Market Snapshot October 30, 2009, 4:30PM EST

A Fearful Friday for Stocks

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In economic news Friday, U.S. consumer confidence edged up to 70.6 in the final reading of the October University of Michigan survey, from the 69.4 preliminary print. The index had surged to 73.5 in September from 65.7 in August. The current conditions index was revised up to 73.7 from the 72.1 preliminary (73.4 in September). The final 6-month outlook index increased to 68.6 from 67.6 in the preliminary (73.5 in September). The 1-year ahead inflation index rose to 2.9% from 2.8% in the preliminary (2.2% in September). The 5-year ahead price index was unchanged from the 2.9% preliminary (2.8% September).

U.S. Chicago PMI climbed to 54.2 in October after sliding almost 4 points to 46.1 in September, unable to hold August's 50.0. But the components were mixed. The employment component slipped to 38.3 from 38.8. New orders surged to 61.4 from 46.3. The inventory index fell to 32.2 from 38.9. Prices paid declined to 48.6 from 51.3. This adds to the mix of other regional October PMI data: NY's Empire State reading jumped to 34.6 from 18.9 while the Dallas Fed's index improved to -3.3 from -6.4, while the Philly Fed dropped to 11.5 from 14.1 and the Richmond Fed declined to 7 from 14.

The U.S. employment cost index (ECI) rose 0.4% in the third quarter following a 0.4% increase in the second quarter and a 0.3% increase in the first. Wages and salaries were up 0.4% vs. 0.4% previously. Benefit costs rose 0.4% from 0.3% previously. On a year-over-year basis, employment cost growth slowed to a 1.5% pace from 1.8% previously, a new all-time low for this series.

U.S. personal income was flat while spending fell 0.6% in September. August's 0.2% increase in income was revised down to a 0.1% gain (July's 0.2% increase was also revised down to 0.1%). The 0.9% rise in spending in August was revised up to 1.0%. Spending on durable goods declined 7.0%, erasing the 6.1% increase in August, largely a function of the government's "cash for clunkers" program to spur auto sales. Wages and salaries fell 0.2% last month, with disposable income unchanged. The savings rate rose to 3.3% from 2.8% previously (revised from 3.0%).

The personal consumption expenditures price index was up 0.1% in September following a 0.3% gain in August, while the core rate, which excludes food and energy prices, was steady at 0.1%.

The U.S. economy's return to growth during the third quarter shows stability has been regained but recovery is fragile and needs nurturing, Treasury Secretary Timothy Geithner said. In a one-hour question-and-answer session at the Economic Club of Chicago, Geithner said the United States can't borrow-and-spend its way to health and pledged every effort to encourage an investment-led recovery.

Investor George Soros warned of a double-dip recession as the economy runs out of steam and more "bloodletting" in commercial real estate and leveraged buyouts (LBOs).

PIMCO CEO Mohamed El-Erian on CNBC said he expects third-quarter GDP to be revised lower and repeated skepticism about growth in 2010.

Andrews is managing editor of the Investing Channel for BusinessWeek.com .