Retail Sales Fall For The First Time In 10 Month And The Market Opens Up 94 Pts?.

Posted: June 14, 2011 in News, Opinion
Tags: ,

WASHINGTON – Americans bought fewer cars in May, pulling retail sales down for the first time in nearly a year.

Sales among U.S. retailers fell 0.2 percent last month, the Commerce Department said. It was the first decline after 10 straight increases.

Auto sales dropped 2.9 percent, the largest decline since February 2010. But excluding the weak car sales, retail sales rose 0.3 percent.

The slump in retail sales was the latest report signaling that the economy has lost momentum. Consumers are struggling to deal with high gasoline prices and a slowdown in hiring. While the surge in gas prices eased in May, pump prices are still significantly higher than a year ago.  More on this after the jump –>[Retail sales fell for first time in 10 months]

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NEW YORK – Stocks are opening higher following a better-than-expected report on retail sales.

The government said Tuesday that retail sales edged down 0.2 percent last month, the first decline in nearly a year. That was slightly better than analysts were expecting.

Americans bought fewer cars as a result of supply chain disruptions caused by the earthquake and tsunami disaster in Japan.

Wholesale prices also rose by the smallest amount in 10 months in May as food costs fell and gas prices edged up only slightly.

At the opening, the Dow Jones industrial average is up 94 points, or 0.8 percent, at 12,046. The Standard & Poor’s 500 is up 11, or 0.8 percent, at 1,283. The Nasdaq composite is up 26, or 1 percent, at 2,667. [Stocks rise on stronger-than-expected retail sales]

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NEW YORK – More than half of the chief executives of large U.S. companies say they expect to spend and hire more over the next six months despite slower economic growth.

The Business Roundtable says 51 percent of CEOs polled expect to increase hiring. Last quarter’s level of 52 percent had been the highest since the trade group began surveying its members in 2002.

More than 60 percent plan to buy more goods such as computers, software and machinery.

Most CEOs seem confident about their own company’s prospects — nearly 90 percent forecast higher sales. But they expect the economy to grow a modest 2.8 percent in 2011, down from an earlier forecast of 2.9 percent.

Business Roundtable represents CEOs from the nation’s 200 largest companies.

The poll, from May 16-June 3, received 135 responses. [Survey: CEOs expect hiring, spending to grow]

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MY CONCLUSIONS:

Over all this is a confusing bunch of information and gives us a few great insights into our economy and how the market reacts.

First of all because the bad news wasn’t SO BAD it actually becomes good news. Because they were expecting a greater drop in retail sales than what we actually experienced the market reacted as if it was positive news.  I disagree.  If we experienced the first drop in retail sales in 10 months that means the economy is slowing down, this is not good news for the long run, maybe for today but i predict the market sliding again before this week is over.

Secondly, do the CEO even know what they are talking about. After the survey i question even more if any of the CEO surveyed are qualified to do their jobs.  I don’t know how they can predict the increase in jobs and spending while a decrease in sales is being realized.  The only thing i can think is that their reaction is so delayed to the economy that they will be hiring new people as we enter the double dip before they even realize the economy is on its way back down.

Finally, my favorite comment on these stories comes from Greybeard Tue Mar 08, 2011 06:43 pm PST

Who says “Smoke and Mirrors…….” Which in this case might be the best explanation as to what is really going on with these stories.

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