Thread: Ready for a grim December

Ready for a grim December

Stocks slide after the Dow's worst November in 17 years. Shoppers hit the stores this holiday weekend, but many bought only discounted goods. Yahoo execs try to quash reports Microsoft is negotiating to buy its search business.


By Charley Blaine and Elizabeth Strott

Looks like the first week of December is not likely to give investors much holiday cheer.

Retail results over the holiday weekend were somewhat better than analysts had feared, but investors have other worries. They'll be be tuning in to this morning's report on the manufacturing sector and will await Friday's November jobs report, which is expected to show continued deterioration in the broader economy.

At 10:20 a.m. ET, the Dow Jones Industrial Average was down 362 points to 8,467 after the index suffered its worst November since 1991. The Nasdaq Composite Index had fallen 67 points to 1,468, and the Standard & Poor's 500 Index had lost 44 points to 853.

The Dow had been on a tear, gaining 1,276.75 points, or 16.9%, over the past five trading sessions, the biggest five-day consecutive point gain ever for the index. It was also the first five-day winning streak since the five-day period ending July 17, 2007.



Crude oil fell $3.88 to $50.55 a barrel this morning, after the Organization of Petroleum Exporting Countries decided not to make a decision on whether to cut output at a meeting in Cairo, Egypt, this weekend. OPEC deferred the decision to Dec. 17, when it meets in Oran, Algeria.

More economic worries coming
There are a number of economic reports this week that are likely to kick December off on a worrisome note.

The Institute of Supply Management's report on manufacturing came in at a reading of 36.2 for the month of November, the lowest reading since 1982. That was down from a reading of 38.9 in October and worse than the expected reading of 38.



And there is another report on the grim state of the housing market. Construction spending fell 1.2% in October, following a 0.3% drop in September. Economists had been looking for a 0.9% drop in October.On Wednesday the ISM's service sector index comes out. Economists predict that the service industry also contracted in November.



Friday's data will likely be the most closely watched: The November jobs report is expected to show that the economy shed 300,000 jobs last month, after losing 240,000 jobs in October.

"All signals point to a very weak labor market and further weakening," Dean Maki, co-head of U.S. economic research at Barclays Capital, told Bloomberg News. "We should expect a large stimulus program shortly after (President-elect Barack) Obama takes office."

Consumers shop on Black Friday
In retail, there may be reason for hope. Shoppers were out there spending their money on Black Friday, the day after Thanksgiving and the unofficial kickoff to the holiday shopping season.

Sales on Black Friday rose 3% to $10.6 billion, year over year, according to ShopperTrak, a retail research firm.

The National Retail Federation saw signs of life, as well. The NRF estimated that shoppers spent an average of $372.57 this past weekend, a 7.2% increase from last year's $347.55. The survey polled 3,370 shoppers.

"Under these circumstances, to start off the season in this fashion is truly amazing and is a testament to the resiliency of the American consumer, and undeniably proves a willingness to spend," ShopperTrak co-founder Bill Martin said in a statement.


"While this is an encouraging start for retailers, there's no guarantee these deep discounts will continue after Black Friday weekend, which could slow spending," Martin said. "Additionally, consumers have just 27 days to shop this year as opposed to 32 in 2007, which may catch some procrastinating consumers off guard, leading to lower sales levels."

Many retailers are discounting prices aggressively in hopes of enticing shoppers focused on saving. Those deep discounts played a key role in attracting shoppers over the weekend, according to a survey by America's Research Group. About 70% of consumers bought highly discounted merchandise on Friday, the group said.

People were shopping online this past weekend as well. Black Friday saw a 1% increase in online spending, to $534 million, according to data from comScore.

But consumers have spent only $10.41 billion online so far this holiday season, a 4% decline from the same period last year.

http://articles.moneycentral.msn.com/In ... tch_081201

But consumers have spent only $10.41 billion online so far this holiday season, a 4% decline from the same period last year.



I would hazard a guess and say that's because a lot of the bargains to be found in-store were not available online?

Best to get shoppers out, about, and whet appetites for spending as well as prompt impulsive purchasing

It seems every year they are in a panic while waiting to see if they top last years sales. Yet it seems every year we manage to pull through on que. This year we don't have, atleast I haven't heard of it yet.... the big "new" must have item. Playstation, Wii, Cabbage Patch Kid......I'll be spending, but it's lovely things like tires and other basic items like socks. Others I know are doing the same or just making it 1 big item like a new TV and DVD's since that will pretty much be their entertainment. I'm sure people will spend, but will probably think things through more than they used to.

Originally Posted by azwreath

But consumers have spent only $10.41 billion online so far this holiday season, a 4% decline from the same period last year.



I would hazard a guess and say that's because a lot of the bargains to be found in-store were not available online?

Best to get shoppers out, about, and whet appetites for spending as well as prompt impulsive purchasing

Online retailers are usually smaller than most of the bigbox stores that sell online and cannot get the volume discounts that the big stores do.

Plus you hav3e the fools buying discounted made in China crap. Buy American and keep the money flowing here.

Originally Posted by jp_48504

Originally Posted by azwreath

But consumers have spent only $10.41 billion online so far this holiday season, a 4% decline from the same period last year.



I would hazard a guess and say that's because a lot of the bargains to be found in-store were not available online?

Best to get shoppers out, about, and whet appetites for spending as well as prompt impulsive purchasing

Online retailers are usually smaller than most of the bigbox stores that sell online and cannot get the volume discounts that the big stores do.

Plus you hav3e the fools buying discounted made in China crap. Buy American and keep the money flowing here.

Good advice JP, buying American is the thing to do. Also I heard on the news today that we are now in a recession...when in reality we have been in one for at least a year.....and we are probably entering early stages of depression, if anyone was willing to be honest. I am sick of the lies and propaganda. It is time to be prepared for whatever lies ahead and I am not going to be believing what MSM is spouting.