Sale of housing data was released today with mixed results.
Discrimination of the long term unemployed continues with some companies. Luckily New Jersey made legislation making this sickening practice illegal. Lets hope other states pick up this cause.
Here are the top financial stories of the day:
1) Earnings, Debt Fight Weigh on Stocks-From The Wall Street
U.S. stocks finished lower Tuesday as a mixed batch of earnings reports failed to stem investor caution over the deadlock in Washington's debt negotiations.
The Dow Jones Industrial Average closed down 91.50 points, or 0.73%, at 12501.30, its third straight decline and fourth loss in five sessions. 3M led the blue-chip index lower, sinking $5.41, or 5.4%, to 89.93.
The conglomerate expects one of its biggest businesses, providing films used in flat-screen television sets, to remain weak in the second half of the year. 3M accounted for more than a third of the Dow's declines.
The Dow's fall accelerated in the final half hour of trading, with the index down as much as 104 points late in the day.
"Short-term traders are taking bets one way or another ahead of a debt-ceiling announcement," said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management. "When a deal isn't announced, people are taking positions off the table at the end of the day. This light-volume, choppy environment will continue until we get some kind of announcement."
The Standard & Poor's 500-stock index fell 5.49 points, or 0.41%, to 1331.94, as industrial and material stocks declined. The technology-oriented Nasdaq Composite fell 2.84 points, or 0.10%, to 2839.96.
The Dow has dropped 223 points, or 1.75%, over the last three sessions as the deadlock in Washington's debt negotiations has curbed investor enthusiasm. Financial markets this week have begun seriously assessing the prospect of a downgrade of the U.S.'s triple-A credit rating. Republicans and Democrats appear far apart on reaching a deal to reduce the nation's fiscal deficit and increase the limit on federal borrowing.
"As the clock ticks away, the probability of a downgrade becomes larger," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management. "We're playing with fire."
Late Monday, in prime-time national addresses, President Barack Obama and House Speaker John Boehner pitched their divergent plans for solving the nation's fiscal problems. Mr. Obama warned that the U.S. is on the brink of a default that could spark a "deep economic crisis—one caused almost entirely by Washington."
Despite the recent weakness, stocks remain within striking distance of multiyear highs. Many investors still believe the political posturing will eventually give way to some type of resolution.
The Dow is up 8% year-to-date and is only 2.4% below the three-year closing high it hit in late April, indicating Wall Street doesn't appear much perturbed by the debt debate.
2) Spring buying boosted home prices for 2nd month-From the AP
Home prices in major U.S. cities rose for the second straight month in May, propped up by an annual flurry of spring buyers. But after adjusting for such seasonal factors, prices fell in a majority of markets.
The Standard & Poor's/Case-Shiller home-price index released Tuesday showed that prices rose in 16 of the 20 cities tracked.
Boston posted the biggest monthly increase, followed closely by Minneapolis and Washington. Three metro areas hit the hardest by the housing crisis -- Detroit, Las Vegas and Tampa, Fla. -- hit their lowest points since the recession began. Prices in Phoenix were unchanged.
Still, 19 of the 20 cities have seen year-over-year price declines.
The 20-city index rose 1 percent in May from April. The index measures prices compared with those in January 2000. It then provides a three-month average. The May data is the latest available.
Last year, a tax credit for first-time buyers helped boost prices. They rose nearly 4 percent from April through July before falling more than 7 percent this winter to record lows. Prices in big metro areas sank in March to their lowest levels since 2002.
Housing remains the weakest part of the economy. Sales of previously owned homes fell in June for a third straight month to a seasonally adjusted annual rate of 4.77 million homes. This year's pace is lagging behind the 4.91 million homes sold last year -- the fewest since 1997. In a healthy economy, people buy roughly 6 million homes per year.
Home sales have fallen in four of the past five years, forcing prices down in most areas. Declining home values have made people feel less wealthy, and they are spending less as a result. That affects consumer spending, which accounts for 70 percent of economic activity.
Fewer first-time homebuyers are able to qualify for a loan or have the money required for a down payment.
A growing number of contracts are being canceled before sales are final, because unexpectedly low home appraisals are scuttling loans. Few people want to take on the extra debt associated with a home purchase.
High unemployment, millions of foreclosures and tighter credit are likely to keep people from buying homes in the second half of the year, economists say. Even historically low home prices and cheap mortgage rates haven't brought people back to the market.
Foreclosures and short sales -- when a lender agrees to sell for less than what is owed on a mortgage -- made up about 30 percent of all home sales last month, up from about 10 percent in past years. And a wave of foreclosures are being held up, either by backlogged courts or lenders awaiting state and federal probes into troubled foreclosure practices.
3) The Help-Wanted Sign Comes With a Frustrating Asterisk- From The New York Times
The unemployed need not apply.
That is the message being broadcast by many of the nation’s employers, making it even more difficult for 14 million jobless Americans to get back to work.
A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.
Unemployed workers have long suspected that the gaping holes on their résumés left them less attractive to employers. But with the country in the worst jobs crisis since the Great Depression, many had hoped employers would be more forgiving.
“I feel like I am being shunned by our entire society,” said Kelly Wiedemer, 45, an information technology operations analyst who said a recruiter had told her that despite her skill set she would be a “hard sell” because she had been out of work for more than six months.
Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.
The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.
Given that the average duration of unemployment today is nine months — a record high — limiting a search to the “recently employed,” much less the currently employed, disqualifies millions.
The positions advertised with preferences for the already-employed run the gamut. Some are for small businesses, and others for giants, including the commercial University of Phoenix (which, like some other companies, removed the ads after an inquiry by The New York Times) or the fast-food chain Pollo Tropical.
They cover jobs at all skill levels, including hotel concierges, restaurant managers, teachers, I.T. specialists, business analysts, sales directors, account executives, orthopedics device salesmen, auditors and air-conditioning technicians.
“It is really a buyer’s market for employers right now,” said Harry J. Holzer, an economist at Georgetown University and the Urban Institute. One consequence is that the long-term unemployed will rack up even more weeks of unemployment, Mr. Holzer said, and will find it harder to make the transition back to work.
Even if Congress passed a measure forbidding companies from making current employment a requirement for job applicants, companies could still simply decide not to hire people who are out of work. Discrimination
would be difficult to prove.
After all, there are legitimate reasons that many long-term unemployed workers may not be desirable job candidates. In some cases they may have been let go early in the recession, not just because business had slowed, but because they were incompetent.
Idle workers’ skills may atrophy, particularly in dynamic industries like technology. They may lose touch with their network of contacts, which is important for people in sales. Beaten down by months of rejection and idleness, they may not interview well or easily return to a 9-to-5 schedule.
“We may be seeing what’s called statistical discrimination,” said Robert Shimer, a labor economist at the University of Chicago. “On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out the good ones.”
Employers receive so many applications for each opening that some may use current employment status as an easy filter. In some cases — as with Ms. Wiedemer, of Westminster, Colo. — recruiters merely assume employers do not want jobless workers.
“Clients don’t always tell us ‘we don’t want to see résumés from unemployed workers,’ but we can sense from what people have interested them in the past that they’re probably looking for somebody who’s gainfully employed, who’s closer to the action,” said Dennis Pradarelli, a talent acquisition manager for Marbl, a recruiting firm in Brookfield, Wis. Many of the job ads posted by his firm seek workers who are “currently employed or only recently unemployed.”
Many firms that are not intentionally screening out the unemployed may still disqualify such applicants for having bad credit histories after having fallen behind on the bills — which they of course need a job to pay.
It’s not clear what can be done to pull workers out of this unemployment trap.
Government incentives for companies to hire unemployed workers have met with limited success. One such tax incentive from last year was poorly publicized, so most employers did not know about it. Better publicity may not suffice, either. An experiment from the 1980s found that telling companies that the unemployed were eligible for generous wage subsidies actually made employers less likely to hire such workers.
Job counselors often encourage the long-term unemployed to go back to school or volunteer to demonstrate that they are still productive, engaged members of society. But absent the actual acquisition of marketable skills — which many retraining programs do not provide — it’s not clear such efforts improve the chances of being hired.
“Mentally, it may be good for the candidate, but I think companies are still in a position to say ‘O.K., we’re looking for a candidate with the most up-to-date skills,’ ” Mr. Pradarelli said. “If you’ve been out of pocket for two years, going back to school sounds nice, but it doesn’t make or break the situation.”
The best solution, economists say, would be to encourage job growth more broadly, which may initially involve poaching people from other companies but could eventually draw even the least desirable workers back into jobs. During the boom years of the late ’90s, the labor market was so tight that ex-convicts had relatively little trouble finding work.
In the meantime, people like Ms. Wiedemer — who has been out of work for three years — are exhausting their benefits and piecing together what support they can from food stamps and family members. And they are stuck hoping that economic growth manages to outpace their own descent into permanent economic exile.
“I worry that unemployment may eventually come down, not because older workers who have been unemployed for a year or two find jobs,” Professor Shimer said, “but because older workers finally give up and drop out of the labor force.”
Quote of the Day from Dave Ramsey.com:
Fate knows where you are going, but it is up to you to drive there. — Michelle Keesling
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