Issue link: https://www.epageflip.net/i/39817
10B Daily News – Saturday, August 20, 2011 MON.-FRI. 9:00-5:30 • SAT. 9:00 -5:00 • CLOSED SUNDAYS FURNITURE DEPOT MATTRESS NORTH VALLEY NEW YORK (AP) — A growing belief that the U.S. economy may be headed toward recession gave the stock market its fourth straight week of losses. The anxiety in the market MON.-THURS. 9:00-6:00 • FRI. 9:00-7:00 • SAT. 9:00-5:00 • SUN. 11:00-5:00 235 So. Main St., Red Bluff 527-1657 632 Main St., Red Bluff 527-5837 was obvious Friday as the major indexes went from moderate gains early in the day to another sharp loss. The Dow Jones industrial average had its 10th move of more than 100 points in 15 trading days this month. ''We just don't know whether we're going to have a recession,'' said John Burke, head of Burke Finan- cial Strategies. There was little news to help investors determine their next moves. However, JPMorgan Chase & Co. joined other financial firms and cut its forecast for eco- nomic growth during the fourth quarter. It's now pre- dicting growth at annual rate of just 1 percent, down from an earlier forecast of 2.5 per- cent. That added to the recession fears. Investors disliked the news late Thurs- day that Hewlett-Packard Co. is planning to exit most of its consumer businesses, including PCs. HP fell 20 percent to a six-year low. HP plans to transform itself into a company that caters to cor- porations. After the market rose early, some investors sold in case bad news comes out of Europe over the weekend. European investors were also cautious — banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks' potential losses on bonds issued by heavily indebted governments. ''These things usually break out over the weekend and then you have a mad dash Monday to react to them,'' said Mike McGer- vey, the head of McGervey Wealth Management. The drop late in the day recalled the 2008 financial crisis. Then, many investors stepped up their selling in the afternoon out of fears about news that might break overnight — or on week- ends. Lehman Brothers failed on Sunday, Sept. 15. The government took over mortgage companies Fannie Mae and Freddie Mac the previous weekend. The Dow lost 172.93, or 1.6 percent, and closed at 10,817.65. It was down 4 percent for the week. Since July 21 — four weeks and one day — the Dow is down 15 percent. Companies that rely on an expanding econo- my for higher revenue fell. Caterpillar Inc., Internation- al Business Machines and Alcoa Inc. each fell more than 2 percent. The Standard & Poor's 500 stock index fell 17.12, or 1.5 percent, to 1,123.53. It was down 4.7 percent for the week. All 10 industry groups that make up the index fell. The Nasdaq composite fell 38.59, or 1.6 percent, to 2,341.84. It was down 6.6 percent for the week. Although stocks fell, OPEN HOUSE "Best Home. Best Prices." Saturday, August 20th 11am to 3pm Come in and meet our new manager, John Teitsort Factory Representative will be on site Children's entertainment room while you browse through our large inventory of new homes. Giveaways on all new home purchases made on August 20, 2011 Trade-ins welcomed and wanted Live Music, Food Drinks 530 529-2191 26 Sale Lane, Red Bluff, CA investors did not continue pushing the price of Trea- surys, as they have the last three weeks. The yield on the benchmark 10-year Treasury note was almost unchanged at 2.07 percent, compared with late Thurs- day's 2.06 percent. It had been up to 2.11 percent ear- lier in the day. The yield fell below 2 percent Thursday for the first time as heavy demand sent its price sharply higher. Investors began the week confident after last week's volatility, the worst the market has had since the 2008 financial cri- sis. The Dow rose nearly 215 points on Monday when Google, Time Warner Cable and Cargill were among companies announc- ing multi-billion deals. The market remained relatively calm the next two days. But on Thursday, a stream of bad economic news in the U.S. combined with worries about Europe's debt prob- lems and sent the Dow plunging 419 points. Since July 21, the market has gone from one crisis to another, and the weakening U.S. economy has been at the heart of the selling. In late July, the concern was the debt debate going on in Washington. In early August, it was the down- grade of the U.S. debt rating by Standard & Poor's. Since then, worries about the impact of the downgrade have faded, and growing evidence that the economy is slowing has driven stocks Mattress Sets & Adjustable Bed down. Financing & Delivery Available • FREE pillows • FREE delivery • FREE disposal With purchase of Tempurpedic mattress sets only. Stocks fall as traders worry over weekend Wall Street Signs of a slower economy around the world have only made investors more pessimistic about the U.S. Earlier this week, Ger- many said its economy grew just 0.1 percent in the sec- ond quarter. And Germany is the strongest economy in Europe. Stocks fell Thurs- day on news of another drop in home sales, weaker man- ufacturing in the mid- Atlantic states and an increase in the number of people who applied for unemployment benefits. The stock market tends to reflect the expectations that investors have for the economy and company earnings six to nine months in the future. So traders are interpreting the numbers they're seeing as part of a slide in the economy that will continue for some time. A recession is generally thought of as two consecu- tive quarters in which the economy contracts, as mea- sured by a country's gross domestic product. With expectations of growth in the U.S. already low, investors worry that the economy can't withstand another unexpected event like the earthquake in Japan or the string of bad weather that ravaged the South earli- er this year. JPMorgan analyst Michael Feroli said business confidence, household wealth and global growth all look worse than just a few weeks ago. He expects eco- nomic growth to be nearly flat into the first quarter of 2012. Next week is likely to bring more volatility. On Friday, the government will give its second estimate of how the economy did dur- ing the second quarter. It said a month ago that the GDP grew at an annual rate of just 1.3 percent during the quarter. Economists expect the government to announce a lower reading: 1.1 percent. The GDP report July 29 contributed to the market's heavy losses. So did the government's revised esti- mate for the first quarter: 0.4 percent. Next Friday also brings the Federal Reserve's annu- al retreat at Jackson Hole, Wyo. It was a year ago at Jackson Hole that Fed Chairman Ben Bernanke hinted that the central bank would begin buying $600 billion in Treasury securities to stimulate the economy. The buying ended June 30. Now investors want to know if the Fed will act again. But some analysts think that the U.S. economy will continue to grow on its own, although slowly. ANNIVERSARY www.redbluffgoldexchange.com 17th Sept. 1st - 17th Gold Exchange 413 Walnut Street Red Bluff 528-8000 RED BLUFF COLLISION ✪Windshield Replacement $ starting at 200 ✪ Auto Detailing $ 50 off your 1st visit FREE Estimates 530.527.6160 915 Madison St., Red Bluff