Thursday, August 13, 2009

U.S. stock market hears weak consumer pulse in retail data

The stock market's enthusiasm over the government's "cash for clunkers" program waned Thursday in the face of data suggesting consumers exchanged old cars for newer models at the expense of other retail spending.

Investors were taken aback by the Commerce Department's report that U.S. retail sales fell 0.1% in July, as opposed to expectations sales would gain 0.8%. Excluding autos, retail sales declined 0.6% versus an expected gain of 0.1%. Read full story.

"The decline in retail sales is quite startling to say the least," Dan Greenhaus, chief economic strategist, Miller Tabak & Co., wrote in an emailed note.

"The cash for clunkers program was expected to have had quite an effect on retail sales [but] motor vehicle and parts rose only 2.4%; expectations had looked for a gain more than double," he said. (more)

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