Besides the view from the Fed, things got even worse when Cisco (CSCO), which reported strong earnings, disappointed on revenue and warned that it saw signs of a slowdown in corporate spending. That sent shares down 10%, and further spooked the market.
Stocks ended the week trying to make sense of a slew of economic data:
- U.S. retail sales were up in July by 0.4% over June, but that didn't mean consumers were shopping more at retail stores. Most of that increase came from car dealerships and higher gasoline prices. Outside of those areas, retail sales actually fell 0.1%, one result of high unemployment.
- High gas prices also contributed to an increase in the consumer price index, which was up 0.3% in July. If you take out gasoline and some volatile food prices, the CPI was up 0.1%, which is negligible.
- While consumer sentiment beat expectations, there wasn't much to cheer about given that the early August reading of 69.6 followed a drop in July to 67.8, the lowest level since November.
- Finally, U.S. business inventories rose 0.3% in June to $1.36 trillion -- their highest level in a year. That came after a 0.2% rise in May. At the same time sales fell. The worry: Consumer demand was less than businesses had expected.
For more, on the week's market action, see video: