August 2nd, 2011
05:13 PM ET

Dow dives below 12,000

Some highlights from the day's business news:

U.S. stocks plunged on Tuesday as fears about a weak U.S. economy were enflamed after investors got another disappointing economic report - this time on consumer spending.

"Now that we have solved the debt ceiling issue, the market has moved onto the other data, which has taken a significant turn for the worse," said Ryan Detrick, senior technical strategist with Schaeffer's Investment Research.

The Dow Jones industrial average plunged 266 points, or 2.2%, to close at 11,867. The Dow was dragged lower by the industrial and manufacturing heavyweights of the 30-member index: Alcoa, General Electric, United Technologies and Boeing.

This was the eighth straight day of declines for the Dow - a losing streak not seen since October 2008, when the financial system was in the depths of the crisis. The Dow has fallen roughly 6.7% since the sell-off began on July 22.

The S&P 500 lost 33 points, or 2.6%, to 1,254 - pushing it into negative territory for the year. The Nasdaq Composite dropped 75 points, or 2.8%, to 2,669.

Americans choose to save, not spend, in June

Americans earned a little bit more income in June, but they chose to stash it away rather than spend it.

Personal spending fell 0.2% during the month, according to data released Tuesday by the Commerce Department.

It marked the biggest monthly decline in consumer spending since September 2009 and fell short of economists' forecasts for a slight increase of 0.1%.

"It's consistent with this flat spot we're seeing in the economy," said Paul Ballew, chief economist at Nationwide. "Consumers retrenched underneath all the pressures between rising gas prices and continued housing challenges."

Personal income rose 0.1% in June.

- CNNMoney.com's Ken Sweet and Annalyn Censky contributed to this report.

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Filed under: Budget • Business • Economy
soundoff (48 Responses)
  1. Joey Isotta-Fraschini

    It's another prophesy of all those that inevitably come true: this is the Hope part of H&C.
    Hope it gets better.

    August 3, 2011 at 6:54 am | Report abuse |
  2. Audit the Fed

    Since the year that a federal reserve was established in our country too, the US dollar has lost 97% of it's value, and our economy has gone through a never-ending series of booms and busts. In fact, our economy would have fared better all this time if it were placed on the pass line of a craps table where the odds of winning are 50/50, rather than being entrusted to the Fed. Audit the Fed. What are you afraid of Joey?

    August 3, 2011 at 7:18 am | Report abuse |
  3. Audit the Fed

    How it works: The IRS funnels income taxes to the B.I.S. who distributes some of them to the Fed located in the US, who then distributes them to select banks who then loan income-tax dollars back to us, with a margin for profit. If a government refuses to raise taxes but still spends more, it is covered by the Fed who simply totals the number of dollars overspent and adds that to the amount scammed ny the Wall Street banks and prints that much. "That much" was over 3 trillion this last go-round, dwarfing the measly 600 billion squandered on bank bailouts by our government. Audit the Fed and this all goes away...along with some of our corporate and political leaders going away to prison for a very long time for doing this to US.

    August 3, 2011 at 7:53 am | Report abuse |
  4. banasy

    @Fake:

    The George Patton on this board said it best:

    Je te reconnais, voleur des noms, meme en italien!!! Le vrai Joey dit toujours la verite.

    August 3, 2011 at 8:45 am | Report abuse |
  5. Joey Isotta-Fraschini

    Forse cambio il nome.

    August 3, 2011 at 10:11 am | Report abuse |
  6. audit the Fed

    Example: Just as the Fed appears to be American-like, some individuals try and appear to be French-like. How can you tell? Ask them to pronounce the word 'forte'. The French pronounce it fort. The wannabe's say fore-tay while multi-tasking their pinky finger upwards. It's the freaking Federal Reserve, not a fortress. Kick the door down and audit them already. Sheesh! No offense Mr. French.

    August 3, 2011 at 10:55 am | Report abuse |
  7. RUFFNUTT

    the econmy stinks...

    August 3, 2011 at 11:10 am | Report abuse |
  8. CSnSC

    The pronunciation depends on whether the word following it begins with a consonant. And you are aware you are repeating your request for an audit, ad nauseum, to a community incapable of doing anything about it, right.

    August 3, 2011 at 11:12 am | Report abuse |
  9. disband the Fed

    @CSnSC...there. Is that better? (disband instead of audit) The weather repeats itself too ya know, but people still talk about it. And as if there aren't new people viewing these boards daily. And since you are tired of hearing about it, you can imagine how President Obama must feel. For he refuses to even discuss this topic in public, and no doubt wishes those that do would just go-away. Many people here share that sentiment, not just you. No wonder he got elected.

    August 3, 2011 at 11:51 am | Report abuse |
  10. disband the Fed

    Incabable? This community has moved to make gay marriage and sodomy legal. Surely they can move a little more and help US get the Fed audited/disbanded...even if just writing their representatives letters: Dear Sirs, thank you for making sodomy legal except for in the military, but we have one more favor to ask. Please audit the Fed. Yours truly, (insert name here)

    August 3, 2011 at 12:16 pm | Report abuse |
  11. Philip

    Asking where the towers went is my forte'. Hmmm...there doesn't seem to be any kind of word after fore-tay, CSnSC. Let me try again. I have a forte'. Dang it. Maybe yer right. (shrug) and "he he".

    August 3, 2011 at 1:10 pm | Report abuse |
  12. CSnSC

    Yeah, shoulda mentioned the following word thing only counts in french. I get your point about the fed but as you mentioned earlier, if it were honestly audited some really big heads would roll. Dosnt seem very likely.

    August 3, 2011 at 1:28 pm | Report abuse |
  13. Philip

    It's not very likely that American's will stop molesting children either. Still, we should at least try harder. And I do get your point. People are slow to move these days unless it involves their day-to-day affairs. Nice discussing this with you CS. Have a nice day. 🙂

    August 3, 2011 at 1:38 pm | Report abuse |
  14. pac

    I make pretty good money. And find it still hard to save I don't think the people are stasheing it away there paying way to high inflammation,Food,Gas ect. What happen to taping into the oil reservoirs was that for the presidents flee of jets

    August 4, 2011 at 6:28 am | Report abuse |
  15. kalpeshmaniar

    S&P has downgraded US debt, this has created panic in the markets, but the question is should we take S&P seriously when these credit rating agencies have proved that their understanding about economies is indeed poor.

    Remember, it is the same S&P that gave AAA rating to mortgage backed securities in 2005-2007 and we all know what happened after that, so I guess its time to be bullish when S&P, Goldman and the likes become bearish on the world. please visit http://www.kalpeshmaniar.com for accurate forecasting of markets

    August 10, 2011 at 2:19 am | Report abuse |
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