Stock Market August 2, 2011

[Patler]

The stock market isn't reacting too positively to the debt limit deal that seems to have been worked out in congress. As I type this the DOW is threatening to drop below 12000. Hopefully, 12,000 will be a psychological support level to prop it.

[MJZiggy]

People were exceptionally unhappy with how that all went down. And many are very unhappy with the deal. I can't see consumer confidence being very high right now.

[HowardRoark]

This was more important yesterday:


The ISM Manufacturing index fell to 50.9 in July from 55.3 in June, coming in well below the consensus expected decline to 54.5. (Levels higher than 50 signal expansion; levels below 50 signal contraction.)

The major measures of activity all fell in July, but most remained above 50.0, signaling growth. The supplier deliveries index slipped to 50.4 from 56.3 and the production index fell to 52.3 from 54.5. The new orders index declined to 49.2 from 51.6 and the employment index fell to 53.5 from 59.9.

[Patler]

All consumer spending indicators yesterday and today looked bad as well. However, I thought the debt ceiling issue was of enough significance that a resolution would result in a market bounce, even if temporary. But, here we are, on the day a deal is being struck, and the market has dropped rather a lot.

Seems to indicate investors have bigger concerns than the US debt ceiling.

Are we heading into the second half of a double-dip recession?

[Patler]

Dow now well-below 12,000. Will it close below? I think so. That could start a major sell-off the rest of this week.

[SkinBasket]

The deal essentially guaranteed more of the same business killing policies from this administration, except with higher bills to pay come 2013. Nothing of substance was accomplished, and no problems were actually fixed.

I think double-dip is a bit misleading. It indicates the economy actually recovered.

[Patler]

I agree the bill seems to accomplish little; however, the media would have us believe that the fear of government default was holding back the markets. Today shows that was not the case. It was a minor blip on the radar of investors.

I think the lack of consumer spending indicates the economy has not recovered, or is reverting. That and the lack of business/manufacturing growth of any type.

[Scott Campbell]

All consumer spending indicators yesterday and today looked bad as well. However, I thought the debt ceiling issue was of enough significance that a resolution would result in a market bounce, even if temporary. But, here we are, on the day a deal is being struck, and the market has dropped rather a lot.

Seems to indicate investors have bigger concerns than the US debt ceiling.

Are we heading into the second half of a double-dip recession?

I suspect it's a double-dip world wide recession.

[MJZiggy]

I can't believe you're surprised by this.

[HowardRoark]

Right at support on the S & P 500 (1264).

[Patler]

I can't believe you're surprised by this.

I'm not surprised by the state of the economy. I am a little surprised by a substantial market drop on the very day that the default "crises" was averted. The market has been erratic, and if the drop below DOW 12000 had happened last week, yesterday or next week I wouldn't have thought as much of it. It happening today is a bit odd.

[Scott Campbell]

I'm not surprised by the state of the economy. I am a little surprised by a substantial market drop on the very day that the default "crises" was averted. The market has been erratic, and if the drop below DOW 12000 had happened last week, yesterday or next week I wouldn't have thought as much of it. It happening today is a bit odd.

I was looking forward to the bump. Instead we got another kick in the nuts.

[MJZiggy]

People hated that deal from all sides of the spectrum and no one has confidence in it or in our government right now. I think they were hoping for a better deal so I'm not shocked in the least. I'd say it will be buoyed by bargain hunters, but other than that will be down about a week and will slowly regain. Like I said, if I had a job, I'd be buying.

[Scott Campbell]

I'm not nearly as optimistic. Fortune 500 countries are sitting on a trillion dollars in cash offshore. That money isn't coming back home any time soon.

[Freak Out]

There are bad numbers all around....all this is is people trying to protect wealth....it's going into cash or gold....something.