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Subscribe to RSSNEW YORK — Stock indexes fell Tuesday after the U.S. government lowered its estimate of economic growth in the third quarter. Higher borrowing costs for Spain also renewed worries about Europe's debt crisis.
Hewlett-Packard Co. sank 2.8 percent, dragging down the Dow Jones industrial average. H-P lowered its earnings forecast for the 2012 fiscal year after the market closed Monday. The tech giant said it was being "cautious," citing Europe's debt crisis and weak consumer spending.
The Commerce Department said the U.S. economy grew at a 2 percent annual rate in the July-September period, down from its initial estimate of 2.5 percent. Economists had expected the figure to remain unchanged.
At the closing bell, the Dow Jones industrial average was down 53.51 points, or 0.46 percent, at 11,493.80. The Dow had been down as many as 113 points shortly before noon. After H-P, aluminum maker Bank of America Corp. had the biggest fall among the 30 stocks in the index, 2 percent.
The Standard & Poor's 500 index was down 4.93 points, or 0.41 percent, to 1,188.05. Both the Dow and S&P briefly turned slightly higher in early afternoon trading.
The S&P has lost 5.2 percent over the past week on worries that Spain could get dragged into Europe's debt crisis and as Congress neared a deadlock over cutting the U.S. budget deficit.
The Nasdaq composite dipped 1.86 points, or 0.07 percent, to 2,521.28.
The Dow plunged 249 points Monday as a congressional committee failed to reach a deal to cut budget deficits. The congressional impasse raised fears that rating agencies might lower the U.S. government's credit rating if Congress tries to circumvent the automatic spending cuts that are supposed to occur in the event of an impasse. Some Republicans have said they would try to block cuts to defense spending.
"Markets are looking for clarity, and you didn't get that from the super-committee," says Steven Ricchiuto, chief economist at Mizuho Securities. "There's no reason to believe the economy is going to get stronger."
Across the Atlantic, there were more signs of trouble in Europe's debt crisis. Spain was forced to pay sharply higher interest rates in an auction of short-term debt. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new, center-right government coming to power this week.
Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels. Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent on the bond market. The rate on Spain's own benchmark 10-year bond is dangerously close to that level, 6.58 percent.
In other trading, Netflix Inc. sank 3.6 percent. The online video rental company said it raised $400 million from selling debt and stock as it tries to recover from a consumer backlash following price hikes.
Campbell Soup Co. sank 5.5 percent after reporting a 5 percent drop in net income. The company said price increases were not enough to offset lower volume in its soup and beverage businesses.
Medtronic Inc. rose 4.8 percent. The world's largest medical device maker reported higher-than-expected earnings and reaffirmed its full-year earnings outlook.
Associated Press contributed to this report.
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Thanks obama! 930 plus days without even attempting to present a budget....
The European financial crisis will ultimately impact America. As the European financial meltdown set off the next liquidity crisis causing massive deflationary forces and de-leveraging of assets, America's fragile economy will like wise follow suit.
Like the 2007 housing bubble implosion that bankrupted many banks, the European financial crisis will implode the Dollar bubble prop-up by the Fed. The stampede to safety will be to precious metals as European and American fiat currency deflate. The already weak domestic real estate market will be hammered as the next wave of lower prices catapults more homes into the up-side-down territory. The pipeline of foreclosures and short-sales will be at full capacity as homeowners rush to save whatever capital they have as the economy collapses and unemployment skyrockets.
Good work PMSnbc, tumble, slide, fall, slip, trip, up, down, crash, you guys are good!
Yeah to me they are the new comedy channel.
Next we'll see an article showing how things are getting better or how the government will intervene one more time.
Kellysview
Yea, thanks to republican filibustering and obstructionism!
What the hell do Republicans in the Legislative Branch have to do with the failure of the head of the Executive Branch to offer a budget to Congress??
For over half of those 930 days the democrats controlled every branch!
Europe had nothing to do with HP's fall; HP fell because they build crap. My HP was assembled with the fan blade backwards.....burned out everything, to include the hard drive. Since the factory recall/rebuild, I have had all sorts of problems with this dud. My future includes throwing it off a bridge, and buying an Apple.
Bill C-645784
You really don't have clue do you? BO and Democrats have controlled the spending and the waste of money for more than half of this election cycle.
The spending has finally been stopped in the last 12 months. It will take us 10 years to undo the damage of BO's short 3 year binge.
The debt has tripled and unemployment has not gone down one iota.
The King still wears no clothes, and many out there continue kiss his buXX.
What we have now is "Hope for Change."
When the F**K will people see the reality? The time for sides, Republican, Democrat, Tea Party is over. Damn it, blame, blame, blame! There is not one person out there that could give a S**T what happens to the people of this country, not one. Wall Street, Congress, our own president! It's all about power and personal gain. Our elected officials have failed us, and the killer is, we let them. The only ones left are ourselves, and all we can do is bitch about what party is to blame, it's like closing the barn door after the horses have left. For God's sake, it's pathetic, this constant bickering is doing nothing. I am not a supporter of Occupy Wall Street, but at least it was people coming together for a common cause. We have a voice, if united, we have nothing divided. I personally, will not vote, I will not subscribe to the lies and manipulation. One voice, my own may not be heard, but enough, will be. Let them know how you feel, don't let them back into office!
Did the author of this story ask the owners of the stocks why they sold them? The answer is NO! So how does the Corporate Media determine the reasons a person sold their stocks?
Did I read this right? Bank of America is now a aluminum maker? What else will they get blamed for next?
It doesn’t matter who’s in the White House. Go ahead and vote the incumbent out of office and everything will remain the same. The United States is in line to get our country foreclosed upon, just like what’s happening to the European countries.
I think most people have figured out that Wall Street is one of the most corrupt and ethically deprived institutions on our planet. I think most people also know the media is bought and sold just like most politicians. We also know that Wall Street is one of many tools of the elite but not the main tool. What is very clear is that our financial system has an architect and carefully designed plan that is playing itself out in Europe.
The International Monetary Fund (IMF) is very brazen in its fear mongering that we have lost a decade economically. Especially since the IMF has been one of the biggest contributors to perpetuating the instability of the European crisis. The dominoes are beginning to fall in what is an orchestrated attempt by the banksters to consolidate Europe and eventually the rest of the world’s economies under one umbrella that is to be controlled by those that have always controlled currency and money. The most egregious aspect of this contrived extortion is that they are blaming the people who are the backbone of any economy instead of their greedy corrupt political and business leaders.
George Papandreou was pressured to quit because he lapsed into a morally and ethical responsible position by trying to give the people of Greece a say in their economic future through a referendum. This vote would have given the Greek people the choice to stay in the Euro zone and allow their country to be foreclosed upon by the banksters or leave the Euro regain their sovereignty and coin their own currency once again. The IMF bullied the smallest country as a litmus test for what is going to be a much more challenging foreclosure process when it comes to the larger economies. Italy is now in the cross hairs. This dilemma you are watching unfold goes to the core of the rotten apple that is the world’s financial system.
Folks, you are witnessing the death throes of a corrupt financial system where the stock markets and the fractional reserve banking system are at its core. The volatility in the stock markets are a microcosm of the greed, theft and corruption that has perpetrated all aspects of our and other countries economic systems. In the United States, It doesn’t matter who’s in office. Our political system has turned into a two headed one party system with both parties serving their masters, Wall Street and the banksters/Federal Reserve. The stock market is just another ponzi scheme whose intent is to fleece the gullible at the bottom of the pyramid. The stock market is a rogue element of a financial system that is meant to funnel the wealth to the elite/banksters who soicopathically control our financial lives. It is reaching a point where there is nothing to take anymore from the 99% of the world. The banksters would separate you from your rainy day fund if they could gain access to your shoe box or secret compartment in your purse or wallet. The stock market isn’t the main problem; it’s the fractional reserve banking system that has set the foundation for outright theft. We are experiencing the biggest bank and investment robbery in history and the banks and financial institutions are doing the robbing. When you blame one political party or another they have you right where they want you, in fear, divided and distracted to the theft that is going on right in front of your eyes each and every second of the day.
When you have people on Wall Street day trading and speculating making half a million dollars a year in their twenties betting on people being foreclosed on, you need to ask yourself what is the true purpose of our banking system? At the moment it is largely a theft on the American public. MF Global and Corzine knows this and knows that nobody with his connections have served any time for stealing the investor’s money. The financial system’s main mission should be to allocate capital to areas of greatest growth in the real world economy. Yet they allow all kinds of broker speculation and financial gimmicks such as the derivative markets which are based on non-realistic side bets which are now in the quadrillions. The derivatives market was illegal for most of the 20th century.
The European banking crisis is a prime example of what is going to happen to all economies associated with stock market fraud and the Federal Reserve banking system. The financial strife in Greece is the model that will befall most countries. Greece is but a symptom of a cancer that has attached itself to the world’s economies. The Federal Reserve (which is neither federal nor a reserve) has been creating money (monopoly money) out of thin air and charging interest on it insuring a debtor economy for anyone who chooses or is forced to get involved with the Federal Reserve and their fractional reserve banking system. That is why this whole European or any countries current debt crisis will never be resolved and will be preyed upon by the stock market vultures. The Federal Reserve System is designed to cause economies to fail.
If someone loans you two dollars to run your economy and expects three back for the loan and interest how are you going to pay the third back? You can’t unless you borrow more dollars which puts you in perpetual debt and in a constant borrowing cycle to pay off the debt. This is designed not accidental.
Here’s the kicker, once the Federal Reserve/banksters have you struggling to pay off your interest, they send in their loan sharks the International Monetary Fund (IMF). The IMF will loan you money to cover your ever burdening interest payments but they attach a provision that if you default, you will have to give them your assets in what they call privatization (foreclosure).
Since the interest is exponential, you will default and the banksters will come in and try to foreclose on your country, like Greece. They are being told to sell off their own country to pay back the people who caused the mess to begin with. This allows the elite to steal your intrinsic valuable assets because they gave you paper (loans/debt) and the interest on the debt that is systematically impossible to pay back. This also allows the parasitic stock speculators to profit from this designed theft. They not only know the outcome of an economy, they can gamble on the economic bubbles at the investor’s expense. This cancer goes all the way down the food chain.
In the United States case, it doesn’t have to be that way. In our constitution, in Article 1, Section 8, it stipulates that we can “coin money” as a nation and avoid the Federal Reserve’s interest (fee charged on loans) black hole.
So don’t be fooled that the Europeans have come to grips with their financial debt, it’s impossible, it’s a virus that has spread around the globe. Hopefully the Greek people will get their referendum so the Peter Principal will kick in for the Federal Reserve. The stock market vultures will continue to contrive “financial instruments” (credit default swaps/credit derivatives) to defraud the people of the world.
Banks, Central banks, World Bank, IMF = Federal Reserve = Debtor economies, Debtor Nations (economic slaves) and carrion for the stock market derivative heist.
Don't blame HP as a whole for the fan blade being backwards.When I worked for IBM and did " Out Of Box Inspection " ,it was fairly common for the fan grill to be attached backwards keeping the fan blades from turning. The QC/QA management is to blame for many mishaps with American manufacturing.
Note that it is the Socialist Countries, particularly in Europe who are driving the world financial system to ruin. As Obama and the Democrats drive American towards European Socialism,,, it will collapse our economy as well.
Socialism does Not Work. Obama is a Socialist and an Elitist as well. How did people vote for a man with No Experience doing anything ?
The bill is coming due rapidly on the 2008 election of a man with almost no known past. Harry Reid is a joke, Tim Geightner is a Tax Cheat, and Eric Holder is Incompentent.
The National Media covers all this up every day, but people should be smart enough to realize we are going where Greece is today as well as Italy and Spain .
If you want to preserve America as we have known and enjoyed it, you better say no to the Democratic party which has been Hijacked by the Liberal Progressives and really have our country headed not to Socialism ,, but Communism.
Impeach Obama.
Tell that to the Chinese...
The Greedy Dirt Bags at the IMF and Federal Reserve can Hide, but they can't Run from the MESS they've created. Their days of controlling things are coming to an End. There is ONE Greater Who watches every move they make. Keep Printing Guys, until Everyone has their Share. It's only Paper.
When you decide to worry about everything in the world you will never experience a good day!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Wow you are right, just thinking about it. But you DO have to be aware and prepare. I guess there is a difference is there not?