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Pre-Market Primer: Economic Malaise Drags Stocks Down


The US, Germany, and Japan are feeling the pain. On the bright side, consumer spending is picking up in the US.

MINYANVILLE ORIGINAL Global stocks declined today on disappointing economic reports in Europe and Asia.

Economic sentiment in the European Union fell more than expected this month. The European Commission's survey fell to a three-year low of 86.1 from 87.9 in July. The index was expected to rise to 88.0. Among the 27 member countries, Estonia stands alone as the only country with economic sentiment better than the long-term average.

The economic malaise on the continent has worn on Germany's export-driven economy, and more Germans are finding themselves jobless. Unemployment in Germany unexpectedly rose for a fifth straight month by 9,000 to 2.9 million jobless.

Retail sales in Japan fell more than expected in July. Sales dropped 0.8% from the year before. This is the first time in eight months that the sales in the country fell.

Personal income in the United States rose 0.3% in July after rising 0.5% in June. Consumer spending picked up, however. After staying stagnant in June, consumer outlays increased by 0.4%. Initial claims for unemployment insurance rose by 2,000 last week to 374,000. This rise, which fell in line with expectations, brought the four-week moving average of claims to 370,250 per week.

After the economic data was released, Dow (^DJI) futures were down 0.25% at 13,051.00, S&P 500 (SPY) futures lost 0.28% to 1,403.30, and Nasdaq (^IXIC) futures declined by 0.35% at 2,771.50.

Shares of Pandora (P) rose 15.18% to $11.61 this morning after the music-streaming service unexpectedly reported a profit for the second quarter. Listener hours rose 80% over the same period last year, which spurred a 51% increase in advertising revenue. Mobile revenue also increased by 86%.

Sears (SHLD) shares fell 4.18% to $55.05 after it was announced that the company will be booted out of the S&P 500 index, of which it was a founding member, at market close on Tuesday. Sears' public float is too far below the 50% requirement for being included in the index. LyondellBasell Industries (LYB) will replace Sears in the S&P 500.

Barclays (BCS) has named Anthony Jenkins to replace CEO Bob Diamond, who had to resign after the firms involvement in fixing the benchmark LIBOR came to light.

Twitter: @vincent_trivett
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