Post date: Nov 23, 2011 11:21:1 PM
Economic jitters from abroad offset optimism heading into the unofficial start of the holiday shopping season, pulling U.S. stocks down by more than two percent.
USA-USCLOSE - U.S. consumer spending hit the brakes in October; not the kind of news retailers wanted to hear on the eve of one of the busiest shopping days of the year.
But there are reasons to be hopeful: household incomes saw their biggest jump in seven months; weekly jobless claims were up, but stayed below the 400,000 level, suggesting the labor market continues to see a gradual improvement; And consumer sentiment rose in November, according to the Reuters-University of Michigan final reading for the month.
So how do things look heading into Black Friday?
Megan Donadio is a retail strategist at Kurt Salmon Associates and is more optimistic than some.
MEGAN DONADIO, RETAIL STRATEGIST, KURT SALMON ASSOCIATES SAYING:
"Kurt Salmon is predicting a slight increase to this year's holiday season and we are looking at about a 3.6 percent increase for those sales. So it's going to be a good season for retailers and as I said it's going to be the ones that can make it a little bit easier, and make the deal a little bit better for the consumer that are going to come out ahead."
Optimism ahead of the start of the crucial holiday shopping season in the U.S. - eclipsed by worries about Europe. Germany is the latest source of concern after few investors showed interest in buying new German debt.
Meanwhile, weak factory data out of China added more concerns about the global economy.
That was too much to bear for Wall Street. Stocks tumbled 2 percent, closing at roughly a seven-week low.
European stocks fell to a seven-week low as well, though losses were smaller than the U.S.
Conway Gittens, Reuters