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Downbeat drumbeat dulls jovial mood

Friday, April 12, 2013 - 02:11

April 12 - Summary of business headlines: Stocks end winning streak after surprise drop in retail sales and slump in consumer sentiment revive slowdown fears; JP Morgan Chase and Wells Fargo quarterly profits hit records. J.C. Penney gets partial victory in Macy's brawl. Conway G. Gittens reports.

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Wall Street suffered its first loss of the week as another economic report casts doubt on the strength of the recovery. The losses were minimal though as investors get ready for a pick-up in earnings season. But that doesn't diminish the historic week of new closing records for the Dow and S&P 500. Retail sales surprisingly dropped last month, marking the biggest decline in nine months. Not even falling gasoline prices were enough to get consumers to spend more in March than they did in February. Cool temperatures were partly to blame but economists suspect higher payroll taxes and forced spending cuts are starting to hit home. A Thomson Reuters/University of Michigan survey showing a drop in April consumer sentiment to an eight-month low - adding to those suspicions. Economist Bob Brusca is seeing a trend in the data. SOUNDBITE: ROBERT BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "I think the economy wasn't doing quite as well in the earlier period as people thought. We've had this problem in the last couple of years, when the economy comes out January, February, and maybe March looks to be strong, and all of a sudden somebody lets the air out of the balloon. And it's happening again." Prices, however, are falling. Producer prices had their largest tumble in 10 months and that was tied to a drop in gasoline prices. On the earnings front: JP Morgan Chase - beat earnings forecasts with a record of $6.5 billion. But gains were due to less legal spending, not a major pick-up in business. CEO Jamie Dimon described loan growth as soft. Profits were also a record at Wells Fargo. And there is a - but - here too. The top home lender has seen the number of home loans decline for two quarters in a row. J.C. Penney can sell merchandise designed by Martha Stewart but the items can only be branded as "JCP Everyday" due to Martha Stewart's exclusive pact with Macy's. A small victory from a judge after a tumultuous week for JCP; its stock down more than 5 percent this week. In Europe, broad-based weakness as investors once again worry about the plan to bail out Cyprus.

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Downbeat drumbeat dulls jovial mood

Friday, April 12, 2013 - 02:11