By Maxine Shapiro, KERA 90.1 commentator
Dallas, TX – It's Friday, so "It's Only Money," a review of the big and not so big stories of the week. I'm Maxine Shapiro with KERA Marketplace Middays.
This has been a difficult week for investors who are looking for a bottom to a market that doesn't seem to want to bottom out. It wasn't very easy reading reports of how and why ex-CEO of ImClone Systems Inc. was arrested by FBI agents early Wednesday morning. Surrounding his loft at 6 a.m. while Dr. Samuel Waksal was still sleeping, he received a phone call from the agents, asking that they be let in. He left in handcuffs. The criminal charges: attempting to sell stock in ImClone and tipping off his family that a once-promising cancer drug was NOT being approved by the FDA. The FDA is also under scrutiny for not making public these private conversations with drug companies. (Don't get me started on drug companies.) Adding to this corporate soap opera, Martha Stewart, a good friend of Waksal, sold her stock in ImClone the same day his family did. Alas, this current climate is one of guilty before proven innocent - react, and ask questions later. Let's be careful here.
Yesterday the Commerce Department reported for May, consumer spending was down - a lot. The market acted surprised. They, whoever they are, must have had their heads in the sand. For over a month now, retailers have been complaining about the weather. It's been too cool for the need to buy summer clothing. And on a much broader note, consumers are just maxed out. Two-thirds of the economy is fueled by consumer spending. Remember that scene in the Titanic where the big burly men were frantically throwing fuel in the fire to keep it going? Even they got tired. Some of us think it may be time to save. Some of us have no choice.
And today many of the brokerage firms downgraded the wireless phone sector. For example, if their recommendation had been "reduce" the stock, they took it down to a "sell" recommendation. We can't complain. Analysts are now telling the truth. But industrial production was up for the fifth straight month. We'll take whatever we can get. Stay healthy and happy.
For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.