Data fails to halt market correction
NEW YORK, Oct. 27 (UPI) -- Positive economic data failed to pump positive numbers on U.S. market boards Wednesday as analysts said a downward correction was about due.
Stocks have risen for two consecutive months on wobbly fundamentals. On Wednesday, the Commerce Department said new factory orders for durable goods rose 3.3 percent in September, far ahead of the consensus prediction of a 2 percent rise. Sales of new residential homes in September, up 6.6 percent from August, also beat expectations. But stocks headed lower, anyway.
In late morning trading, the Dow Jones industrial average lost 122.65 points, or 1.10 percent, to 11,046.81. The Standard & Poor's 500 index lost 10.92, or 0.92 percent, to 1,174.49. The Nasdaq composite index of tech-dominated stock lost 12.43, or 0.50 percent, to 2,484.86.
The benchmark 10-year Treasury note fell 14/32 to yield 2.68 percent.
The euro fell to $1.3779 from Tuesday's $1.3853. Against the yen, the dollar rose to 81.691 from Tuesday's 81.50.
In Japan, the Nikkei 225 index rose 0.1 percent, 9.65, to 9,387.03.
BA chief: U.S. air security needs rethink
LONDON, Oct. 27 (UPI) -- Many of the airport security measures demanded by the United States are unnecessary, British Airways' chairman told an industry group Tuesday.
Martin Broughton, speaking to the annual conference of the U.K. Airport Operators Association, said British authorities should not "kowtow to the Americans every time they want something done," the Financial Times reported.
"America does not do internally a lot of the things they demand that we do," he said. "We shouldn't stand for that. We should say we'll only do things which we consider to be essential and that you Americans also consider essential."
Other British officials, both in government and the industry, have said they are also frustrated.
Colin Matthews, head of the company that owns Heathrow International Airport, the world's busiest, told the newspaper many current practices were a response to specific incidents. He suggested starting with a "clean sheet of paper" to determine what makes sense.
Transport Secretary Philip Hammond backs allowing companies to decide on specific procedures to meet outcomes set by the government.
Luxury spending shows who's doing well
NEW YORK, Oct. 27 (UPI) -- A breakdown in spending shows a widening gap between U.S. consumers doing well and those doing poorly, an economist said.
With stock markets up for the past two months, wealthier Americans are beginning to spend on luxury items, USA Today reported Wednesday. But spending on basic items remains in a slump, showing the "have-nots" have not recovered from the recession that officially ended more than a year ago.
"The rising tide isn't lifting all boats," said Carl Steidtmann, chief economist at accounting and consulting firm Deloitte.
Consumer spending overall rose 1.4 percent in the January through August, compared to the first eight months of 2009. But consumers are spending less this year on prescription medicines and more on high-tech televisions, the newspaper said.
Spending on pets shows a split within that sector alone. Spending on organic pet food is up, but low-cost pet food is also doing well. "People are cutting back on themselves more than they're cutting back on pets," said Bob Vetere, president of the American Pet Products Association.
EU trade commissioner scolds China
BRUSSELS, Oct. 27 (UPI) -- European Union Trade Commissioner Karel De Gucht admonished China for its protectionist tendencies concerning government contracts.
At an EU-China conference in Brussels, De Gucht called for Beijing to loosen policies that make it difficult for foreign companies to secure Chinese government contracts. He also said China's recent ban on rare earth minerals exports was a sign that China was attempting to leverage its monopoly to benefit Chinese companies, the EUobserver reported Wednesday.
China has banned exports of rare earth minerals, a critical component to many electronic devices. Over the years, the United States and Australia have cut back on rare earth mining and production, allowing China to command 97 percent of the market.
"It's obvious that we cannot continue being completely dependent on China," De Gucht said.
