Wall Street drops along with consumer confidence
U.S.stocks suffered their biggest one-day decline in nearly three weeks on Tuesday after a sharp drop in consumer confidence heightened worries over one of the most vulnerable areas of the economy.
Consumer confidence in February slumped to a 10-month low as the short-term outlook on jobs worsened. Results from retailers added little hope, as bellwethers like Target Corp (NYSE:TGT – News) forecast a tepid performance in the first quarter.
“There’s a bit of an adjustment process in terms of the growth outlook as to what is going to be the major driver,” said Nick Kalivas, vice president of financial research & senior equity index analyst at MF Global in Chicago.
If “the economic outlook gets adjusted down, certainly the materials and semis would be the places to see selling,” he said. [Read the full article]
The president of Toyota’s U.S. operations acknowledged to skeptical lawmakers on Tuesday that the company’s recalls of millions of its cars may “not totally” solve the problem of sudden and dangerous acceleration.
Toyota’s James Lentz told a congressional panel that the company would be “vigilant” in looking for potential causes. However, he repeated his company’s position that unexpected acceleration in some of the company’s most popular cars and trucks was caused by one of two problems — misplaced floor mats and sticking accelerator pedals.
He insisted electronic systems connected to the gas pedal and fuel line did not contribute to the problem, drawing sharp criticism from lawmakers who said such a possibility should be further explored — and from a tearful woman driver who could not stop her runaway Lexus. [Read the full article]
Stocks that moved substantially or traded heavily Tuesday on the New York Stock Exchange and Nasdaq Stock Market:
The Dallas-based hospital operator reported lower-than-expected adjusted earnings for the fourth quarter.
The mortgage insurer posted a narrower loss as it reduced exposure to risky investments, while derivatives it holds turned positive.
The office supplies retailer narrowed its loss compared with a year-earlier period hurt by writedowns and higher interest payments.
Private equity firm Apollo Management has reportedly submitted a proposal to buy a stake in the struggling jewelry chain.
Lean inventory and strong holiday sales helped Target’s profit soar, and the company said it expects to pick up market share this year.
The online travel site reported a fourth-quarter loss as it recorded a higher tax provision during the period.
Cost-cutting and stronger sales drove fiscal fourth-quarter profit higher, the largest U.S. [Read the full article]
The Obama administration said on Tuesday it is still committed to the “Volcker rule” to ban risky trading by banks, although Congress looks increasingly unlikely to adopt the rule as proposed.
The White House’s forceful support for the rule came after the Treasury Department said earlier in the day that it backed “mandatory limits” on banks trading for their own account.
President Barack Obama had originally framed the proposed Volcker rule on January 21 as an outright ban, which stunned markets and complicated extended negotiations in Congress over legislation to tighten bank and capital market regulation.
“We’re not walking away from and we’re not watering down that proposal one bit,” White House spokesman Robert Gibbs told reporters when asked about the outlook for the rule authored chiefly by White House economic adviser Paul Volcker.
“We’re not walking away from what the president outlined on the Volcker rule,” Gibbs said at a briefing. [Read the full article]