Stocks lost more ground today over worries that European troubles and a slowing Chinese economy could weigh on earnings. Helping to prompt those worries was Advanced Micro Devices’ (AMD) earnings warning that its second-quarter sales fell because of lower demand from China and Europe. The chipmaker’s shares fell 11%, while the broader Philadelphia Semiconductor Index fell 2%.
The Dow fell 83 points, with 20 of its 30 components lower; the S&P 500 lost 10; and the Nasdaq was off by 29. Decliners led advancers by two to one on the NYSE and the Nasdaq. The prices of Treasuries strengthened. Gold futures fell $9.30 to close at $1,579.80 an ounce, and the price of crude oil lost $2.08 to settle at $83.91 a barrel.
In Earnings News:
- Alcoa Inc. kicked off second-quarter earnings season by reporting profit and revenue that was only marginally higher from the previous year’s loss, but its results still beat lowered expectations. The aluminum manufacturer reported profit of 6 cents a share, up from breakeven a year ago. Revenue was $5.96 billion, down 9.4%. The company benefited from increased auto and aircraft orders. Its shares (AA) fell 4%.
In Other Business News:
- Eurozone finance ministers agreed today to speed up delivery of bailout funds to Spain and give the struggling country more time to trim its budget deficit to acceptable levels. The first installment of $37 billion will be disbursed by the end of July, and Spain will now be allowed to run a budget deficit of 6.3% of gross domestic product, or GDP, this year and will have until 2014 to get its budget deficit down to the eurozone-mandated 3% of GDP.
- Optimism among small business owners took a hit in June, according to the National Federation of Independent Business’ Small Business Optimism Index. The index fell from 94.4 to 91.4, with 9 out of 10 components declining. Job creation faltered, capital spending plans were scaled back, and small businesses reported being increasingly worried about the health of consumers.
- The Commodity Futures Trading Commission, or CFTC, filed suit against Peregrine Financial Group Inc., alleging that the futures broker misappropriated about $200 million of client funds and made false statements. Yesterday, Peregrine liquidated clients’ futures accounts due to accounting irregularities, the company said. CEO Richard Wasendorf Sr. allegedly made a suicide attempt, after which it was discovered that he may have falsified bank statements and failed to segregate client funds. The CFTC and the FBI are investigating.
According to BusinessNewsDaily.com, a workforce survey of more than 6,000 workers (commissioned by Aflac) showed that 49% of American workers say they’ll be looking for a new job in the coming year. This survey, of course, was clearly taken before last Friday’s dismal jobs report, otherwise more of these respondents might be resigned to hunker down a while. Among the reasons cited for leaving were those you’d expect: too much stress and shrinking benefits packages.
But a different reason surfaced as well. One-third of the respondents weren’t happy with their company’s reputation. That’s an important concern for workers in good times, but it also can be a luxury that isn’t as important during recessions. The fact that workers view their company’s reputation as a reason to stay or leave their jobs is perhaps as good a sign as any that, despite the recent sour patch of jobs data, there’s a growing confidence among the employed about the jobs market (subject, of course, to Europe not imploding, possibly sending us into another dark cloud of recession, and making everyone long for those halcyon days when they could afford to worry about something as abstract as a company’s reputation).
The biggest reason cited for leaving, though, was benefits packages, with 84% of respondents claiming that benefits would figure into their decision to leave. Stress was second, with 43% saying their current job was too stressful.
I’m skeptical of self-reported surveys that ask about some future time that’s far enough away to let people dream but not close enough that they have to do anything concrete about acting on those dreams. The thing about the future is it hasn’t happened yet (and if Yogi Berra didn’t say that, he should have). My future is stuffed to bursting with all sorts of wonderful and exciting things, such as hiking the entire Appalachian Trail, writing the Great American Novel, and opening a Rhodesian Ridgeback rescue operation, which will have a full-time staff paid for out of the novel’s proceeds (just because I love Ridgebacks doesn’t mean I want to deal with those energetic beasts personally; I’ll let the professionals suffer). Like most people, I have a wonderful future ahead of me, and most of it will probably stay firmly entrenched in that faraway place called the future. That’s why it’s best to learn how to be happy in the present, which has a tendency to stick around.
I doubt that half of the nation’s workforce would follow through and switch jobs. That’s a massive game of musical chairs, and many people would probably be left standing. In which case, maybe I’ll have a few openings of my own at my Ridgeback rescue. I plan on having a reputation as a great place to work (in the future).