Stocks Fall Worldwide: Bloomberg
“The bear market has only begun,” Robert Prechter, the founder of Gainesville, Georgia-based Elliott Wave International Inc. who predicted the 1987 stock market crash, said on Bloomberg Radio. “I don’t see the clear weather yet.”
Manufacturing Slump Persists: Bloomberg
March 2 (Bloomberg) — The recession in U.S. manufacturing persisted for a 13th month in February as sales dropped worldwide and factories cut jobs at the fastest pace on record.
The Institute for Supply Management’s factory index was 35.8, compared with 35.6 in January. Readings less than 50 signal a contraction. Other reports showed consumer spending rose in January with a spurt of post-holiday discounts, and construction dropped more than twice as much as anticipated.
Dow Drops Below 7k: NYT
“Another day, another 200 points,” David Dietze, chief investment strategist at Point View Financial Services, said, comparing the daily markets to water torture.
The decision by many companies to trim dividends — one of the incentives for owning stocks — was contributing to the sell-off, Mr. Dietze said. Earlier Monday, the large regional bank PNC Financial Services Group cut its dividend 85 percent and the International Paper Company cut its by 90 percent. Last week, the General Electric cut its dividend 68 percent, and JPMorgan Chase reduced its dividend 87 percent.
Looking ahead, he said: “All eyes are on that Friday unemployment report.”
In the government report, consumer spending rose in January pushed higher by purchases of food and other nondurable items. But the increase is expected to be fleeting given all the problems facing the economy.
The Commerce Department said Monday that consumer spending rose 0.6 percent in January, even better than the 0.4 percent gain that economists expected.
Personal incomes rose 0.4 percent in January, partly reflecting the cost-of-living adjustments provided to millions of Social Security recipients. Still, that was better than the 0.2 percent decline economists expected.
The personal savings rate surged to 5 percent, the highest level since 1995 as consumers continued to save more of their incomes amid the deepening recession.