A drop in consumer confidence sinks stocks

Dow tumbled 145, decliners over advancers 4-1, & Naz sank 36 taking it well below 2K. The S&P 500 fell 16 to 996. Banks are sharing in the sell-off after the Financial Index almost recorded a new high yesterday.

S&P 500 FINANCIALS INDEX

Value 189.13

Change -3.40

% Change -1.8%

The Alerian MLP Index fell 1½ to the 238s, profit taking in the last 2 weeks after its recent run to 251. The Dow Jones REIT Index dropped 4, also probably from profit taking. Junk bond funds were higher & the yield on the 10-year Treasury bond fell 8 basis points to 3.51%, down sharply from 3.85% early this week.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil broker thru 70 floor on worries about weaker consumer demand.

CLU09.NYM

...Crude Oil Sep 09

...68.42

... 2.10 .......(3.o%)

Consumer confidence fell in early Aug. A growing number of Americans worried about their finances even though they expected the broader economy to improve. The Surveys of Consumers said its index of confidence for Aug fell to 63.2 from 66.0 in Jul, below expectations of 68.5. The index of consumer expectations fell to 62.1 in early Aug, its lowest reading since Mar & down from 63.2 in Jul. The fewest consumers, in the survey's 60-year history, reported improved finances, with many citing job losses, shorter working hours & smaller wage gains.

•U.S. Consumer Confidence Declines on Job Concerns, Michigan Survey Shows

J.C. Penney (JCP) posted a small loss in Q2, just topping estimates as the department store chain benefited from cost-cutting moves. JCP also boosted its annual profit outlook, but expects sluggish sales for the rest of the year after Q2 revenue fell 7.9%. JCP lost $1M (break-even per share) in Q2 ended Aug. 1 versus a profit of $117M, or 52¢ per share last year. Revenue was $3.94B, down almost 8% from $4.28B last year. Same-store sales fell 9.5% in Q2. They said the consumer climate is "very difficult." In Q3, JCP expects same-store sales to decline 5-7% & total sales to drop 3-5%. For the full year, same-store sales should fall 7- 7½% with total sales declining 5½-6%. The stock fell 1.44.

JC Penney --- 1 year





The leading averages are coming off major surges in Jul. They may need more time to digest those gains. Or maybe the difficult economic reality is starting to sink in.

Dow Jones Industrials --- 2 weeks




NAZDAQ --- 2 weeks