sky. Airlines suspend flights to Israel’s largest airport after rocket attacks.
Dave Ramsey: Keep hands off the 529 money
Should we use money from our son's 529 plan for college to pay off debt?
New Jersey sues over Florida pizza shop logo
The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the Garden State Parkway’s green and yellow signs.
Laclede Group gets nod to buy Alabama company
The Alabama Public Service Commission this week voted to approve the acquisition of Alabama Gas Corp. by The Laclede Group from Energen Corp.
France: Air Algerie flight vanishes over N Mali
An Air Algerie flight carrying 116 people from Burkina Faso to Algeria’s capital disappeared from radar early Thursday over northern Mali after heavy rains were reported, according to the plane’s owner and government officials in France and Burkina Faso.
US stocks rise as investors weigh earnings
Stocks mostly rose in early trading Thursday as several big companies across industries reported second-quarter earnings, including Facebook, Ford and equipment maker Caterpillar.
GM profit 2Q falls 85 pct. on recall costs
Recall costs chopped $1.5 billion from General Motors’ bottom line in the second quarter, cutting its net income by 85 percent.
Get paid for posts? Social networking’s new twist
Facebook and most other social networks are built on the premise that just about everything should be shared — except the money those posts produce.
- More Business Headlines
- US rig count up 12 to 1,883