Aug. 1 - Summary of business headlines: The Dow slips below 13,000 as the Federal Reserve offers no new stimulus and few clues of when it will; Knight Capital spooks trading floor; monthly auto sales disappoint; Time Warner, Comcast post ad-less earnings. Conway G. Gittens reports.
The U.S. Federal Reserve does a head fake, acknowledging the economy is slowing, but offering no new tools on how to fix that. Some on Wall Street were disappointed, resulting in a stock market that ended not far from where it began. John Manley of Wells Fargo Advantage Funds explains the reaction this way: SOUNDBITE: JOHN MANLEY, CHIEF EQUITY STRATEGIST, WELLS FARGO ADVANTAGE FUNDS (ENGLISH) SAYING: "It's a classic example of 'what have you done for me lately' and I think the fact that there weren't trillions of dollars headed in our direction disappointed some people and they sold stocks they bought before - probably sold at a profit; the market pulls back and then at the end of the day, well - you know things aren't that bad; you know we are not about to fall apart right now, the economy is growing albeit slowly." Slowly indeed: private employers created 163,000 jobs in July, according to payroll company ADP; that's more than expected but not enough to bring down the unemployment rate. Manufacturing activity contracted last month, according to the Institute for Supply Management as exports continue their free-fall. And there's weakness on the local road as well; Ford, General Motors, and Chrysler all out with disappointing July sales. Shares of Knight Capital Group lost one-third of their value after the market player was the source of the latest Wall Street trading snafu. The company admitted to a technical glitch at the start of the trading day, forcing the NYSE to review trades in 140 different issues. This is another black eye for Wall Street, given the Facebook IPO mess and the May 2010 flash crash. In other corporate news: Without the magic of Harry Potter and the Deathly Hallows: Part 1 profits at Time Warner dropped and sales were below forecasts.... and despite a sinking performance of Battleship and NBC Universal as a whole, fellow media conglomerate Comcast beat earnings forecasts. Trading in Europe was mixed with the spotlight turning to the European Central Bank. Conway Gittens, Reuters