7:55 am - DJIA on a weekly basis is set to fall some more !

7:52 am - US retail sales in record fall, but sentiment up

WRAPUP 4-US retail sales in record fall, but sentiment up By Alister Bull WASHINGTON, Nov 14 (Reuters) - Sales at U.S. retailers suffered a recorddecline in October as fears of recession sapped spending, but part of the dropwas due to slumping gasoline prices which helped buoy consumer confidence. The Commerce Department said on Friday that retail sales slumped 2.8percent in October to a seasonally adjusted $363.7 billion, the largest declinesince the department's current methodology was adopted in 1992, as mountingunemployment hit shoppers' appetites. A separate Reuters/University of Michigan November survey of consumersshowed that confidence unexpectedly rebounded from a record October drop astumbling gas prices offset worries about the economy. While lower gas prices were welcome, declines in a broad number of retailsales categories showed consumers were still on the defensive. "What you are seeing now is the turmoil in the credit and funding marketsplaying out into the consumer sector," said Kevin Flanagan, fixed incomestrategist, global wealth management at Morgan Stanley in Purchase, New York. Consumer spending is a crucial driver of U.S. growth and stocks fellsharply, with the Dow Jones industrial average ending 337.94 points, or 3.82percent lower at 8,497.31. The dollar rose, aided from its role as a safe haven in a deterioratingglobal investment climate, while U.S. Treasury notes advanced in price for thesame reason and because a weaker economy theoretically favors such fixed incomeassets. Economists polled by Reuters forecast a 2.0 percent fall in Octoberretail sales as the escalating financial crisis took a toll on consumers. Retailsales last month were down 4.1 percent from a year ago. Sales excluding autos fell a record 2.2 percent in October versus aforecast of a 1.2 percent decline. Lower gasoline prices, as crude oil retreated sharply from a July peakaround $147 a barrel, helped depress sales at gas stations by a record 12.7percent in October. As a result, a closely watched core measure of retail salesexcluding autos and gasoline fell 0.5 percent in October. "Take out cars and gas, it's a drop of half a percent. It's not good, butit's not horrific. This could have been worse; it's encouraging that it wasn't,"said David Resler, chief economist at Nomura Securities in New York. The sharp drop in gasoline station sales may also have reflected fewermiles driven by Americans last month. The Reuters/University of Michigan Surveys of Consumers said itsconfidence index edged up to 57.9 in November from 57.6 in October. Despite therise, sentiment remains at depressed levels, with the index below the lowestlevels hit during the depths plumbed during the last two recessions. "Lower gas prices and sizable discounts at retailers helped to slightlyimprove consumers' assessments of current economic conditions, while higherunemployment and a deepening recession dimmed their expectations for futuregains," the Surveys of Consumers said in the report. "You might have hoped, say gasoline was way, way down in price, thatmight free up money to spend on other stuff. But that didn't happen, peoplestill spent less on other stuff. So that's not good," said Nigel Gault, chiefU.S. economist at Global Insight in Lexington, Massachusetts. Lakshman Achuthan, managing director at the Economic Cycle ResearchInstitute, a New York-based independent forecasting group, put it more bluntly:"Not only is no economic recovery on the horizon, but the economy is falling offa cliff at its fastest pace in at least six decades. Individual car makers have reported a collapse in sales sincemid-September after auto-loan terms tightened sharply in the aftermath ofinvestment bank Lehman Brothers's failure. The Commerce Department said motor vehicle and parts sales slide 5.5percent in October after a 4.8 percent September fall. October's performance forthe category was the weakest since August 2005, when car sales were off 10.3percent. Majority leader Sen. Harry Reid, a Democrat from Nevada, said he "plansto press forward" with emergency aid to American automakers and will begindebate on Monday of a $25 billion bailout. It was not clear if there wassufficient backing from Republicans to deliver the emergency aid. General Motors Corp, Ford Motor Co and Chrysler LLC are furiouslylobbying for $25 billion in immediate bailout money to help them survive theindustry's worst financial crisis. A report from the Labor Department showed U.S. import prices posted thelargest monthly drop since 1988 in October as the cost of imported oil slid. Separate Commerce Department data showed that stocks of unsold goods atU.S. businesses unexpectedly fell a seasonally adjusted 0.2 percent inSeptember.