Stocks fluctuated during the day but significant selling into the close took all averages lower.. Dow was down 20, decliners ahead of advancers 2-1 & NAZ fell 27. Banks also sold off into the close, the Financial Index fell 6 to 159. The MLP & REIT indices each fell about 3 & junk bond funds were also weak. Treasuries dropped, taking the yield on the 10 year Treasury above 2%. Oil's gains were cut back with late day selling. Gold ended down for the week after a strong jobs report & continued turmoil in Europe eased inflation concerns.
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Consumers slashed borrowing in Aug by the most in 16 months, suggesting many are worried about taking on new debt while the economy slumped & the stock market fluctuated wildly. Fewer people used their credit cards & a measure of auto & student loan demand fell. The Federal Reserve said total borrowing dropped by $9.5B, following an increase of $11.9B in Jul. Consumer borrowing had risen for 10 straight months before the Aug decline, which was the largest drop in 16 months Borrowing for auto & student loans plunged $7.2B & a category that includes credit cards tumbled $2.3B. Another sign that the economic recovery is sputtering.
U.S. Consumer Credit Fell $9.5 Billion in August, Biggest Drop in a Year
German Chancellor Merkel said Europe's banks should look first to raise money in the private sector before turning to govs to bolster their financial cushions against potential losses from the sovereign debt crisis. An upcoming summit of the bloc's 27 leaders should send a "signal" regarding a coordinated recapitalization of Europe's banking sector to ensure the "real economy. Merkel said a recapitalization, if necessary, will have to follow a clear "hierarchy," with banks being pushed first to seek fresh private investment. Govs, in turn, would have to rely on their own resources before turning to the eurozone's bailout fund, the European Financial Stability Facility. "First the banks have to try themselves to get capital. If that approach fails, then the member states' government institutions will take action, just as we have done in 2008, 2009," she said in a reference to the capital injection some banks received during the financial crisis. "And only then, when a country can't manage this on its own, may the EFSF facility be used," she added, saying that any assistance from the €440B ($590B) EFSF would only be granted with tough strings attached. French officials were not commenting on reports that France wants to rely on the European bailout fund instead of a national facility to re-capitalize its banks, who are among the biggest holders of Greek bonds. The mid Oct deadline when Greece was supposed to run out of money is approaching, but it has been pushed back into Nov (maybe). European sovereign debts remain fuzzy for the weak nations.
Merkel Diverges From Sarkozy on Greek Default Threat to Banks: Euro Credit
Markets gave it the college try. But a jobs number that merely beat dreary forecasts was not good enough to carry stocks higher. Q3 earnings reports & guidance for Q4 will be drivers for stocks in Oct. If today's response to beating dreary estimates is any help, those reports may not get a warm welcome. Then there is the European debt mess & the chaos coming out of DC. The VIX, volatility index, was about even at 36, very high territory, signalling investors remain nervous.
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Treasury yields:
U.S. 3-month | 0.005% | |
U.S. 2-year | 0.288% | |
U.S. 10-year | 2.061% |
| CLX11.NYM | ...Crude Oil Nov 11 | ...82.82 | ... 0.23 | (0.3%) |
Consumers slashed borrowing in Aug by the most in 16 months, suggesting many are worried about taking on new debt while the economy slumped & the stock market fluctuated wildly. Fewer people used their credit cards & a measure of auto & student loan demand fell. The Federal Reserve said total borrowing dropped by $9.5B, following an increase of $11.9B in Jul. Consumer borrowing had risen for 10 straight months before the Aug decline, which was the largest drop in 16 months Borrowing for auto & student loans plunged $7.2B & a category that includes credit cards tumbled $2.3B. Another sign that the economic recovery is sputtering.
U.S. Consumer Credit Fell $9.5 Billion in August, Biggest Drop in a Year
German Chancellor Merkel said Europe's banks should look first to raise money in the private sector before turning to govs to bolster their financial cushions against potential losses from the sovereign debt crisis. An upcoming summit of the bloc's 27 leaders should send a "signal" regarding a coordinated recapitalization of Europe's banking sector to ensure the "real economy. Merkel said a recapitalization, if necessary, will have to follow a clear "hierarchy," with banks being pushed first to seek fresh private investment. Govs, in turn, would have to rely on their own resources before turning to the eurozone's bailout fund, the European Financial Stability Facility. "First the banks have to try themselves to get capital. If that approach fails, then the member states' government institutions will take action, just as we have done in 2008, 2009," she said in a reference to the capital injection some banks received during the financial crisis. "And only then, when a country can't manage this on its own, may the EFSF facility be used," she added, saying that any assistance from the €440B ($590B) EFSF would only be granted with tough strings attached. French officials were not commenting on reports that France wants to rely on the European bailout fund instead of a national facility to re-capitalize its banks, who are among the biggest holders of Greek bonds. The mid Oct deadline when Greece was supposed to run out of money is approaching, but it has been pushed back into Nov (maybe). European sovereign debts remain fuzzy for the weak nations.
Merkel Diverges From Sarkozy on Greek Default Threat to Banks: Euro Credit
Markets gave it the college try. But a jobs number that merely beat dreary forecasts was not good enough to carry stocks higher. Q3 earnings reports & guidance for Q4 will be drivers for stocks in Oct. If today's response to beating dreary estimates is any help, those reports may not get a warm welcome. Then there is the European debt mess & the chaos coming out of DC. The VIX, volatility index, was about even at 36, very high territory, signalling investors remain nervous.
SPX Volatility Index (^VIX)
Dow Industrials (INDU)
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