U.S. Stocks Decline on Global Economic Concern

U.S. Stocks Decline on Global Economic Concern

Scott Eells/Bloomberg

Traders work on the floor of the New York Stock Exchange (NYSE) in New York.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Photographer: Scott Eells/Bloomberg

March 22 (Bloomberg) -- Jill Cuniff, president of Edge Asset Management, discusses investment strategy and the outlook for the stock market. She speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

U.S. stocks retreated, trimming the longest monthly rally since September 2009 for the Standard & Poor’s 500 Index, as manufacturing contracted in China and Europe and FedEx Corp. (FDX) tumbled amid a disappointing forecast.

FedEx sank 4.5 percent after the world’s largest cargo airline predicted slower growth in coming quarters. The Dow Jones Transportation Average, which is considered a proxy for economic growth, slumped 1.9 percent. Commodity shares had the biggest losses in the S&P 500 among 10 groups as Alcoa Inc. (AA) and Chevron Corp. (CVX) dropped at least 2.3 percent. Bank of America Corp. (BAC) fell 1.8 percent to pace declines in financial shares.

The S&P 500 lost 0.6 percent to 1,393.99 at 1:23 p.m. New York time, slumping 1.1 percent in three days. It’s risen 2.1 percent in March, on pace for a fourth monthly rally. The Dow Jones Industrial Average fell 67.47 points, or 0.5 percent, to 13,057.15. The Russell 2000 Index slid 1.2 percent to 820.39. About 3.6 billion shares changed hands on U.S. exchanges.

“We are watching China closely,” said Scott Armiger, a portfolio manager at Christiana Trust in Greenville, Delaware, which has $11 billion in client assets. “There are still a lot of questions about the pace of economic growth,” he said. “It’s not unusual to have a pullback in the market after a strong run. We’ve made a lot of money in less than six months. We’ve been questioning: are investors being too greedy?”

Equities joined a global slump today as a Chinese manufacturing index indicated a worse contraction this month. Euro-area services and manufacturing output contracted more than economists forecast. Stocks fell even after data showed that jobless claims dropped to the lowest level in four years, reinforcing signs the U.S. labor market is picking up.
2012 Rally

Today’s slump trimmed this year’s gain in the S&P 500 to 11 percent. The benchmark gauge is up 27 percent from its October 2011 low amid economic and corporate data that exceeded projections. Financial and technology shares have soared at least 33 percent during that period.

“There’s enough of a reason there after the sharp run-up in stocks for the market to pull back or go sideways in the short term,” said Mark Bronzo, who helps manage about $125 billion at Guggenheim Investments, in Irvington, New York. “Most people recognize that China growth has slowed. It’s a question of: is it going to be a sharp or a mild slowdown?”

Companies most dependent on economic growth had the biggest declines among 10 groups in the S&P 500 today, as commodity, financial and industrial shares retreated at least 1 percent. The Morgan Stanley (MS) Cyclical Index dropped 2 percent. A measure of 11 homebuilders in S&P indexes slumped 2 percent.
FedEx Forecast

FedEx slumped 4.5 percent to $91.56. It forecast a profit range for its current fiscal quarter whose low end trailed analysts’ estimates amid slowing express-shipment demand.

The company is responding to a drop in express shipments and “below-trend” growth by parking an unspecified number of planes in the desert, reducing flight hours and reviewing domestic capacity. The range of goods delivered by FedEx and United Parcel Service Inc. (UPS) makes them economic barometers.

Energy and raw material shares retreated as the S&P GSCI gauge of commodities declined amid concern about slower demand. Alcoa retreated 2.5 percent to $10.01. Chevron slumped 2.3 percent to $105.48. Consol Energy Inc. (CNX) tumbled 5.7 percent to $32.50 for the biggest drop in the S&P 500. Industrial companies also declined as Caterpillar Inc. (CAT) dropped 2.7 percent, the most in the Dow, to $106.06.

The KBW Bank Index lost 1.2 percent as all of its 24 companies declined. Bank of America slipped 1.8 percent to $9.65. Citigroup Inc. (C) slipped 1.9 percent to $37.07.
Discover, Dish

Discover Financial Services (DFS) added 4.2 percent to $32.97. The payments network company said fiscal first-quarter profit rose 36 percent to a record as consumers spent more on credit cards.

Dish Network Corp. (DISH) rose 3.2 percent to $33.37. The second- largest U.S. satellite-TV provider has its share-price estimate increased to $41 from $35 at Deutsche Bank AG. U.S. regulators began removing barriers to the company’s proposed mobile high- speed data network, voting 3-0 yesterday to begin recasting rules that reserve the company’s recently acquired airwaves for satellite use.

Bats Global Markets Inc. (BATS), founded by a high-frequency trader and nurtured by the world’s top securities firms into the third-largest U.S. stock exchange operator, will seek more than $100 million for its owners today. It plans to sell 6.3 million shares between $16 and $18 apiece after the close of trading.

Underwriters led by Morgan Stanley, Credit Suisse Group AG and Citigroup are pricing the shares at about 16.9 times estimated 2013 earnings, according to Diego Perfumo, an analyst at hedge fund adviser Equity Research Desk.
13 Employees

Started in 2005 with 13 employees, Bats was steered to prominence by brokers and traders trying to hold down fees as the New York Stock Exchange and Nasdaq Stock Market bought their biggest electronic rivals. Now, with its venues accounting for 11 percent of U.S. share volume, the Lenexa, Kansas-based company is seeking a valuation that is higher than its biggest competitors, data compiled by Bloomberg show.

“Naysayers would have said these guys were just a disruptive influence and Bats was created to beat up on the traditional exchanges,” Larry Tabb, chief executive officer of research firm Tabb Group LLC in New York, said in a phone interview yesterday. “The IPO makes the case that Bats is a legitimate exchange just like NYSE and Nasdaq.”

syrian bloodshed

Explosions rock Syrian capital

March 17, 2012 -- Updated 2126 GMT (0526 HKT)

Green tape cordons off the scene following twin bomb attacks on security buildings in the Syrian capital Damascus on Saturday

(CNN) -- Deadly explosions rocked parts of Damascus on Saturday with some of the targets being Syrian government facilities, witnesses and state television reported.

At least 27 people were killed and 97 others were wounded in two blasts, state TV reported, quoting Syrian Health Minister Wael Halki.

The state-run Syrian Arab News Agency (SANA) said early indications were that two booby-trapped cars exploded in crowded areas. It put the death toll at 24, with 140 people injured and serious damage caused to surrounding buildings.

One explosion occurred near the customs criminal investigations department, witnesses said. Another struck near the Air Force intelligence headquarters in Tahrir Square in a different area of the city.

State TV reports blamed the explosions on "terrorists."

The explosion by the customs criminal investigations department was only a short distance from Umayyad Square, where state media reported Friday that huge numbers turned out to demonstrate in support of the regime of President Bashar al-Assad.

The blast near the Air Force intelligence headquarters was close to where twin bombings struck the offices of two security branches in Damascus in December. The government blamed terrorists inside and outside of Syria, but the opposition called the attacks the work of the regime. The capital was hit by another blast in January.

The Local Coordination Committees (LCC) of Syria, an opposition activist network, reported seeing a large white cloud of smoke hanging above Damascus Friday.

Twenty-two people were killed elsewhere in Syria Saturday, the LCC said, including a child, two military defectors and two people under torture. The child, 11, died in the city of Raqqa when security forces fired on a funeral procession, the LCC said.

Eight other deaths occurred in Raqqa and five in Homs, the LCC said, with others reported in Jabal al-Zawiyah, the town of Tremseh, in Hama province, and Inkhel, in Daraa province.

Opposition activists also spoke about the aftermath of an attack in the Rifai district of Homs province this week, in which they said at least 32 children and two women were found, most of them injured.

"The children were tortured -- beaten, abused, fingers cut off, and shot by thugs," said Waleed Faris. Faris is a pseudonym.

An activist identified only as Abu Faris was part of a rescue operation in Rifai. He described seeing abandoned neighborhoods, "tens of bodies" and "horrific corpses, shot, mutilated -- everywhere."

The latest violence comes a day after Kofi Annan, special joint U.N-Arab League envoy, briefed the U.N. Security Council Friday on the Syrian crisis via a private teleconference.

Speaking to reporters afterward from Geneva, Annan said he was working hard to stop the yearlong violence in Syria and "get unimpeded access" for humanitarian relief.

"I'm doing my best with the support of everyone to try to find a peaceful solution," Annan said. "The Syrian people want to get on with their lives. They are tired and they suffered a lot."

He said U.N. humanitarian agencies are to arrive in Syria this weekend "if they are not there already, to start their mission with the Syrian government."

The former U.N. secretary-general said the situation in Syria is "much more complex" than that in Libya or other nations. "It's a conflict in a region of the world that has seen many, many traumatic events. I think we need to handle the situation in Syria very, very carefully," he said. "Any miscalculation that leads to major escalation will have impact in the region."

Asked about the prospects of a coalition government, Annan said such a development would have to emerge from talks among Syrians.

U.N. Security Council members are backing Annan's efforts, said Mark Lyall Grant, the British ambassador to the United Nations and the current council president.

Grant didn't disclose details about the meeting but told reporters the session was "comprehensive."

Bashar Jaafari, the Syrian ambassador to the United Nations, also told reporters that "Syria is committed to making Mr. Annan's mission successful."

Annan met last weekend with the Syrian president in Damascus and the Syrian opposition in Turkey in an effort to end the violence that has swept the nation since Syrian security forces cracked down on protesters a year ago. He described the atmosphere in the talks as "welcoming and correct."

Most reports from inside Syria indicate the regime is slaughtering civilians to wipe out dissidents seeking al-Assad's ouster. The al-Assad family has ruled Syria for more than four decades.

But al-Assad's regime has said "armed terrorist groups" are behind the bloodshed in Syria and says it has popular support for its actions.

The Syrian government Friday underscored its position on terror in letters to top U.N. officials, including U.N. Secretary-General Ban Ki-moon. It said it was protecting its citizens from "terrorists" who are slaughtering and murdering "innocent citizens."

The government said Syria is working to find a political solution to the crisis and wants to cooperate with Annan.

More than 8,000 people have died in the conflict, according to the United Nations, but opposition activists say the overall toll is more than 9,000, most of them civilians.

homeless in usa

Number of people in poverty reaches highest level in 51 years

WASHINGTON — The income of American households fell only slightly last year despite the severe recession because of income gains among the elderly, the Census Bureau reported Thursday.

But the number of people in poverty reached its highest level in 51 years.

Median household income was $49,777 in 2009, down 0.7% from a year earlier, a change that was not statistically different from 2008, the agency said.

"The good news is there's less bad news than we thought," says Sheldon Danziger of the Population Studies Center at the University of Michigan.

He says the federal stimulus law appears to have boosted income more than expected by, for example, providing extended unemployment benefits and a $250 bonus for Social Security reciipients. Census Bureau division chief David Johnson says unemployment benefits kept 3.3 million people out of poverty in 2009.

Social Security kept 14 million seniors above the poverty level, he says.

Households headed by people 65 and older enjoyed a 5.8% increase in income, boosted by increased Social Security provided by the federal stimulus law. Those gains offset income drops in households headed by people 45 and under.

Income for middle-aged households — headed by people 45 to 64 — was unchanged.

The effects of the recession were apparent elsewhere in the numbers. The poverty rate rose to 14.3%, up from 13.2% in 2008.

A total of 43.6 million people lived in poverty last year, up from 39.8 million in 2008 — the third consecutive annual increase. Extended unemployment benefits lifted 3.3 million people out of poverty, compared with 900,000 in 2008.

"Today, the Census Bureau released data that illustrates just how tough 2009 was: along with rising unemployment, incomes failed to rise for the typical household, the percentage of Americans without health insurance rose to 16.7%, and the percentage of Americans living in poverty increased to 14.3%" President Obama said in a statement.

Child poverty passed the 20% threshold for the first time since 1996, fueled by a large gain among white children — from 10.6% to 11.9%, said William Frey, a demographer at the Brookings Institution.

"Hispanics are increasingly becoming the face of child poverty, overtaking the number of poor black kids in 2002 and the number of poor white kids in 2007," Frey said.

But whites also are experiencing a significant gain in child poverty rates.

"White families with children have been significantly hit by the recession as well," Frey said. "Politically, this means that concerns about the economy will be affecting poor white kids in the suburbs as well as minorities in general."

The poverty measure is imperfect because it does not include the value of key safety-net programs such as food stamps, Medicaid and the Earned Income Tax Credit. The government defined poverty for a family of four in 2009 as an income of $21,954 or less.

The number of people without medical insurance rose by 4.4 million to 50.7 million. In 2009, 16.7% of people had no medical coverage, up from 15.4% a year earlier. The jump in the ranks of the uninsured stemmed from a large drop in the number of people with private and employment-based insurance, a trend fed by high unemployment.

In 2009, households in the West and Northeast had the highest median household incomes. Real median income declined from 2008 to 2009 in the Midwest and West; changes for the Northeast and South were not statistically significant.

Among race groups, Asian households had the highest median income in 2009. Real median income declined from 2008 to 2009 for non-Hispanic white and black households, while the changes for Asian and Hispanic-origin households were not statistically different.

The Census data are closely watched because they are the broadest measure of the financial health of Americans.

Robert Rector, a senior fellow at the conservative Heritage Foundation, said the government spent about $20,000 per poor person this year, not counting Social Security.

"People got a lot of money, but the idea that giving people money was going to create employment has failed," he said. "We've had an unprecedented surge in welfare spending, on cash and goods in medical programs for low income and poor Americans."

Broken down by state, Mississippi had the highest share of poor people, at 23.1%, according to rough calculations by the Census Bureau. It was followed by Arizona, New Mexico, Arkansas and Georgia. On the other end of the scale, New Hampshire had the lowest share, at 7.8%.

Other findings from the report:

• In 2009, households maintained by naturalized citizens had the highest median income.

• In 2009, the earnings of women who worked full time were 77% of that for men. The real median earnings of men who worked full time rose by 2% from 2008 to 2009, from $46,191 to $47,127. For women, the corresponding increase was 1.9%, from $35,609 to $36,278.

poverty in usa