Personal spending fell 0.5 percent in September, the Labor Department reported Friday, in line with forecasts. That follows a 1.3 percent jump in August fueled by the government's popular Cash for Clunkers car rebate program.
The market is paying close attention to indicators of consumer spending, which is still in a slump despite improvements in other parts of the economy such as manufacturing and housing. Spending by consumers makes up a major part of the U.S. economy.
The Dow Jones industrials jumped nearly 200 points on Thursday following a strong report on gross domestic product growth in the third quarter, but many economists worry that much of that growth came from government stimulus measures and that weak spending by consumers will continue to hold the economy back.
The Labor Department also reported Friday that personal income was flat in September compared with the previous month, in line with expectations.
A lack of income growth is due, in part, to ongoing high unemployment rates. With jobs scarce, employers face little pressure to raise pay. The Labor Department said the cost of wages, health care and other benefits increased by 1.5 percent in the year ending Sept. 30. It was the smallest increase since records began in June 1982.
On Thursday, investors cheered a government report that the economy grew at 3.5 percent in the third quarter after four straight quarters of declines. It was the most promising evidence yet that the longest recession since the 1930s has ended.
In early trading, the Dow fell 59.17, or 0.6 percent, to 9,903.41. The Standard & Poor's 500 index fell 5.40, or 0.5 percent, to 1,060.71, and the Nasdaq composite index lost 6.01, or 0.3 percent, to 2,091.54.
Yesterday’s Top Performing Small Cap stock:
Mantra Venture Group Ltd. (OTC BB: MVTG) was a SmallCapVoice.com top performer yesterday closing up over 19% on trading volume of 386,803 shares.
Mantra Venture Group Ltd. announced that it has signed a Letter of Intent (LOI) with King Fahd University of Petroleum & Minerals (KFUPM) based out of Dhahran, Saudi Arabia. Under the terms of the LOI, Mantra and KFUPM's Center for Refining and Petrochemicals (CRP) have expressed a mutual interest to explore and research new processes that would use Mantra's Electroreduction of Carbon Dioxide (ERC) reactor, a form of carbon recycling.
Current processes developed by Mantra have been demonstrated as effective in converting CO2 into a variety of valuable chemicals, including: formate salts, formic acid, oxalic acid and methanol. While each of these end-products has a significant market value, Mantra is now looking to create additional value in its ERC technology by expanding this list. The CRP Research Institute of KFUPM has extensive capabilities in product research and application, is very knowledgeable about the petrochemicals industry, and can help Mantra achieve its goal.
Today’s SmallCapVoice.com Hot Stock to Watch:
Viper Networks, Inc. (Pink Sheets: VPER)
Viper Networks, Inc., a global telecommunication network operations and technical management company, announced today that it has signed a Letter of Intent to acquire a 49% interest of a privately held, profitable construction company based in Saudi Arabia, for a combination of cash and stock.
Farid Shouekani, President of Viper Networks, commented: "As we continue to aggressively expand our telecommunications division, this acquisition not only provides the Company with a sizable investment in existing real estate and construction projects throughout the Middle East, but also provides us immediate access to a well established team of proven professionals to help bring our non-teleco related projects to fruition in the Company's emerging real estate, construction and energy divisions."
Mr. Shouekani continued, "This additional interest in high-quality properties in our core markets represents an excellent opportunity for Viper Networks to add value with a modest investment.”
