More excitments in Obama's Economical Magic Show, Time to EAT GRASS!

[obama.bin.laden]

http://news.asiaone.com/News/AsiaOne+News/World/Story/A1Story20110604-282391.html

Obama warns of 'tough headwinds' for US economy
AFP
Sat, Jun 04, 2011


US President Barack Obama shops for gardening gloves for First Lady Michelle during an unannounced visit to Fred's Pro Hardware, a local family owned business.

WASHINGTON - US President Barack Obama warned Saturday that the US economy still faced "tough headwinds," as he welcomed newly created jobs in the once-troubled automobile industry.

"Even though our economy has created more than two million private sector jobs over the past 15 months and continues to grow, we're facing some tough headwinds," the president said in his weekly address.

"Lately, it's high gas prices, the earthquake in Japan and unease about the European fiscal situation."

The comments came after dismal statistics on new job creation and an uptick in the unemployment rate sent US stocks plunging Friday and raised a new barrier for Obama's troubled economic agenda.

The economy added a paltry 54,000 new jobs last month, one quarter of the February-April pace, while the unemployment rate edged up to 9.1 per cent, figures from the Labor Department showed.

While the White House and economists cautioned that the poor data was likely a monthly blip, it fueled allegations that Obama's economic policies are failing, 18 months ahead of the next presidential election.

The dire data submerged Wall Street's week in gloom, with investors fretting joblessness and other maladies will spell an extended period of slow growth.

The Dow Jones Industrial Average fell 2.3 per cent during the week, finishing at 12,151.26 points. The Nasdaq fell 2.3 per cent to 2,732.78 points and the larger S&P 500 was down by the same percentage to 1,300.16 points.

Obama used the rebound of the US car industry, after bailouts and government-managed bankruptcies taken by General Motors and Chrysler, as a symbol of his wider economic policy and to repel Republican attacks.

The industry has added 115,000 jobs since GM and Chrysler exited bankruptcy and, along with Ford, are now churning out profits and popular new energy efficient models.

The president noted that all three American automakers were now adding shifts and creating jobs at the strongest rate since the 1990s.

"Chrysler has added a second shift at the Jefferson North plant in Detroit that I visited last year," he said. "GM is adding a third shift at its Hamtramck plant for the first time ever. And GM plans to hire back all of the workers they had to lay off during the recession."

Obama warned of "bumps on the road" to complete recovery, but expressed confidence that Americans will overcome these difficulties.

"We're a people who don't give up - who do big things, who shape our own destiny," he continued. "And I'm absolutely confident that if we hold on to that spirit, our best days are still ahead of us." -- AFP

 

[obama.bin.laden]

http://www.bloomberg.com/news/2011-...mp-since-2004-amid-concern-about-economy.html

Dow Average Has Its Longest Weekly Slump Since 2004
By Inyoung Hwang - Jun 4, 2011 12:00 PM GMT+0800

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US STOCKS

Traders work on the floor of the New York Stock Exchange in New York, U.S., on Monday, May 23, 2011. Photographer: Jin Lee/Bloomberg

U.S. stocks fell this week, sending the Dow Jones Industrial Average to its longest streak of losses since 2004, after worse-than-estimated reports on jobs and manufacturing fueled concern earnings growth will slow.

All 10 Standard & Poor’s 500 Index groups dropped, with declines exceeding 1.3 percent. Newell Rubbermaid Inc. (NWL) sank 15 percent, leading declines in the Standard & Poor’s 500 Index, after cutting its profit forecast. J.C. Penney Co. and Stanley Black & Decker Inc. (SWK) slumped more than 6 percent as investors sold companies tied to economic growth. General Motors Co. (GM) and Ford Motor Co. (F) decreased at least 4 percent after sales growth missed projections.

The S&P 500 lost 2.3 percent to 1,300.16, the biggest weekly decline since August. Its five-week losing streak is the longest since 2008 and puts the index at its lowest level since March. The Dow fell 290.32 points, or 2.3 percent, to 12,151.26, also posting a fifth-straight weekly slump.

“It was a C-minus week for the economy,” said David Sowerby, a Bloomfield Hills, Michigan-based money manager at Loomis Sayles & Co., which oversees more than $150 billion. “These are the kind of weeks that remind investors stocks don’t just go straight up. There was enough data this week to begin to connect the dots that uncertainty remains.”

The S&P 500 has retreated 4.7 percent since closing at an almost-three-year high of 1,363.61 on April 29. The Citigroup Economic Surprise Index for the U.S. has sunk to minus 117.20, meaning reports are missing projections by the most since January 2009, two months before the S&P 500 tumbled to the lowest level in 12 years.
Payrolls Report

Labor Department figures showed payrolls increased by 54,000 last month, falling short of the median forecast in a Bloomberg News survey that called for a rise of 165,000. The jobless rate climbed to 9.1 percent.

Michael Shaoul, whose Marketfield Fund Ltd. beat 81 percent of competitors last year, said that while the payrolls report was disappointing, it may also be a signal the slowdown in the economic data is near its peak. Private-sector hiring has risen by an average 145,000 a month over the last year, faster than economists had predicted, according to Shaoul. He noted that weaker nonfarm payrolls reports in February and July 2004 failed to derail the last bull market, which peaked in October 2007.
‘Significantly Lower’

“What the data will do, however, is accelerate the process of economic revision, with estimates of U.S. growth being forced significantly lower across the board,” Shaoul wrote in a note to clients. “As damaging as the process may be for asset values, it has surprisingly little to do with the actual ability of corporations to generate revenue.”

The biggest decline in the S&P 500 since August is creating a buying opportunity for investors, according to Blackstone Group LP’s Byron Wien. The price-to-earnings ratio for the S&P 500 has fallen close to its lowest level in 2011, according to Bloomberg data. The index currently trades at 14.8 times earnings, near this year’s low of 14.7 when it fell in March after Japan’s earthquake.

“Investors should be looking for buying opportunities,” said Wien, the vice chairman of Blackstone Advisory Partners, whose parent, New York-based Blackstone Group LP, is the world’s largest private-equity firm. “The economy is not as bad as it looks right now. Corporate profits will be good, very good. People are asking me, ‘Do you still think the market can get to 1,500 by the end of the year?’ I do.”
Jobs Data

The S&P 500 tumbled the most since August on June 1, following an ADP Employer Services’ jobs report that trailed estimates and data from the Institute for Supply Management that showed manufacturing expanding at the lowest pace in more than a year. A separate report this week showed that more Americans than forecast filed applications for unemployment benefits.

Newell Rubbermaid declined 15 percent to $14.97, the biggest retreat in the S&P 500. The maker of Sharpie pens and Rubbermaid containers cut its full-year profit forecast, saying economic woes are hampering consumer spending.

J.C. Penney declined 10 percent to $32.26 and Stanley Black & Decker retreated 6.1 percent to $68.93. The Morgan Stanley Cyclical Index sank 3.9 percent this week, while the S&P 500 Consumer Discretionary and Materials Indexes led losses in the S&P 500, declining 3.2 percent each.
Limited, Gap

Limited Brands Inc. and Gap Inc. (GPS) reported May sales this week that trailed analysts’ projections as increasing prices and surging gasoline costs deterred budget-conscious shoppers. Limited fell 4.9 percent to $37.44. Gap lost 6.7 percent to $17.92.

Auto companies also fell after sales last month missed analysts’ estimates on higher gasoline prices. GM dropped 6.9 percent to $29.12 this week, while Ford slumped 4 percent to $14.01. GM deliveries declined 1.2 percent to 221,192 vehicles, the Detroit-based automaker said on June 1. The average estimate was for a 1.5 percent increase. Ford light-vehicle deliveries decreased 2.6 percent to 191,529, compared with analysts’ average estimate for a 0.5 percent decline.

“This is a confidence issue for the consumer discretionary sector,” said Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which manages $300 billion. “We’ve seen retail sales hold up reasonably well and consumers have continued to spend. This jobs report combined with the weakening trend in housing could undermine some of the support for the retailers.”
Sealed Air Falls

Sealed Air Corp. (SEE) sank 14 percent to $21.89. The maker of Cryovac food packaging, Jiffy protective mailers and medical supplies agreed to buy Diversey Holdings Inc. for $2.9 billion to add sales to emerging-market food-processors concerned about product safety. The company is handing Clayton Dubilier & Rice LLC an almost $1 billion windfall at the expense of its own shareholders by paying a 52 percent premium for Diversey, according to data compiled by Bloomberg.

Juniper Networks Inc. slid 13 percent to $32.33. The network equipment maker’s Chief Executive Officer Kevin Johnson indicated at a Bank of America Corp. conference this week that “the quarter is back-end loaded,” fanning concern that results will be worse than investors anticipated.

“We’re about to go into the pre-announcement season which, as we have seen in the economic data, is likely to be somewhat disappointing to investors,” Kleintop said. “We will hear a number of companies taking down guidance and back away from what they’ve issued previously and that could create more down draft in a June swoon for stocks.”

To contact the reporter on this story: Inyoung Hwang in New York at [email protected]

To contact the editor responsible for this story: Nick Baker at [email protected]