Despite modestly improving economic data (or at least housing, consumer sentiment, and income data that showed economic conditions weren’t necessarily getting worse), stocks turned lower ahead of the Federal Open Market Committee’s announcement of its policy decisions tomorrow and the European Central Bank meeting on Thursday.
The Dow fell 64 points, with 21 of its 30 components losing ground; the S&P 500 lost 5; and the Nasdaq was lower by 6. Decliners led advancers by seven to five on the NYSE and the Nasdaq. The prices of Treasuries strengthened. Gold futures fell $9.40 to close at $1,614.60 an ounce, and the price of crude oil dropped $1.72 to settle at $88.06 a barrel.
For the month of July, the Dow and the S&P 500 each gained around 1%, while the Nasdaq was up 0.15%.
In Earnings News:
- Swiss bank UBS AG’s second-quarter net income fell 58%, due in part to Facebook’s botched initial public offering. UBS said the Facebook IPO was behind a 349 million Swiss franc loss ($356 million in U.S. dollars), pushing its net income for the quarter down to 425 million Swiss francs from 1.02 billion francs in the prior-year quarter. UBS said it would seek full restitution from Nasdaq, the exchange on which Facebook trades and which UBS alleges mishandled the IPO. UBS’ shares (UBS) fell 4%.
- Pfizer Inc.’s second-quarter profit rose 25% on cuts to research and development. Pfizer reported net income of $3.25 billion, or 43 cents a share, up from $2.61 billion, or 33 cents a share, in the year-ago period. Pfizer lost patent exclusivity on its blockbuster drug Lipitor last November. Its shares (PFE) gained 1%.
In Other Business News:
- Consumers earned more and spent less in June, according to the Commerce Department’s personal income and consumption report. Income rose 0.5%, while spending dropped 0.1%, pushing the savings rate to 4.4%, its highest level in a year. For more on personal income, see Dr. Brian Jacobsen’s analysis earlier today.
- Lower gasoline prices and slightly improved assessments of job prospects six months out led to a surprising increase in consumer confidence in July. The Conference Board’s Consumer Confidence Index rose from 62.7 in June to 65.9, when a decrease had been expected by analysts. The reading is still relatively low, however, with consumers pessimistic about jobs and income.
- U.S. home prices rose a seasonally adjusted 0.9% in May, according to the S&P/Case-Shiller 20-City Home Price Index. Prices were 0.7% lower than a year ago, indicating a slowing rate of decline compared with April’s report, when prices were 1.9% lower than the prior year. All 20 cities reported price gains month over month.
Spanish researchers have discovered what every generation ever to grace the face of the earth has known: Pop music isn't the same as it used to be. According to Reuters, a team led by Joan Cerra, an artificial intelligence researcher at the Spanish National Research Council, fed a huge database of songs from 1955 to 2010 into algorithms designed to dissect the music into its components’ parts. The team examined the songs' timbre, loudness, number of instruments used, chords, and melodies. It found that music today, from the point of view of musical mechanics, is a paste of concentrated blandness compared with the richness and diversity of musical structure only a few decades ago.
Reuters quoted Cerra as bemoaning the new music: "We found evidence of a progressive homogenisation of the musical discourse. In particular, we obtained numerical indicators that the diversity of transitions between note combinations—roughly speaking, chords plus melodies—has consistently diminished in the last 50 years." The use of fewer instruments used on a typical recording, meanwhile, has diminished the timbre and texture of music. It's all bleeps, bloops, and bangs, with none of the textural variety stemming from the interplay between winds and strings (including guitars) and horns and piano (not to mention cowbell, of which you can never have enough). While the researchers don’t come out and say it, I’m assuming the downfall can be traced to the 1980s and the overuse of the keytar (for the record, any use of the keytar constitutes overuse).
And then there's the volume, which now ranges from loud to louder. In the past decade, music producers have engaged in a sonic war, with each hit song getting progressively more clamorous as it seeks to compete with other hit songs on the radio dial. There's barely any variation in songs' loudness, no middle ground between soft and ear-splitting. (Modern covers of Simon and Garfunkel’s “The Sound of Silence” would likely be ratcheted up to 11 and include window-shattering bass overdubs. Perhaps that was their original vision, and they sadly lacked the technology.) Meanwhile, somewhere in the mists of time, my younger self is mortally embarrassed at the idea that one day he’ll complain about loud music.
So there’s the hard evidence, for once, showing that things really have gone downhill, and it’s not simply the rose-tinted longing for old times and unfamiliarity with the new. Could this be one more reason, beyond illegal downloads, why the music industry is struggling? In sacrificing engaging music for the cloyingly saccharine tunes of today, the industry may have reached the limits of a business model that appeals to the lowest common denominator for sales. Now pardon me while I yell at some kids to get off my lawn.
Am I (or the Spanish researchers) being cranky, or has music devolved in the past few decades? Leave your thoughts in the comments section below.