In Retail Sales, More Signs of a Slowdown
Americans sought out more bargains and cheaper goods in July, leaving the nation’s biggest retailers bracing for a painful back-to-school shopping season.
Retail sales reports released Thursday revealed a country that is rapidly ratcheting back its spending habits, and abandoning midtier and discount shopping mall mainstays that were booming a year ago.
The biggest surprise was a middling month for Wal-Mart Stores, the behemoth of the discount retail industry, which reported an increase in sales but missed Wall Street’s estimates. Wal-Mart also warned that its sales would slow in August, as the stimulus from the government’s tax rebates fades away.
The gloomy forecast helped depress stocks on Thursday, and the Dow Jones industrials were down about 120 points at mid-day. Wal-Mart shares tumbled more than 4 percent.
For months, sales at the big retail stores have been closely tracked as a gauge of trends in consumer spending, which accounts for more than two-thirds of the nation’s economic growth. Retailers showed some resilience, with many stores beating sales estimates, in part, because of the government’s tax rebates.
But as the stimulus program winds down, few buffers will separate retailers from consumers struggling with higher fuel and food prices, a housing price collapse and a tight credit market.
Europe Central Bank, Bank of England Keep Rates Unchanged
The European Central Bank left its benchmark interest rate unchanged on Thursday amid mounting evidence that the economy of the 15-nation euro area was slowing.
The bank kept its rate at 4.25 percent after it bucked the trend of major central banks in July by raising its rate a quarter percentage point, a step aimed at cooling expectations of rising inflation.
On Thursday, the Bank of England also kept its key rate unchanged at 5 percent, as it sought to balance its twin goals of keeping inflation under control while mitigating the worst effects of a significant slowdown in the British economy.
The European bank is holding rates steady amid increasing evidence that the Continent’s economy appears to have slowed dramatically in the last few months, a development that reflects a much weaker outlook in Germany, which accounts for a third of the region’s output.
German industrial orders, the backbone of its growth, fell 2.9 percent in June from May, the seventh consecutive decline, according to data released Wednesday. Orders from the rest of the euro area, Germany’s largest market, declined 7.7 percent in the same period.
“German manufacturers clearly can’t escape unscathed from the darkening outlook for the global economy,” Alexander Koch, an economist at UniCredit, wrote in a research note.
Group Says Video Warns of Olympic Attack
A terrorist group seeking an independent Muslim state in western China has released a video threatening an attack on the Olympic Games here, according to an American organization that tracks terrorist Internet posts.
The video’s opening graphics show a burning Olympic logo and an explosion superimposed over one of the athletic sites, said the monitoring organization, IntelCenter, based in Alexandria, Va.
According to IntelCenter’s description, a man holding a Kalashnikov rifle, who identifies himself as Abdullah Mansour, says in the Uighur language: “We, members of the Turkestan Islamic Party, have declared war against China. We oppose China’s occupation of our homeland of East Turkestan, which is a part of the Islamic world.”
He warns Muslims not to go to the games and not to let their children go. “We do not want to see any Muslim brothers and sisters who believe in Allah and his Holy Prophet Muhammad, who believe in the next life and the day of judgment, get hurt by our fire targeted at China,” he says.
The Uighurs, a Turkic Muslim people, dominate the Xinjiang region in western China.
The video’s violent opening graphics are the same as those in a video the group released July 23, in which it claimed responsibility for bus bombings in Kunming and Shanghai that killed five people and wounded at least 26. In that video, a masked spokesman threatened violence against the Olympics.
Fingerprint Analysis Shows What’s Been Touched
With a new analytical technique, a fingerprint can now reveal much more than the identity of a person. It can now also identify what the person has been touching drugs, explosives or poisons, for example.
Writing in Friday’s issue of the journal Science, Dr. R. Graham Cooks, a professor of chemistry at Purdue University, and his colleagues describe how a laboratory technique, mass spectrometry, could find a wider application in crime investigations.
The equipment to perform such tests is already commercially available, although prohibitively expensive for all but the largest crime laboratories. Smaller, cheaper, portable versions of such analyzers are probably only a couple of years away.
In Cooks’ method, a tiny spray of liquid that has been electrically charged — either water or water and alcohol — is sprayed on a tiny bit of the fingerprint. The droplets dissolve compounds in the fingerprints and splash them off the surface into the analyzer. The liquid is heated and evaporates, and the electrical charge is transferred to the fingerprint molecules, which are then identified by a device called a mass spectrometer. The process is repeated over the entire fingerprint, producing a two-dimensional image.