EconomicCrisis.US

U.S. stocks retreated, extending the longest decline since 1978 for the Dow Jones Industrial Average, as concern the economy is slowing overshadowed the cheapest equity valuations in more than a year.

Caterpillar Inc. and Dow Chemical Co. slumped 2.6 percent, pacing declines among companies most-tied to the economy, as a report showed that service industries expanded less than forecast. Chevron Corp. and Occidental Petroleum Corp. dropped more than 2.3 percent as oil tumbled following a government report showing an increase in inventories. MasterCard Inc., the second-biggest payments network, advanced 8.1 percent after profit rose 33 percent as customers’ spending increased.
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Businesses in the U.S. unexpectedly expanded at a faster pace in June and consumer confidence reached a 10-week high, signs that economic growth may pick up in the second half of the year.

The Institute for Supply Management-Chicago Inc.’s business barometer climbed to 61.1, exceeding the highest forecast in a Bloomberg News survey, from 56.6 in May. Readings greater than 50 signal expansion. The Bloomberg Consumer Comfort Index rose to minus 43.9 from minus 44.9.

Stocks climbed for a fourth day as the Chicago group’s figures indicated manufacturing is rebounding after a lull brought on by parts shortages tied to the March earthquake in Japan. The data underscore the view of Federal Reserve policy makers that the first-half slowdown will prove “temporary,” as fuel prices become less of a burden for companies and consumers.
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Consumer spending in the U.S. rose more than forecast in February as incomes climbed, helping to bolster the expansion in the world’s largest economy.

Purchases increased 0.7 percent, the most since October, after advancing 0.3 percent the prior month, Commerce Department figures showed today in Washington. Incomes increased 0.3 percent, less than projected, and the Federal Reserve’s preferred measure of inflation accelerated.

The U.S. added jobs for the sixth consecutive month in February and the unemployment rate fell to the lowest level since April 2009, helping cushion Americans from higher food and fuel prices. Spending is contributing to the recovery, which Fed policy makers say is on a “firmer footing.”
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Consumer sentiment in the U.S. dropped more than forecast in March, damped by higher gasoline costs and the effects of Japan’s natural disaster.

The Thomson Reuters/University of Michigan final index of consumer sentiment decreased to 67.5, the lowest level since November 2009, from 77.5 in February, the group said today. The median forecast of 67 economists surveyed by Bloomberg News projected a reading of 68.

Gasoline prices hovering near the highest levels since October 2008 are straining the finances of American households, whose spending makes up about 70 percent of the world’s largest economy. While unemployment has fallen for three months, Japan’s earthquake crisis led to a plunge in stock values, at one point wiping out all of 2011’s gains.
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