U.S. Stocks Decline Amid Plosser Comments on Fed Stimulus (Bloomberg)
U.S. stocks declined today, erasing earlier gains in benchmark indexes, after Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank’s new bond-buying program probably won’t boost growth. Conditions won’t get better as fast as people think, said Malcolm Polley, who manages $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pa. The Fed’s actions are not going to lead to higher growth, he added. Both the S&P 500 and the Dow average are trading near their all-time highs of October 2007.
Groupon decline trips Nasdaq Circuit Breaker (Marketwatch)
Shares of Groupon (GRPN) fell sharply Tuesday, tripping a Nasdaq circuit breaker aimed at shielding stocks from manipulation by short sellers. Groupon closed trading today down 7.21% to hit $4.825, after having declined by more than 10% earlier.
Home Prices Rebound (CNNMoney)
In another sign of a turnaround in the long-battered real estate market, average home prices rebounded in July to the same level they reached nine years ago. According to the closely watched S&P/Case-Shiller national home price index, which covers more than 80% of the housing market in the United States, the typical home price in July rose 1.6% compared to the previous month. The July reading matched levels last seen in the summer of 2003, when the market was marching toward its peak in 2006. The collapse of the market after that led to the financial crisis of 2008.
Underlying Disaster in Europe Accelerating: Spain’s Finances Collapsing (Seeking Alpha)
Spain’s economy is at the epicenter of the ongoing economic disaster in Europe. While it must be recognized that the capacity of global governments and central banks to avert a financial markets crisis has thus far surpassed the expectations of many observers, this analyst writes that his view about the fundamentals in Spain and the rest of Europe have been, if anything, too optimistic. The unwinding of massive fiscal deficits in Europe and the US as well as the unwinding of ultra-expansionary monetary policies in the US are going to involve a great deal of pain, he warned. And in the midst of this pain, the time will be ripe to take long-term positions — not now while the anesthesia has just been applied.