Investors got a bit more serious in their selling yesterday, pushing the Dow Industrials down more than 100 points. Seems the mess in Europe -- angry mobs in Spain and Greece -- refocused attention on the difficulty the region has in approving austerity programs to deal with the economic crisis. Problems in the euro region had slipped to the back burner but never really went away.
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The markets were also rattled by comments from Charles Plosser, president of the Federal Reserve Bank of Philadelphia. He said, "We are unlikely to see much benefit to growth or employment from further purchases," a reference to the latest announcement from Ben Bernanke saying the Fed will buy up to $40 billion a month in long-term mortgage-backed securities to drive down rates and encourage consumer and business borrowing.
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The Commerce Department reported this morning the biggest one-month jump in new home prices in history. It said the median sales price of a new home rose 11.2 percent to $256,900 in August. Sales, however, were down slightly due to weakness in the South, which was battered by tropical storms and other weather conditions.
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Yesterday the Conference Board reported a huge spike in its consumer confidence index and today the Consumer Electronic Association said consumer confidence to spend on technology rose to its highest September level ever and the fifth highest level ever for any single-month period. "This month's measure of sentiment is at levels typically only seen during the height of the holiday buying season, an indication that consumers are likely to buy and spend more on tech in the weeks ahead," said chief economist Shawn DuBravac. The CEA said consumer sentiment toward the overall economy also rose in September as "an improved stock market and an increase in housing prices has consumers feeling more confident about their financial future."
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That confidence has people ready to dig a lot deeper for the next holiday. The National Retail Federation is predicting consumers will spend up to $8 billion to celebrate Halloween this year, up sharply from $6.8 billion last year. If you have been in a grocery store or any other retail outlet you probably have noticed the stores are already completely decked out for the spooky festivities because they know "when it comes to Halloween, new costume ideas for children, adults and pets, and the latest in home and yard decor top people's shopping lists." Could be the scariest costume this year will be to dress up like an NFL replacement referee.
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People will be busy today scraping one of the oldest names in the industry off the windows at a major brokerage firm. It was announced yesterday that Morgan Stanley Smith Barney has been renamed Morgan Stanley Wealth Management. The two firms merged three years ago and it was evident it would only be a matter of time before a change would occur. Smith Barney dates back to 1938 when two firms headed by Charles Barney and Edward Smith combined resources. Some out there may remember the commercials with the regal voice of actor John Houseman saying, "Smith Barney makes money the old-fashioned way -- they earn it."
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