Stocks drop as jobless claims rise unexpectedly

[Amerigo Vespucci]

Source: The Washington Post

NEW YORK -- Stocks are tumbling after two disappointing economic reports renewed investors' concerns about the pace of a recovery.

The Labor Department says claims for unemployment benefits rose unexpectedly last week and the Federal Reserve of Philadelphia said manufacturing activity in the mid-Atlantic region has dropped during August.

The pair of economic reports followed news that Intel Corp. was acquiring McAfee Inc. The deal, valued at $7.68 billion, was not enough to offset the weaker economic readings.

The Dow Jones industrial average is down 170.67, or 1.6 percent, at 10,244.87. The Standard & Poor's 500 index is down 19.91, or 1.8 percent, at 1,074.25, while the Nasdaq composite index is down 39.15, or 1.8 percent, at 2,176.55.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/08/19/AR2010081901631.html?hpid=moreheadlines

[villager]

1. why do they keep saying "unexpectedly?"

:shrug:

[OhioChick]

2. Took the words right out of my mouth. n/t

[Amerigo Vespucci]

4. Mine too. I almost didn't want to post that title, but LBN rules and all...

..."unexpectedly" my ass.

Employers are holding on to every penny like Scrooge. The more "productivity gains" they can squeeze out, the more pennies they have. The more money the government gives them in the name of hiring new employees, the more pennies they have.

Lather, rinse, repeat.

[txlibdem]

6. Holding onto their pennies

You mean like the 1.8 TRILLION DOLLARS that American businesses are holding onto instead of hiring people.

[Amerigo Vespucci]

7. I posted a story on DU the other day...

...about the $12 billion or so schools have been given by the government to hire new teachers.

The only problem is that the recipients see a deficit in 2011 and are holding on to all the money, without hiring, because they feel it is the "responsible" thing to do (rather than face "possible" layoffs in 2011).

I'm too lazy to hunt down my own thread...it's out there, less than a week ago, if anyone wants to do a search for it.

Life is a series of agreements. My feeling is that if the government gave you money to hire people and you decided that, after accepting the money, you didn't want to do that, give the money back.

It's that simple. Start hiring, or give the damned money back.

:grr:

[Psephos]

8. Consumers are also holding onto their pennies, and for the same reason.

Fear of what lies ahead.

People spend, and companies invest, based on how they feel about the future.

[txlibdem]

10. Self-fulfilling prophesy

By holding onto 1.8 Trillion Dollars (do you even know how much money that is?!?!) the businesses are guaranteeing zero economic growth.

1.8 Trillion, here's a little perspective:
1.8 thousand = 1,800
1.8 million = 1,800,000
1.8 billion = 1,800,000,000
1.8 trillion = 1,800,000,000,000

How many employees can you hire with 1.8 Trillion (excluding healthcare costs):
Note that for each employee with an annual salary of $50,000 the actual cost to a business is around $75,000 a year

So with that 1.8 Trillion, they could hire 20 million employees and pay them $60,000.

[Demeter]

3. Faith-based Economists

[raouldukelives]

5. Because expecting good things is what they do

If they were honest nobody would talk to them.

[TheWatcher]

9. Because the level of Propaganda we live under everyday has turned our country into the Soviet Union

with Better TV.

Welcome To The Land Of They Thought They Were Free.