Warnings of weaker sales from two major companies, and concern that the Fed will soon start withdrawing its support for the economy is making investors jittery, and that sent the stock market into a nose-dive.
The Dow Jones industrial average slumped 225-points to 15,112–its worst day in nearly two months.
The S&P 500 slid 24-points to 1,661 and the Nasdaq composite index fell 63-points to 3,606.
It’s all about investor confidence:
ABC News Senior Business Editor Sandy Cannold tells us, “When you have major members of the Dow Jones Industrial Average and major bellwethers in your industries telling you that things are not as good as they expected, that starts to create concerns about what’s ahead for the economy.” The S&P and Dow indices lost nearly 1-and-a-half percent of their value; the Nasdaq slid 1.7%. Another reason–Poor retail sales mixed with a low volume of summer trading. Art Hogan, chief market analyst at Lazard Capital Markets, says “What happens in these violent moves in the summertime when we have low volume down drats like this is we create bargains. We tend to throw the baby out with the bath water. Everything gets sold.”
Facebook says it plans to test a mobile payments service that lets you make purchases inside mobile applications using payment information you’ve added to your account on the social network.
A judge has delayed a ruling on a plan by American Airlines to merge with US Airways and exit bankruptcy protection because of the federal government’s lawsuit against the merger.
Cisco Systems is planning to lay off 4-thousand workers because its routers are suspected of having secret codes embeded that allow the NSA to spy on users overseas. “Ever since this NSA thing they’ve been getting quietly banned in a lot of countries,” says Tech Analyst Rob Enderle. Cisco’s not commenting on the layoffs. There is no secret code in Cisco routers.
General Motors’ operations in Egypt are shut down indefinitely because of violence in the country. The company has closed its plant in the Cairo suburb of 6th October City, where it makes cars, light trucks and minibuses, and closed its offices in Cairo. GM has around 14-hundred workers in Egypt.
The price of gasoline is down a nickle a gallon around the state to an average of $3.41. AAA’s Doug Shupe says slump is likely because most people have already taken their summer vacations. “There is, of course, Labor Day, which is just around the corner, and we we expect the demand for fuel to go up in that last week of August,” Shupe says. “we are going to watch these gas prices to see where they go.” Shupe also says if that tropical disturbance in the Gulf develops into something, it could cause gas prices to jump. In Houston, the average price at the pump is also down–six-cents in the past week–and also at $3.41/gal.
The U-S government may change the rules for the gas mileage estimates you see on car window stickers, after finding that fuel economy figures for Ford’s C-Max gas-electric hybrid were inflated by nearly 9-percent because of a flaw in EPA test requirements.
Ford did nothing wrong.
“No kids under 8 after 7.”
That’s the new policy at Houston’s La Fisheria restaurant, which calls itself “family-friendly,” but knows not everyone wants crying kids with their catfish. The Houston Business Journal reports the new rule isn’t hurting business at all–all reservations were filled last weekend.