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Top Stories Moving the Dow Jones Industrial Average Today

By , Economist, Money Morning -

Dow Jones Industrial Average Today

Stock market today, June 27, 2014: The Dow Jones Industrial Average today (Friday) will open following a dip across U.S. markets in the last trading session on news of weaker consumer spending and bad inflation data.

Here are today’s top stock market stories you should know…

Black Friday Shopping 2012 Gets Even Crazier and Angrier

By , Contributing Writer, Money Morning -

Black Friday shopping typically involves the most inventive, discounted sales of the year.

This year, with waning sales, stiff competition and the new trend of comparison shopping via smartphone apps, both brick-and-mortar and online retailers are pulling out all the stops to win over customers.

According to a recent consumer survey by the bargain website DealNews.com, just 2% of Black Friday shoppers will shop solely in stores, while 28% will shop purely online. But retailers aim to change that stat.

New services offered this year by brick-and-mortar stores include: reserved parking spots, complimentary food and drink, survival kits of energy bars, water and coffee coupons, safe stations that will hold people's packages while they peruse and spend, and security guard escorts who will personally carry loads of gifts to parked cars.

At Mall of America in Bloomington, MN, a tailor shop will check coats for a $1, with proceeds collected benefiting the Make-A-Wish Foundation and the Salvation Army.

Some of the more upscale stores are even offering VIP lounges where shoppers can nosh, nibble, receive complimentary goodie bags, and relax until they feel rested enough to again face the maddening crowds.

John D. Morris, a senior retail analyst with BMO Capital Markets told The Wall Street Journal of this move by retailers, "It's their way of telling shoppers, "We feel your pain.'"

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U.S. Consumers Finally Bouncing Back

By , Associate Editor, Money Morning • @DavidGZeiler -

Consumers shed housing debt in the third quarter while ratcheting up spending elsewhere, raising hope that the single biggest driver of the U.S. economy - consumer spending - is back on the rise.

Mortgage balances fell 1.3% in the July-September period, according to data from the Federal Reserve Bank of New York, while overall household debt shrank by 0.6%.

Such reduction of debt - deleveraging in economist-speak - has over the past couple of years dampened consumer spending, which accounts for 70% of the economy. But as consumers make headway on their obligations, they have more money to spend on things other than paying down debt.

"I think it's a positive sign," Mark Zandi, chief economist at Moody's Analytics (NYSE: MCO), told The Wall Street Journal. "It means households are getting their financial house in order and that their heavy debt loads are much less weighty than they were."

In fact, consumers are so eager to get back to spending again that debt other than mortgage balances actually increased slightly, and credit card inquiries were up for the second straight quarter.

"There is a silver lining in all of this," Anthony Karydakis, chief economist at Commerzbank AG (PINK: CRZBY) in New York, told Reuters. "Slowly but steadily, consumers are exploring more normal ways of returning to a more normal pattern when it comes to borrowing habits."

Confidence Up

An unexpected spike in the Conference Board's November consumer confidence report released on Tuesday is another sign that people are more willing to open their wallets.

The measure rose from 40.9 in October to 56 - its steepest increase since 2003. Economists had forecast a rise only to the mid-40s. Until the November reversal, the consumer confidence index had declined steadily since February.

Of course, the index is still far below 90, a level that indicates a normal, healthy economy. But at least it's finally heading up.

"This is a huge rise in consumer confidence. It gets us back to second-quarter levels and further underscores the dramatic move that we've seen in consumer spending," Lindsey Piegza, economist at FTN Financial, told Reuters.



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U.S. Consumers Get Creative to Handle High Food and Fuel Prices

By , Associate Editor, Money Morning -

There's no question the staggering rise in food and fuel prices will eat away at U.S. households' income in coming months.

But there is the question of how U.S. consumers will cope with those increased costs - especially when so many are already worried about their jobs, savings, investments and retirement.

With gas prices nearing $4.00 a gallon, and the consumer price index (CPI) in February for food-at-home up 2.8% from 2010, U.S. consumers are facing an economic double whammy. As food and fuel expenses make up a larger slice of household budgets, U.S. consumers have to evaluate just which goods are worth buying.

Montana resident Myriam Garcia some days has to choose between filling up her truck with gas or buying food.

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How Are You Dealing With High Food and Fuel Prices?

By , Associate Editor, Money Morning -

There's no question the staggering rise in food and fuel prices will eat away at U.S. households' income in coming months.

But there is the question of how U.S. consumers will cope with those increased costs - especially when so many are already worried about their jobs, savings, investments and retirement.

With gas prices nearing $4.00 a gallon, and the consumer price index (CPI) in February for food-at-home up 2.8% from 2010, U.S. consumers are facing an economic double whammy. As food and fuel expenses make up a larger slice of household budgets, U.S. consumers have to evaluate just which goods are worth buying.

Montana resident Myriam Garcia some days has to choose between filling up her truck with gas or buying food.

Read More…

Rising Prices Mean Cautious Year Ahead for U.S. Household Spending

By , Associate Editor, Money Morning -

Following the crippling economic turmoil of the past few years, many U.S. households worked hard to tighten budgets, slash excessive spending, and live within their means.

But there are signs that consumers are starting to open their wallets again, and U.S. consumer spending - which makes up 70% of the economy - could help sustain the cautious economic recovery.

U.S. consumer confidence in February hit its highest level in three years, bolstered by economic optimism and salary increases, spurring hope that 2011 could be a year of increased household spending.

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Is Your Household Spending More This Year?

By , Associate Editor, Money Morning -

After crippling economic turmoil over the past few years, many U.S. households worked hard to tighten budgets, slash excessive spending, and live within their means.

But there are signs that consumers are starting to open their wallets again, and U.S. consumer spending - which makes up 70% of the economy - could help sustain the cautious economic recovery.

U.S. consumer confidence in February hit its highest level in three years, bolstered by economic optimism and salary increases, spurring hope that 2011 could be a year of increased household spending.

Read More…

Continued U.S. GDP Growth Will Require Strong Consumer Spending

By , Associate Editor, Money Morning -

The U.S. economy grew at a 3.2% rate last quarter, reaching a pace economists expect to be maintained through the year - but only if consumer spending remains strong.

The U.S. Commerce Department's advance estimate of gross domestic product (GDP) cited consumer spending and rising exports as key drivers of the economy's growth. A sharp slowdown in inventories stunted the increase. Excluding stockpiles, GDP grew at a 7.1% pace - its biggest increase since 1984.

U.S. GDP growth for all of 2010 grew by 2.9%, the biggest increase in five years. Last year's growth turned around 2009's struggling economy, which shrunk by 2.6%.

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Consumer Spending Will Be the Key to Continued U.S. GDP Growth

By , Associate Editor, Money Morning -

The U.S. economy grew at a 3.2% rate last quarter, reaching a pace economists expect to be maintained through the year - but only if consumer spending remains strong.

The U.S. Commerce Department's advance estimate of gross domestic product (GDP) cited consumer spending and rising exports as key drivers of the economy's growth. A sharp slowdown in inventories stunted the increase. Excluding stockpiles, GDP grew at a 7.1% pace - its biggest increase since 1984.

U.S. GDP growth for all of 2010 grew by 2.9%, the biggest increase in five years. Last year's growth turned around 2009's struggling economy, which shrunk by 2.6%.

"The consumer really drove the economy in the fourth quarter," Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC, told Bloomberg News. "The economy has moved beyond recovery to a stable state of growth."

Read More…

Two Ways to Tell if the U.S. Economy is Ready to Get Back on its Feet

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

The U.S. economy has been crippled by the financial crisis. And regardless of what policymakers try to do to spur growth, it will hobble along lamely until two major economic pillars are rectified.

Simply put, there's no chance that stock investors will see a healthy, long-term bull market until credit again begins to flow freely and home prices start rising.

Unfortunately, neither the credit market nor the housing market is yet ready to lead a sustainable economic rebound. But knowing that these are the two legs on which our economy stands, we can effectively gauge their condition, and thus be better able to predict a stock market rally.

Let me explain.

To find out how you can effectively diagnose the economic recovery read on...

Read More…

Barnes & Noble Sale Won't Rid the Retailer of its Woes

By , Managing Editor, Money Morning -

Barnes & Noble Inc. (NYSE: BKS) announced late Tuesday that it would put itself up for sale. But even with its recent struggles analysts aren't sure of what the company hopes to accomplish.

"There are companies that do this because they have to and there are companies that do this because they have impatient shareholders and I'm not sure what's driving this kind of statement," Michael Norris, a senior analyst at Simba Information, told The Associated Press. "It just seems daft."

The company's board said that it believed Barnes & Noble stock was "significantly undervalued" and that it had established a special committee to review its options.

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Flat Consumer Spending and Declining Factory Orders Point to Slower Economic Recovery

By , Contributing Writer, Money Morning -

Consumer spending in the United Sates was flat in June and personal savings were the highest in a year, underscoring how unemployment continues to hamstring the U.S. economic recovery.

Separately, U.S. factory orders fell by more than expected in June from May, and pending home sales continued to plunge as the expiration of a government subsidy for first-time homebuyers depressed housing market activity.

Taken together with the gross domestic product (GDP) data for the second quarter, the latest string of reports shows a U.S. economy that is drawing closer to a double-dip recession.

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Is the U.S. Economy Destined for Deflation?

By , Managing Editor, Money Morning -

With inflation low and the recovery waning, a growing chorus of analysts is beginning to suspect that U.S. policymakers aren't doing enough to head off deflation.

U.S. producer prices fell for a third straight month in June, sliding 0.5%. That follows declines of 0.1% in May and 0.3% in April. Core inflation, which excludes food and energy costs, managed only a 0.1% increase for the month, and is up just 1.1% in the past 12 months. The U.S. Federal Reserve's preferred target for inflation is 2%.

Meanwhile a high rate of unemployment continues to jeopardize the U.S. recovery, and economists fear that a significant drop in economic growth could tip the scales toward a deflationary spiral.

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Question of the Week: Readers Respond to Money Morning's Retail Stimulus Query

By , Associate Editor, Money Morning -

Faced with a wheezing economy that can't seem to heal, big U.S. retailers like Target Corp. (NYSE: TGT) and Office Depot Inc. (NYSE: ODP) are creating their own retail stimulus measures to lure hesitant shoppers back into stores.

Through such tactics as loan programs, credit card rebates and gift card giveaways, top retail chains are rolling out promotional strategies, hoping to break consumers out of their anti-spending doldrums.

"A lot of the government programs have come to an end," David Bassuk, an expert from financial consultancy AlixPartners, told The New York Times. "So retailers are taking it upon themselves to do everything they can to get the consumer to spend, even opening up their wallets to give money back to the consumer."

Sam's Club is taking an unusual approach: It's offering loans of $5,000 to $25,000 to its members, backed by the Small Business Administration. Superior Financial Group is managing the loans and will give Sam's members a $100 discount on the loan application fee and lower interest rates.

Read More…

Consumers Buck Economic Trends to Help Retail Sales Post Fastest Growth in Four Years

By , Contributing Writer, Money Morning -

The American consumer bucked strong economic headwinds to help retail sales post the fastest growth in four years, a report is expected to show today (Thursday), boosting optimism that shoppers are overcoming concerns about unemployment and a slumping housing market.

Sales are expected to come in at the upper end of a range between 3-4% for the first five months of the retail fiscal year that began Jan. 31, the biggest gain since 2006, the International Council of Shopping Centers (ICSC) said in advance of its June report.

The biggest gain in retail sales since 2006 could be a signal that consumers are weathering last month's drop in consumer confidence and are not as concerned as analysts feared about the economic rebound.

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