Markets Fall as Corporate America Braces For Impact
Filed at 3:51 p.m. ET
) – With stock markets falling, the U.S. housing market in a tailspin and credit tightening, corporate America is bracing for impact.
Top U.S. executives are watching the spread of the economic contagion that started with a slump in U.S. home prices and spread through the financial sector as default rates on risky subprime mortgages rose, spooking investors the world over.
Department store chain J.C. Penney Co. regards “pretty negative sentiment” as a business reality for the near future, its chief executive said on Thursday.
“Our responsibility is to find a way to perform whatever the environment, despite a pretty negative sentiment in the marketplace, particularly about housing and energy,” said Mike Ullman, CEO of the Plano, Texas-based chain.
Deere & Co. , which makes heavy equipment used in construction and agriculture, has already started to brace for slower demand, a top executive said on Wednesday as the company reported better-than-expected profit.
“We have tried to be very responsive to the downturn by stepping on the brakes aggressively on our production,” said Mike Mack, Deere’s chief financial officer.
TIME FOR A RATE CUT?
Bruce Hertzke, chairman and CEO of Winnebago Industries Inc. , the big U.S. motor home maker, said the U.S. Federal Reserve should lower interest rates to stave off further economic slowdown.
Bless their uncreative little hearts, they only have a one-size-fits-all answer to any and all economic downturns. Loosen up credit.
No matter that easy credit was the catalyst to this disaster. No matter that corporate greed overcame corporate wisdom. The miraclle of capitalistic markets is that in spite of the worst abuses, they ultimately stew all juices.