Oct. 25 - Summary of business headlines: Amazon misses, UPS beats profit forecasts; U.S. consumers grow more pessimistic, home prices barely move; Wall Street falls as angst of European debt talks return. Conway G. Gittens reports.
A big miss at Amazon.com. The online retailer saw a drop in third-quarter profits that was bigger-than-expected, though a rise in revenues matched forecasts. The company is ramping up spending as it gets ready for the debut of its next line of Kindle tablets. Amazon's outlook for next quarter is at the low end of Wall Street projections. United Parcel Service, or UPS, beat earnings forecast, with revenues hitting analysts targets. Better pricing offset sluggish delivery volumes in the U.S. Still, the world's largest package delivery company is standing by its outlook for record results for the year. In economic news: Consumer confidence tumbled to a 2-1/2 year low in October on concerns about jobs and wages. But how consumers feel and what they do have seen a disconnect lately, with consumer spending stronger than anticipated. Meanwhile, housing prices didn't move much in August, according to the closely-watched S&P/Case Shiller index. Jobs and housing are the two biggest economic risks and the two hardest to resolve, says Stephen Wood of Russell Investments. SOUNDBITE: STEPHEN WOOD, CHIEF MARKET STRATEGIST, RUSSELL INVESTMENTS (ENGLISH) SAYING: "So right now the plan that I've seen come out of Washington, not just the President but also Republican proposals - I'm just not quite sure there is going to be a meaningful short-term impact. It's just going to take a long time for the housing and employment industry to heal." Healing was needed on Wall Street, as the broader market fell for the first time in four sessions; investors are nervous ahead of European Union debt talks on Wednesday. But those talks won't include the region's finance ministers which added to angst. Shares across Europe were down, but the losses were not as big as in the U.S. Conway Gittens, Reuters