Market Talk

R’ut r’oh, as Scooby Doo would say.

US stocks see their biggest one-day drop in about a month, after a report on April retail sales throws a pitcher of cold water on the idea that economic recovery is imminent.

DJIA drops 184 (2.2%) to 8285, its biggest one-day slide percentagewise since April 20. S&P 500 loses 24 (2.7%) to 884, its third consecutive daily drop, a losing streak it hasn’t seen since the rally began. Nasdaq Comp drops 52 (3%) to 1664. Big Board volume’s heavier than average at 6.72B shares traded.

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Got any good deals on a flat-screen 1080P?

The notion that the second quarter will yield an end to the recession, as some have proffered, took an abrupt knock today, with lower-than-forecast April retail sales.

The US government is clearly spending all it can (actually, more than it can) to get us out of this predicament, but eventually the consumer needs to climb out of his economic bomb shelter and join in, too, right? At least a little.

Barclays Capital says April’s weak retail sales kicks 2Q “off to feeble start.” And even if sales improve slightly in May and June, ”we expect real consumption to be unchanged in 2Q versus our previous forecast for a 1% gain,” the firm says. Look for first-quarter spending to be revised lower, to 1.9% from initial 2.2% rise, as well, Barclays adds. Continue reading…

It's a simple problem, really; we need all your money.

The economic downturn is translating into a quicker path to insolvency for Medicare and Social Security, with no easy solution in sight.

In an annual report, the programs’ trustees moved up the date when both programs will run out of money. The Medicare fund for hospital care will be depleted in 2017, two years earlier than expected, while Social Security won’t be exhausted until 2037, four years earlier than last year’s report expected.

But with the government repeatedly bailing out the economy and financial system, it’s becoming even more of a daunting task to fix both programs, Tom Petruno writes at LA Times’ Money & Co. blog.

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It’s time to stop all the “green shoot” chatter, at least for a day.

April retail sales fall 0.4%, marking the second consecutive monthly drop and further evidence that the recession, which has cost nearly six million jobs, is still taking its toll on the consumer.

Peter Boockvar, equity strategist at Miller Tabak, sums it up:

All the green thumb gardeners out there can count as many shoots as they want but the US economy still comes down to the activities of the US consumer and the consumer is still retrenching, paying down debt, saving and getting their credit lines cut. This is a long term process and with a still difficult labor market, won’t change anytime soon.

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Headin' out to the old Peach Bowl.

Americans are ready to get back on the road, AAA says, as the summer driving season approaches.

AAA expects 27 million American will go out for a drive this Memorial Day, up 3% from a year ago, although even it concedes the roads won’t be flooded, given the state of the consumer.

I’ve driven across the country myself, and can recommend it as the best, and indeed only, way to see the nation. But America’s great love affair with the open road doesn’t seem poised for a comeback any time soon, unless we’re talking about the Joads.

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Sunshine crowd takes a couple of body blows, as government report on retail sales comes in below expectations and report on import prices comes in above expectations.

S&P futures down 15.50; DJ futures down 129. Ten-year up, yield at 3.13%.

Retail sales fell 0.4% from last month; sales were expected to rise 0.1%. March’s drop was revised to a wider 1.3% from 1.2%. After falling six straight months, sales rose in January and February, which kept the 1Q’s GDP contraction from being even worse. So this turnaround is an eye opener.

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