- The Washington Times - Tuesday, April 14, 2009

UPDATED:

Stocks prices on U.S. markets were down Tuesday through midday trading, following a Commerce Department report that shows that March retail sales dropped 1.1 percent, after two months of gains.

The Dow Jones Industrial Average was down 135.40 points, to 7,922.41. The broader Standard and Poor’s 500-stocks Index was at 842.63, down 16.10 points, and the NASDAQ was down 29.93 points, to 1,623.38.

The Commerce Department report showed $344.4 billion in retail sales last month — 9.4 percent less than in March 2008. Sales from January through March 2009 were down 8.8 percent, compared with the similar period a year ago. Among the biggest sale drops in March 2009, compared to March 2008, were at U.S. gasoline stations, where sales were down 34 percent. Auto and parts dealers reported a 23.5 percent drop in sales.

Goldman Sachs Group Inc.’s better-than-anticipated earnings reports Monday night appeared not to bolster investor confidence. The Wall Street-based investment bank reported $1.81 billion in profits and said it will issue $5 billion in stock to help repay the $10 billion Treasury Department loan it received last year.

A midday speech by President Obama did little to turn around losses in early trading. Though the president said “hard times” are not over and spread the blame for the economic recession from Wall Street to overzealous home buyers to Capitol Hill, he also said the economy is showing “signs of economic progress.”

Federal Reserve Chairman Ben S. Bernanke is set to give a speech later Tuesday at Morehouse College in Atlanta, in which he will say the economy is showing “tentative signs” of recovering from the recession. However, he and other members of Mr. Obama’s economic team still must stabilize financial markets to get credit flowing more freely, Mr. Bernanke also is expected to say.

Also Tuesday morning, the Labor Department reported that the Producer Price Index for finished foods dropped 1.2 percent in March, adjusted seasonally. The decline, which indicates inflation is holding steady, was followed a 0.1 percent advance in February and a 0.8 percent increase in January.

The report by Goldman Sachs is the second from a major bank in two weeks to exceed investor expectations. Wells Fargo, the second-biggest U.S. home-mortgage lender, last week forecast a record $3 billion profit for the first quarter, which helped U.S. markets posted gains for five straight weeks.

Citigroup and JPMorgan Chase & Co. are among the major financial companies also scheduled to release earnings reports this week. Financial companies were among the first and hardest hit in the global recession but have contributed to the five week rally.

JPMorgan Chase is scheduled to release it first-quarter earnings report Thursday, then Citigroup at the end of the week.

Johnson & Johnson on Tuesday was among the first major companies in nonbanking industries to report better-than-expected earnings. The company reported first-quarter profits of $3.5 billion in profits.

Intel Corp. and General Electric Co. are among the other major companies from nonbanking industries expected to announce earnings reports later this week.

Ahead of the U.S markets opening Tuesday, Dow futures closed down 135 points, to 7,860. S&P futures dropped 16.2 points, to 837.80, and NASDAQ futures dropped 18 points, to 1,314.

Overseas, Japan’s Nikkei stock average fell 0.9 percent. Britain’s FTSE 100 rose 1.05 percent. Germany’s DAX index gained 0.50 percent, and France’s CAC-40 rose 0.28 percent.

The Dow closed Monday at 8,057.81, down 25.57 points. The S&P closed up 2.17 points, to 858.73, and the NASDAQ closed at 1,653.31, up 0.77 points.

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