US Stocks Steeply Lower; Apple Downgrade Hits Technology Sector

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					US Stocks Steeply Lower; Apple Downgrade
Hits Technology Sector
January 2, 2014

U.S. stocks fell sharply on Thursday, after closing out 2013 with double-digit gains, as a
downgrade of Apple hit the technology sector and investors bypassed a decline in jobless claims
and a strong manufacturing report.
"I think the big issue is just how long investor enthusiasm lasts. It has certainly raced ahead of the
fundamentals," said Bruce McCain, chief investment strategist at Key Private Bank.
"The trend in the data really isn't the problem, they suggest we're getting some improvement in the
fundamentals. But the markets have been superlative, and you can only keep that up for so long. At
some point we get a stronger corrective pullback than we've seen in the last few years or so," McCain added.
Apple fell 1.4 percent after Wells Fargo downgraded its stock to market perform from outperform.
Analog Devices dropped percent after Goldman Sachs Group reduced the circuit manufacturer to sell
from neutral and Wells Fargo cut the stock to market perform from outperform. Newmont Mining
rallied along with the price of gold.
                       Name                 Price   Change %Change
            Dow Jones Industrial
DJIA                                     16465.90 -110.76 -0.67%
S&P 500 S&P 500 Index                    1833.29 -15.07 -0.82%
NASDAQ Nasdaq Composite Index            4142.72 -33.87 -0.81%
After a near 143-point drop, the Dow Jones Industrial Average was lately off its session lows, with
Cisco Systems leading blue-chip losses that extended to all but three of its 30 components.
The S&P 500 declined, with technology the hardest hit of the index's 10 major industry sectors, all of
which were in the red.
The Nasdaq also lost ground.
For every stock rising, more than two slid on the New York Stock Exchange, where 340 million
shares traded as of 2:05 p.m. Eastern. Composite volume approached 2 billion.
On the New York Mercantile Exchange, gold futures rallied $26.70, or 2.1 percent, to $1,227 an ounce;
crude futures declined $2.54, or 2.6 percent, to $95.88 a barrel.
The dollar rose against the currencies of major U.S. trading partners, while the 10-year Treasury yield
used in figuring mortgage rates and other consumer loans rose 2 basis points to 2.99 percent.
A report Thursday had applications for unemployment benefits falling by 2,000 to 339,000 last week.
Separate data from the Institute for Supply Management's manufacturing index came in better than
expected in December.
We've had a string of really good reports, so that's largely priced into the market," said McCain of
recent economic data. "From here it's a matter of the money flows, and the best hope of continuing the
rally is new retirement contributions, things that normally hit the markets at this time. By default, a lot
of money is continuing to go into the equity markets."
U.S. markets were closed Wednesday for New Year's Day.
On Tuesday, Wall Street closed out 2013 at record levels, with the S&P 500 recording its best year in
16 and the Dow industrials tallying their strongest year in 18
US stocks steeply lower; Apple downgrade hits technology sector VIDEO BELOW
1.3 Million People Lost Unemployment Benefits.
It Could Get Ugly
Joshua Green
January 2, 2014

When Congress reconvenes on Jan. 6, one of the first issues it will take up is whether to renew an
emergency federal unemployment program that expired on Dec. 28, cutting off 1.3 million jobless
workers. Enacted in 2008 at the start of the recession, it provided up to 47 weeks of benefits for those
still looking for work when their state unemployment benefits ran out. Senate Majority Leader Harry
Reid says he’ll try to pass a temporary extension, but most Republicans have balked at the $25 billion-
a-year cost. If the program isn’t revived, the impact could be significant—not just for the 1.3 million
people losing a vital lifeline but on the broader economy.
How will these workers fare? One place to look for answers is North Carolina. Last February, at the
behest of the business community, Republican Governor Pat McCrory signed a bill cutting the amount
and duration of state jobless benefits, even though North Carolina’s unemployment rate ranked among
the highest in the country. The state had exhausted its unemployment trust fund, paid for by business
taxes, and had borrowed $2.5 billion from the federal government to pay jobless claims. “We’re going
to pay down that debt, make the system solvent, and provide an economic climate that allows
businesses, large and small, to put people back to work,” McCrory said at the time. When the new law
took effect on July 1, the maximum weekly benefit fell from $535 to $350 and its duration fell to
between 12 and 20 weeks (depending on the state’s unemployment rate) from 26 weeks—the standard
in most other states.
                                That was only half the blow. Reducing state benefits violated the terms
                                of the federal program—which is intended to supplement, not replace,
                                state aid—so workers in North Carolina were also disqualified from
                                receiving federal benefits. In essence, the state’s experience over the last
                                six months is a harbinger of what may be in store for the rest of the
                                country. “This doesn’t have to be a thought experiment, because you
                                can just look at what’s happened in North Carolina,” says Aaron
                                Chatterji, an economist at Duke University’s Fuqua School of Business.
                                “The 1.3 million people losing their benefits are going to be in the same
                                position as the 170,000 people here who have lost theirs.”
                                Story: Congress's Big, Stingy Christmas Mistake
                                At first glance, the effect appears to be positive. North Carolina’s
                                unemployment rate dropped dramatically, from 8.8 percent to 7.4
                                percent between July and November. By comparison, the national
                                unemployment rate fell by 0.6 percent over the same period. A closer
                                look, however, suggests that North Carolina’s unemployment numbers
                                have fallen not because the long-term jobless have found work but
                                because they’ve quit looking altogether. As a result, the state no longer
                                counts them as unemployed.
“The decline in the unemployment rate gives you a very limited view of what’s going on in our labor
market,” says John Quinterno, founder of South by North Strategies, an economic research firm in
Chapel Hill, N.C. “Year over year, the number of employed people in North Carolina ticked up by
6,082, while the unemployed fell by 101,901. That means the labor force contracted by 95,009. So the
improvement has not necessarily been driven by more people going to work and is actually being
driven to a large degree by people leaving the labor force.” In October the state’s labor force
participation rate hit a 37-year low. One benefit of unemployment insurance is that “it has an anchoring
effect,” says Quinterno, “because you have to be looking for work” to qualify for benefits.
Though the job market hasn’t fully recovered from the recession, many Republicans believe extending
jobless benefits saps workers’ motivation to seek employment or accept positions they deem less than
ideal. “I do support unemployment benefits for the 26 weeks that they’re paid for,” Kentucky Senator
Rand Paul said on Fox News on Dec. 8. “Beyond that, you do a disservice to these workers. When you
allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of
this perpetual unemployed group.”
Story: Why Don't the Jobless Get the Same Tapering Touch as Banks?
Economic research has shown that some job seekers do become less selective about the jobs they’re
willing to take once their unemployment insurance expires—the so-called “employment effect.”
There’s evidence this may be occurring in North Carolina. A Dec. 20 note from JPMorgan Chase’s
(JPM) chief U.S. economist, Michael Feroli, pointed out that the state’s employment growth has
outpaced national growth since July. Yet he also noted that labor force participation has fallen much
faster than it has nationally. “In this case,” he concluded, “it would appear both channels are operative
but the participation effect may be more important.”
It’s hard to draw firm conclusions from limited data. But if the expiration of jobless benefits is
prompting large numbers of North Carolinians to give up looking for work, it would augur poorly for
the state’s economy and the country’s, too. Working-age Americans who can’t find gainful employment
represent lost economic value and unmet U.S. growth potential. While some may settle for part-time
work, others will try to qualify for disability. Long stretches of unemployment reduce the likelihood of
finding a job, as skills and connections atrophy.
As people cycle in and out of the unemployment system this year, an additional 3.6 million workers
will lose access to benefits if federal insurance isn’t restored, according to a December report by the
White House Council of Economic Advisers. That’s a lot of misery and squandered economic potential.
It’s also why “the Tar Heel test tube,” as Feroli has dubbed it, is worth paying attention to. Says
Chatterji, “The statistics are so dramatic.”

Marc Faber ‘Congratulates’ Ben Bernanke Your
Policies At The Federal Reserve Have Screwed
The American People “Well Done, Mr.
Bernanke!” Well Done!
Zero Hedge
January 2, 2014

In a little under four minutes, Marc Faber explains to Fox Business’ Dagen McDowell all that is wrong
with the Central Planners ‘current plan.’ From a re-bubbled housing ‘recovery’ pricing real buyers out
of the market (“homes do not offer a great opportunity today”) to forced-renters paying increasing
amounts of their stagnant wages, and the small percentage of ordinary Americans who actually benefit
from a rising stock market, reducing their disposable income to which Faber sarcastically rants “well
done, Mr. Bernanke.” His advice, be diversified, don’t BTFATH in stocks, and physical gold is always
a good insurance.

Marc Faber ‘Congratulates’ Ben: “Well Done, Mr. Bernanke!” VIDEO BELOW
70% Of Americans Have “No Faith” In
Steve Watson
January 2, 2014

Only at local level do a majority have any form of confidence
As we move into 2014, a new poll finds that a whopping 70 percent of Americans have absolutely “no
faith” in government to make progress on key issues.
The Associated Press/NORC Center for Public Affairs Research survey found that 7 in 10 voters do not
have any confidence in the government “to make progress on the important problems and issues facing
the country in 2014.”
The poll also indicates that even fewer, only one in twenty Americans, believe that the current system
of government requires no changes.
Drilling down into exact numbers, half of those polled said that said the government requires either “a
lot of changes” or “a complete overhaul”.
Respondents cited jobs and the economy, and the nation’s debt and deficit spending as key issues which
they have no faith in the government to improve. On the issue of national debt, 65 percent say they
have no confidence in the government’s ability to fix it.
Unsurprisingly, considering the utter disaster that is Obamacare, the top issue cited by the public in the
poll is healthcare reform.
Half of those who said healthcare was a top priority, described themselves as “not at all confident” that
members of Congress could make reform a success. Only 20 percent said they are “slightly confident.”
The confusion and overwhelming lack of belief in the political system is emphasized by an almost
50/50 split on whether the government should be doing more or doing less in general. In addition,
while 80 percent of voters said they want the government to invest “significant effort” on the top
issues, 76 percent of them said they have “little or no confidence” the government will make
meaningful progress.
Fifty percent also said that they are generally pessimistic about the emergence of effective leaders from
the established political system.
The only level at which more Americans have faith in government than do not is at the local level, with
54 percent expressing “moderate confidence”. At the state level, 45 percent expressed moderate
70% Of Americans Have “No Faith” In Government VIDEO BELOW

Feds Preparing For Violence Targeting Social
Security Buildings?
Paul Joseph Watson
January 2, 2014

Homeland Security spends $58 million on armed guards for just two SSA offices
The Department of Homeland Security is spending up to $58 million dollars to hire armed guards to
protect two Social Security buildings in Baltimore, measures which some see as preparation for
upcoming civil unrest. According to an announcement on the Federal Business Opportunities website,
the DHS awarded Paragon Systems, Inc. a contract “not to exceed $58,620,338.99,” to provide
“Protective Security Officer (PSO) services in support of the Social Security Administration (SSA)
 Wabash Street and Metro West locations within Baltimore, MD.”
According to its website, “Paragon security specialists and officers perform armed and unarmed
post/gate control, magnetometer and X-Ray screening, roving foot and vehicle patrols, management of
central communications/security centers, CCTV and alarm monitoring, security escort, dignitary
protection, security training, threat assessment, emergency preparedness evaluation, vehicle and visitor
screening/badging, armory management, and first responder emergency services, including emergency
medical technicians.”
Recent indications suggest the feds are becoming increasingly concerned over Social Security buildings
becoming a target for irate Americans. The DHS ran a controversial drill in January 2012 dubbed
“Operation Shield,” during which FPS agents armed with semiautomatic guns were posted outside a
Social Security office in Florida accompanied by sniffer dogs as they checked the ID’s of visitors. The
exercise centered around “detecting the presence of unauthorized persons and potentially disruptive or
dangerous activities.” DHS officials refused to speak to the media when asked about the drill.
$58 million dollars, even if stretched over a number of years, seems like an awful lot of money to
protect just two Social Security buildings, but it fits the pattern of recent spending on armed guards to
protect government buildings which led to concerns from some that the feds are gearing up for civil
unrest in relation to restrictions in benefits and other entitlements.
Back in November we highlighted how the DHS was looking to hire armed guards with “top secret”
security clearances in Wisconsin and Minnesota.
A month prior to that, the DHS’ $80 million dollar outlay on armed guards to protect government
buildings in upstate New York prompted Fox News’ Neil Cavuto to speculate that the feds were
preparing for violence in response to cutbacks in the food stamp program.
In October it emerged that Homeland Security was set to spend half a million dollars on fully automatic
pepper spray launchers and projectiles that are designed to be used during riot control situations.
Some fear that the recent spate of “knockout game” assaults and violent flash mob attacks on shopping
malls are signs of spreading discontent. With food stamps having already been reduced, unemployment
benefits are also now being cut, a “perfect storm” that could spiral into social unrest.


Description: U.S. stocks fell sharply on Thursday, after closing out 2013 with double-digit gains, as a downgrade of Apple hit the technology sector and investors bypassed a decline in jobless claims and a strong manufacturing report.