Stocks Fell on Chicago PMI
U.S. stocks began lower and escalated in early trading on Friday after the report of a contraction in business activity in the Chicago-area in September and ahead of U.S. confidence data. The Dow Jones Industrial Average lately fell 110.14 points to 13,375.83. The S&P 500 index lost 10.74 points to 1,436.41. The Nasdaq Composite fell 21.31 points to 3,115.29.
The MNI Chicago Report said its purchasing managers’ index fell to 49.7 in September from 53.0 in August. Any reading below 50 indicates contraction. This is the lowest level in three years. The size of the decline was unexpected. Economists had expected only a small decline.
Americans boosted their spending in August even though their income barely grew. Much of the spending increase went to pay higher gas prices, which may have forced consumers to cut back elsewhere. The Commerce Department said Friday that consumer spending rose 0.5 percent in August from July. It was the biggest jump since February.
Bank of America says it has agreed to pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch at the height of the financial crisis.
Groupon Inc (GRPN.O), the world’s largest online daily deals provider, is reshuffling senior management roles in an attempt to fix its struggling European business — a shake-up that will also include the departure of its chief of international business. According to an internal memo obtained by Reuters, Chris Muhr, SVP of sales, will now head the Europe, Middle East and Africa region, while Veit Dengler, SVP International, will be leaving the company.
The U.S. Postal Service, on the brink of default on a second multibillion-dollar payment it can’t afford to pay, is sounding a new cautionary note that having squeezed out all the cost savings within its power, the mail agency’s viability now lies almost entirely with Congress.
Walgreen Co.’s (WAG) fiscal fourth quarter net income tumbled 55 percent compared to a year ago when the drugstore operator recorded a big business sale gain. Its adjusted earnings still trumped Wall Street expectations. Walgreen earned $353 million, or 39 per share, in this year’s quarter. That compares to $792 million, or 87 cents per share, a year ago. Revenue fell 5 percent to $17.1 billion from $18 billion a year ago.