Stocks fall as consumer spending fails to impress
NEW YORK (AP) - Stocks fell in early trading Thursday, with investors underwhelmed by news of higher consumer spending.
The Dow Jones industrial average lost 67 points to 13,041. The Standard & Poor's 500 fell nine to 1,402. The Nasdaq slipped 19 to 3,062.
The government reported that consumer spending rose in July after holding steady in June and falling in May. Separately, retailers like Target, Costco, Limited Brands and Macy's reported higher-than-expected August sales.
But investors were unimpressed. They could be worried that high gas prices will soon force people to cut down on other shopping. Gas prices have spiked this week as Hurricane Isaac menaced the Gulf Coast. On Wednesday they hit a national average of $3.80 per gallon, the highest average price ever for that date.
The government also reported that the number of Americans seeking unemployment benefits last week was flat. But investors seemed equally unimpressed by this news. They might be paying more attention to the increase in the four-week moving average, a less-volatile and usually more-reliable measure.
Trading volume was light, with many investors still on vacation until after the Labor Day weekend and scant economic reports for the past couple of weeks. Federal Reserve Chairman Ben Bernanke is scheduled to deliver a speech Friday that could move the markets, if he indicates what he believes about the economy's condition and whether he expects the Fed to step in with more action to try to help. But investors are also aware that the Fed's influence on the economy is limited.
Though there was no major news out of Europe and its debt crisis, there were plenty of reminders of the strain there. Greece's prime minister reminded his country that painful spending cuts were necessary if the country wants to keep the bailout funds it has received from Germany and other stronger European countries. Germany reported that its number of jobless citizens ticked up in August, a reminder that Europe's strongman can't keep bailing out other countries forever.
And German Chancellor Angela Merkel visited Chinese Premier Wen Jiabao to try to soothe his fears about the European debt crisis. But Wen appeared to get only more alarmed, telling reporters afterward that weaker European countries like Greece, Spain and Italy must embrace spending cuts. China, the world's second-largest economy, is a buyer of European bonds.
Shares of Yelp slipped 37 cents to $22, after a big, $4.11 jump the previous day. Investors had pushed the shares higher after realizing that insiders were hanging on to their shares, rather than selling them off as leaders have at some other tech companies, such as Facebook and Groupon.
Amazon rose $2.57 to $249.69 after reporting that it has sold out its Kindle Fire e-reader.