U.S. markets becalmed by reports
NEW YORK, Aug. 9 (UPI) -- The second trading week of the month opened flat in New York Monday after an opening week that was book-ended by by disappointing economic reports.
The Commerce Department said Tuesday consumer spending was unchanged from May to June. On Friday, the Labor Department said the unemployment rate was unchanged at 9.5 percent.
Both reports indicated the economic recovery had stalled.
In late morning trading Monday, the Dow Jones industrial average added 30.28 points, 0.28 percent, to 10,683.80. The Standard & Poor's 500 index lost 3.28 points, less than 0.29 percent, to 1,12492. The Nasdaq composite index added 0.41 percent, 9.41, to 2,297.88.
The benchmark 10-year U.S. Treasury note fell 2/32 to yield 2.827 percent.
The euro fell to $1.3241 from Friday's $1.2293. Against the yen, the dollar rose to 85.69 yen from Friday's 85.39 yen.
In Tokyo, the Nikkei 225 index lost 0.72 percent, 69.63, to 9,572.49.
Rumors aside, corporations are doing well
NEW YORK, Aug. 9 (UPI) -- The economic recovery has done well by U.S. corporations, but the gains have not seeped into the labor market, records show.
The St. Louise Federal Reserve said first quarter corporate profits hit a record of $1.37 trillion, The Washington Post reported Monday.
Businesses, which have increased their spending 20 percent in the second quarter, are also holding onto $2 trillion in cash, the newspaper said.
However, ""If you're running a business, you can't start hiring on speculation. You have to wait until you see market signals that things are getting better. The smart businesses are looking for the early signs so they get the first advantage. They're ready to move," said IHS Global Insight Chairman Joseph Kasputys.
For many corporations that means some else has to make the first move, which is generally smaller businesses, analysts said.
For large companies, an improvement in the economy is signaled by a drop in the unemployment rate, which puts cash back in the hands of consumers. On the other hand, unemployment cannot drop until corporations begin hiring.
Economist Carmen Reinhart, co-author of "This Time is Different: Eight Centuries of Financial Folly," said the recovery is on track, but that track requires patience.
"If you look at the big, historic panorama, deleveraging takes time. It's not pretty. That's not the answer people want to hear, but these (recoveries) are lengthy," Reinhart said.
Winn-Dixie hit by downturn and discounters
JACKSONVILLE, Fla., Aug. 9 (UPI) -- U.S. retail analysts said grocery chain Winn-Dixie was likely in trouble, besieged by discounters on one side and a poor economy on the other.
Market analyst Scott Mushkin at Jefferies & Co. said, "The future's not so great" for the retailer that is banking on store-remodeling to help pull it out of a slump, the Orlando Sentinel reported Monday.
"I've always said … that the issues around Winn-Dixie were an issue with the brand and the fact that the brand had been tarnished. And I've always said that the more you grow the base of remodeled stores, the more word is going to get out that Winn-Dixie is a place to shop," Chairman and Chief Executive Officer Peter Lynch said in a conference call earlier this year.
But Mushkin said the 6 percent sales increase at remodeled stores was, "not enough to really change things."
Winn-Dixie announced last week it would close 30 stores in its core region, the southeastern United States.
"I think they may have known for some time there were going to be some stores that weren't going to be worth the investment," said Mark Hamstra, an editor at Supermarket News.
Winn-Dixie's troubles are, in part, a continuation of its 2005 bankruptcy. Some of its stores "fell into disrepair," the newspaper said.
At the same time, competitors with discount prices, such as Target and Walmart, began to expand their grocery businesses, cutting into Winn-Dixie's market share.
Sara Lee CEO to step down
NEW YORK, Aug. 9 (UPI) -- U.S. food giant Sara Lee Corp. has announced its chief executive officer, Brenda Barnes, will resign due to health reasons.
Barnes suffered a stroke in May and has been on an extended leave of absence, CNNMoney.com reported Monday.
James Crown, interim chairman of the board, said in a statement, "We fully support Brenda's decision to step down as chairman and CEO so she can devote all of her time and energy toward improving her health."
The company said it was looking for a replacement for Barnes, the company's CEO for six years. She was once listed as the 10th most powerful woman in the country by Fortune Magazine.
