So much for the rally: Stocks opened sharply higher on what seemed like decent economic news. But all the gains have been pared back and then some. Dow is down about 20 points.
Big drop in jobless claims: Normally subject to bounces, weekly filings for unemployment benefits have been all over the map this month. The new report shows that claims fell 23,000, to 369,000. From AP:
Employers are hesitant to add more workers as long as growth remains tepid and Europe's financial crisis threatens to push that region into recession. Many also are holding off because they are worried about tax increases and government spending cuts that would kick in next year if Congress doesn't reach a budget deal to avert them.
Ford cuts back in the UK: Another sign that U.S. corporations are feeling the effects of a struggling European economy. The carmaker announced it will cut 1,500 jobs in Britain and that losses in Europe will exceed $1.5 billion this year. (AP)
CEOs pushing Washington: More than 80 chief executives from some of the nation's largest corporations say that any fiscal plan must limit the growth of health-care spending, make Social Security solvent, and include tax reform. From the WSJ:
The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. "There is no possible way; you can do the arithmetic a million different ways" to avoid raising taxes, said Mark Bertolini, CEO of Aetna. "You can't tax your way to fix this problem, and you can't cut entitlements enough to fix this problem." Mr. Bertolini emphasized that he and like-minded CEOs will resist raising taxes unless accompanied by significant spending restraint. "If someone were to make the argument, we just want to increase revenues so we can increase entitlements, the answer is no," he said.
Gas update: Another sizable overnight drop. Average gallon of regular in the L.A. area is $4.358, according to the Auto Club, down about 35 cents from its all-time high earlier this month.
Bad news for Brown's tax measure: Proposition 30 is supported by only 48 percent of likely voters, according to a poll by the Public Policy Institute of California. An LAT/USC poll shows 46 percent are in favor of the initiative that would raise sales taxes - as well as income taxes on the wealthy. It's the first time that both polls showed support falling below 50 percent. From the Mercury News:
Because voters tend to mistrust initiatives and tend to vote "no" on most of them -- particularly those hiking taxes -- ballot measures have historically needed the support of well over 50 percent heading into an election to survive. A defeat of Proposition 30 would trigger $5.4 billion in cuts in January to K-12 schools and community colleges, and an additional $250 million each to the University of California and California State University. It could also complicate Brown's ability to govern for the remainder of his term -- with battles over deeper cuts with Democratic legislators looming -- and even dent his legacy, political observers said.
Proposition 37 nearly tied: That LAT/USC poll has 44 percent in support of the state measure to label genetically engineered foods and 42 percent opposed. From the Times:
The initiative, if approved, would make California the first state to require labels on genetically engineered crops or processed foods, such as most corn, soybeans, sugar beets and Hawaiian papayas. It would require labels on supermarket shelves, food packages or produce bins. The momentum, with less than two weeks before the election, appears to be on the side of opponents. Over the last month, support for the initiative dropped 17 percentage points and opposition grew by the same amount. A previous USC Dornsife / Los Angeles Times poll taken Sept. 17 to 23 had 61% in favor, 25% opposed and 14% undecided.