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Oct 9, 2008 8:10 pm US/Eastern
Stock Market Drop Alarms Some Consumers
PITTSBURGH (KDKA) ―
It was another sharp drop on the market, down to a level we haven't seen on a regular basis in more than a decade.
All this week, financial analysts have been saying the bottom is coming -- and the market will start to recover.
But today's drop doesn't have an easy explanation.
In fact, financial analyst Brian Koble of Hefren-Tillotson told Money Editor Jon Delano that he thinks it's not just fear that's moving the numbers on Wall Street.
"The stock market swings from fear to greed and back. Today, we are past fear, we are past panic. We're at irrationality. In other words, investors are behaving irrationally. And I would say there's few times if any in history where investors sold into a panicked irrational market and didn't regret it a few years later," Koble says.
Koble's advice is stay the course, since selling now only locks in a loss.
He adds that lack of leadership in Washington doesn't help either. We don't have a Franklin Roosevelt to reassure us -- and it's more than three weeks until we elect a new president.
So what's the impact of this market drop on the economy?
Well, the stock plunge comes just as retailers report that sales were off in September.
"I told my husband he's going to be working until he's 80, just watching our 401-k's dwindle. it's alarming. it absolutely is alarming," Michelle Ehrgood of McDonald told Jon Delano today.
As the stock market continues to plunge -- unemployment rises -- and people feel stretched by rising prices, retailers across America say they've noticed shoppers cutting back.
Nationally, 75 percent of retailers reported September sales below expectations.
Same store sales at JCPenney were down 12.4 percent, at Saks -- down 10.9 percent, at Nordstrom -- down 9.6 percent, and at Target -- down 3.0 percent.
Even those popular discount retailers -- which increased sales in September -- were behind the numbers they had projected.
Wal-mart's September sales were up just 2.4 percent -- Costco up 9.0 percent -- but both were below their own projections.
Out at the local malls, shoppers are still buying.
"Are you watching how you spend your money?" Jon Delano asked Nancy Black of Saxonburg.
"No, I'm not. I think it's going to come right back up again. I'm 72 years old. I've lived through this. I even remember the Depression. It'll come back."
Now at most malls on a Thursday afternoon, you're going to find plenty of parking spaces. But that could be time of day, rather than the economic recession.
And most of the local shoppers we did find are still buying.
"We don't have credit card debt -- my husband and I -- we buy and pay off as we go each month and I think it leaves a little bit extra spending money," said Jamie Slack of McDonald.
Shoppers may be buying but they're definitely looking for good deals.
"I think we should save a little bit," said Shelley Piekarski of Shaler.
"But you're still buying?"
"Yeah, Forever XXI," she said, pointing to her shopping bag and laughing. "It's cheaper."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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