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Market Feeling Consumer Spending Slowdown

This is not a good day for consumer discretionary stocks. From housing to restaurants to hotels to autos, companies are reporting notably slower sales, and they are not anticipating much of a rebound in the second half of the year.

Consider:

In hotels, Starwoodlowers guidance, and notes that timeshare sales declined 25 percent in the second quarter, with average prices down 19 percent.

In builders, Ryland reported a large loss, with large writedowns continuing for land and inventory,while existing home sales in June were just dismal--the lowest level going back to January 1999. The inventory level rose to 11.1 months, near its highest level since 1985.

In autos, autos, Fordreported a large loss, North American sales were worse than expected. One analyst noted that Ford burned through $3.1 billion in the last quarter, with $26.6 b left.

In restaurants, Chipotlemissed earnings and estimates and noted that sales were slowing in June and July.


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