- The Washington Times - Friday, May 15, 2009


Wall Street posted midday losses Friday, following a Labor Department report that consumer prices were flat in April.

The Dow Jones Industrial Average was at 8,287.20, down 44.12 points. The broader Standard & Poor’s 500-stocks Index was at 884.62, down 8.45 points, and the tech-heavy NASDAQ was at 1,687.09, down 2.12 points.

The Consumer Price Index, the average price of goods and services purchased by U.S. households, was unchanged in April primarily because of a decreases in energy and food costs, the department said.

Excluding the energy and food prices, the index increased 0.3 percent, suggesting consumers are spending enough to drive prices upward and the economy is moving toward the end of the recession that started in December 2007.

The markets are up roughly 25 percent in the past two months, largely on promising first-quarter reports by major U.S. banks and a government report last week stating most could withstand a prolonged recession.

However, the markets have struggled this week to extend the rally, following downbeat reports on retail spending and first-quarter reports from such major retailers as Macy’s Inc.

The Dow lost more than 155 points Monday and 184.22 points Wednesday.

Macy’s this week reported a first-quarter loss of $88 million but met analysts’ expectations.

In addition, Chrysler LLC and General Motors Corp. announced plans to cut contracts with hundreds of dealerships.

GM said Friday it will terminate 1,100 franchise agreements, and Chrysler said Thursday it will do the same with 789 dealerships nationwide.

Also on Friday, the economy of European countries contracted 2.5 percent in the first quarter, according to Eurostat, the statistical office for the six nations that use the euro currency and the 27-country European Union.

In addition, a Reuters-University of Michigan index showed consumer sentiment increased from 65.1 in April to 67.9 in May, an eight-month high. Economists in a Reuters survey expected a preliminary May reading of 67.0.

Earlier this week, the Treasury Department said it will give billions in bailout funds to six major life-insurance companies. The Commerce Department said retail sales fell 0.4 percent in April, after analysts predicted no change from March. And the Labor Department reported the number of first-time claims for unemployment insurance increased last week by 32,000. The number of continuing claims also increased last week, to 6.6 million — a record high for 15 straight weeks.

In overseas trading, Japan’s Nikkei stock average rose 1.88 percent. In midday trading, Britain’s FTSE 100 was down 0.33 percent, Germany’s DAX index was up 0.02 percent, and France’s CAC-40 was up 0.4 percent.

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