Feb. 28 - Summary of business headlines: Markets slip after two-day buying spree; Economy relatively strong ahead of sequestration; Groupon head loses his CEO coupon; New Treasury Secretary begins tenure; retail results underwhelm. Conway G. Gittens reports.
The Dow tried but just couldn't do it, after two-days of triple-digit gains blue chips couldn't hold a push towards a record high. A minor late-day sell-off pulled the Dow, S&P 500 and Nasdaq into negative territory for the day. Stocks are up 6.2 percent year-to-date, but for how long? March 1st is the deadline for $85 billion in mandatory federal spending cuts to kick in. IHS Global Insight's Nigel Gault thinks so-called sequestration won't hurt economic growth this quarter, but will show up later depending on if and when a deal is reached. SOUNDBITE: NIGEL GAULT, CHIEF U.S. ECONOMIST, IHS GLOBAL INSIGHT(ENGLISH) SAYING: "If these cuts continue, if the sequester is not removed we think it will put a big dent into growth in the second quarter of the year. It may take as much as 1.8 percent off of growth in the second quarter, likely to push GDP growth back down below 1 percent so the impact, it won't be immediate, but it will build and it will be significant." Going into the deadline - the economy is showing strength. Business activity in the midwest raced at its fastest pace in almost a year, jobless claims dropped back down last week, and the economy actually grew at the end of last year, even if the annual growth rate of just zero-point-one percent was the slowest since the beginning of 2011. Comings and goings: Jack Lew begins his first official day as U.S. Treasury Secretary. And Andrew Mason is out at as CEO of Groupon after another weak quarter. Shares of the daily deals website lost almost one-fourth of their value ahead of his departure. Two retailers continue to struggle: The parent of Sears and Kmart - beat forecasts but sales remain depressed. And J.C.Penney announced a bigger-than-expected loss a day earlier. Shares of JCPenney tumbled 17 percent, Sears was down 5.2 percent. In Europe, anti-trust regulators are likely to go after Microsoft for failing to stick to a 2009 web brower pact. As for the market, stocks were up for a second day in Germany, France, and the U.K.