It was a day of mixed messages on the economic front on Tuesday. An unexpected drop in sales of just about everything from cars to clothes sent a sobering message: The economy is still vulnerable. The Fed chairman may have found some reasons to be optimistic, but President Barack Obama was more sober, saying, "By no means are we out of the woods just yet." Maybe the real good news was that the bad news wasn't horrible.
Obama: President Obama, playing down recent talk of "glimmers of hope" for economic recovery, said Tuesday that sustained prosperity will come only if Congress moves quickly on a set of thorny issues that long have defied solution — health care, energy, education, financial regulation and curbing the deficit. The president said, "2009 will continue to be a difficult year." He predicted more job losses, foreclosures and gyrating stock markets.
Wall Street and retail sales: Wall Street shifted into reverse Tuesday after a surprisingly weak retail sales report punctured investors' optimism. Retail sales fell 1.1 percent in March. The poor sales, combined with a sharp drop in wholesale prices, came just as the corporate earnings season, usually a volatile time in the market, got under way. The Dow lost nearly 140 points to close at 7,920.
Bernanke: Improvements in a string of economic reports over the past few weeks — including home and auto sales and home building — had raised optimism. Federal Reserve Chairman Ben Bernanke said, "Recently, we have seen tentative signs that the sharp decline in economic activity may be slowing." But he, too, cautioned that a lasting recovery hinges on normal borrowing and bolstering the financial markets.
Goldman Sachs: It's hard to imagine that any bank could emerge victorious from current woes, but Goldman Sachs seems to be thriving while rivals struggle. Now the company has plans to sell more of its stock and quickly pay back the $10 billion in bailout money it received. That could free the bank from restrictions imposed by feds — including limits on executive pay — and help it increase its lead over rivals that cannot repay their federal debt yet.