Aug 23 - Summary of Business Headlines: Stocks fall on mixed economic data that dim hopes of quick action by the Fed, New home sales rise, Unexpected rise in jobless claims; HP weighs on tech. Carmen Roberts reports.
The tug of war between economic data and bets on more Fed stimulus swung slightly away from Federal Reserve action anytime soon. That let some of the air out of stocks which had risen 12 percent from the June low. The Dow fell 115 points or nearly one percent. The S&P 500 slipped 0.8 percent. The Nasdaq 0.7. Positive economic reports on new home sales and manufacturing growth were clouded by a rise in jobless claims and signs global growth is sputtering. The number of Americans filing for first time unemployment benefits unexpectedly rose last week, suggesting the economy is not growing enough to create the jobs needed. New home sales rose more than expected in July, matching a two-year high, but prices fell. Still housing shows signs of a budding recovery with new home sales up 25 percent from a year ago. That's a signal for builders to start more construction, according to Jed Kolko, Chief Economist for Trulia. SOUNDBITE: JED KOLKO, CHIEF ECONOMIST, TRULIA (ENGLISH) SAYING: "Construction is maybe a quarter or a third of the way back to normal across the country. In some local markets construction is all the way back up to normal levels. In places like San Jose, Boston and parts of Texas construction now is where it's been on average for the past 20 years." Hewlett-Packard weighed on tech stocks after a group of brokerages cut their price targets a day after the world's largest PC maker posted a nearly $9 billion loss and cut its earnings outlook. And Big Lots shares tumbled after it reported disappointing earnings and cut its full-year profit forecast. In Europe, stocks ended lower as data from China and the euro zone fueled jitters that global growth may stall. Carmen Roberts, Reuters.