The slumping U.S. economy is hurting companies overseas:
Royal Philips Electronics reported a sharp drop in first-quarter profits as a decrease in television sales in North America offset growth in its health care and lighting businesses.(AP)
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The U.S. is wrestling with the worst food inflation in 17 years: Analysts expect new data due on Wednesday to show it's getting worse. That's putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases to their customers.
U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the last 15 years, according to the U.S. Department of Agriculture. And the agency says 2008 could be worse, with a rise of as much as 4.5 percent.
Higher prices for food and energy are again expected to play a leading role in pushing the government's consumer price index higher for March.
Analysts are forecasting that Wednesday's Department of Labor report will show the Consumer Price Index rose at a 4 percent annual rate in the first three months of the year, up from last year's overall rise of 2.8 percent.
For the U.S. poor, any increase in food costs sets up an either-or equation: Give something up to pay for food.(AP)
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The reasons of food costs rising:Rapid economic growth in China and India has increased demand for meat there, and exports of U.S. products, such as corn, have set records as the weak dollar has made them cheaper. That's lowered the supply of corn available for sale in the U.S., raising prices here.(AP)
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NEW YORK (AP) -- Investors knew the first three months of the year were bad for companies, but now it looks like they were downright abysmal -- and that there might be more pain to come. With the nation's banks releasing their quarterly results this week, anxiety has returned to the stock market.
Last week ended on a grim note, with the Dow Jones industrials falling 256 points Friday after General Electric Co. reported a profit decline and lowered its forecast for the year. The disappointing data from GE arrived on the heels of downbeat earnings and outlooks from companies ranging from chip maker Advanced Micro Devices Inc. to home furnishings retailer Bed Bath & Beyond Inc.
"The biggest risk to the market is earnings," said David Chalupnik, head of equities at First American Funds, adding that profit forecasts for 2008 appear too optimistic at this point. "We do expect April to be a volatile month -- we expect earnings and guidance to be poor."
The Dow finished last week down 2.25 percent, the Standard & Poor's 500 index ended 2.74 percent lower, and the Nasdaq composite index slid 3.41 percent.
This week, the banks open their books. Roiled by a mortgage industry that went haywire when homeowners started defaulting on their loans, the nation's financial centers are struggling. When banks struggle, they get tight with their lending -- which in turn dampens the economy.
Citigroup Inc., the nation's largest bank by assets, and Merrill Lynch & Co., the world's biggest brokerage, are each believed to have suffered losses in the first quarter, although narrower than those they reported in the fourth quarter. Washington Mutual Inc., the nation's largest savings and loan, is also anticipated to post a loss.
Analysts predict JPMorgan Chase & Co. and Wells Fargo & Co. will report profits, but below the level seen a year ago. Meanwhile, investors will scrutinize first-quarter results from Bear Stearns Cos. to see how wise it was for JPMorgan to buy the struggling firm.
Beyond the actual earnings from these institutions, however, investors will examine how much the banks' assets lost value in the first three months of the year and seek clues about whether those values could fall further.
"The good news is, the credit markets do look to be improving a bit," Chalupnik said, pointing to the shrinking spread between the rates for high-risk and low-risk debt. "But I think it will still be rough going for the financial sector."
The torpid economy is making the consumer lending industry a tough one to navigate. Economic reports will probably take a back seat to earnings this week, but any hint that consumers are spending even less than individual retailers' dismal March sales figures implied last week could influence investors in the long term.
On Monday, the Commerce Department reports on March retail sales. According to the median estimate of economists surveyed Friday by Thomson Financial/IFR, the market forecasts a flat reading, following a drop in February.
"If it's flat, that means that real spending has declined," said Bill Hampel, chief economist for the Credit Union National Association and Affiliates. For retail sales to actually increase, growth needs to be at least about 0.3 percent, he pointed out. "The last four months, we've essentially had no growth in retail sales when adjusted for inflation."
Some analysts say the market is at or near its bottom, having already taken into account a recession. A severe recession could mean sluggishness in the stock market for several months, if not longer.
"This is a consumer-led recession," Hampel said, noting that households are paring back spending because their debt is unmanageable, and that drop in spending is dragging down the economy. "How long they do this is how long the recession ends up being."
The soaring cost of necessities, like food and gasoline, is also dampening spending.
The Commerce Department reports this week on producer prices and consumer prices in March. Both are expected to increase, but fairly modestly -- and furthermore, the Fed's main concern right now is economic growth.
"Although the Fed cannot say this, I think for the most part, as a group, it doesn't matter to them what happens to inflation this week," Hampel said.
Why Wall Street fell at every turn? Why Famous corporate profits recession ? Reasons inseparable from the following variables of the multivariate analysis and, ultimately, the real variables is from the China factor. Since the United States established diplomatic relations with China, the impact of these variables impact has been brewing for 30 years, the United States had undergone this stage full of hope from variables of China , and also had enjoyed the benefits, but it is now entering dashed hopes, or even the consequences of the disaster.
TW stocks? ← foreign investment trends? ← US stocks ↓ ← US financial and banking stocks ↓ ← US secondary mortgage market deterioration ↑ ↑ ← US Consumer Credit deterioration ↑ ↑← US the unemployed ↑↑ ← US manufacturing deterioration↑ ↑ ← US manufacturing and orders shift oversea and increased productivity ↑ ↑ ← China (the lowest price) productivity ↑← US implement the policy of free trade↑:
* The influx of money will always flow to pay the highest rates of the market, the trend of moving money, will bring investment, employment opportunities, income and prosperity to flee (from The Bull Hunter).
* In 5 years since year 2000 , US had increased about 300 million unemployed workers from manufacturing , by the year 2015 will increase the estimated 3.3 million people are unemployed, US pay income thus reducing more than $150 billion (from China Inc).
今天及本週美國股市重挫： The Dow fell 256.56, or 2.04 percent, to 12,325.42. GE was by far the steepest decliner among the 30 stocks that comprise the Dow. Its shares dropped $4.70, or 13 percent, to $32.05.For the week, the Dow lost 2.3 percent, the S&P 500 declined 2.7 percent and the technology-heavy Nasdaq gave up 3.4 percent.
美國代表性公司第一季業績大幅衰退： General Electric Co.(GE) reported a 5.8% drop in first-quarter net income amid weakness in its sprawling financial-services operations and issued a disappointing forecast for the rest of the year, delivering another blow to markets already concerned about a U.S.-led economic slowdown. The smaller-than-expected profits from GE injected anxiety into a market that earlier this week saw disappointing results from aluminum producer Alcoa Inc. and a warning from chip maker Advanced Micro Devices Inc(AMD).
美國四月份消費者信心指數26年來最低： The preliminary Reuters/University of Michigan index of consumer sentiment fell to 63.2 for April -- its lowest point since 1982 -- from 69.5 in March, according to Dow Jones Newswires. Economists polled by Thomson/IFR had, on average, expected a reading of 68.
