By Clyde Noel

Stock Report

y definition, two quarters of declining growth have thrown the country into a recession. The unemployment rate jumped to 5.4 percent last month reflecting the heaviest job losses in 21 years.

Consumer confidence in October hit a seven-year low, which is a better indicator than the Consumer Price Index of the cost of living. When that goes down, you can prepare for a real slowdown in the economy.

Last week, the Dow Jones industrials lost another 222 points and ended down 2.3 percent, nearly 14 percent for the year.

The Nasdaq Composite index lost 22 points and was down 1.3 percent for the week, 29 percent for the year.

Because both are heavy in technology issues. The Town Crier index mirrors the Nasdaq and dropped 1.23 percent for the week, 27.76 percent since Jan. 1.

So what’s happening to get the economy going?

The Treasury will stop selling the 30-year bond, a surprise move that is expected to drive down long-term interest rates, including mortgage rates, and help boost the economy.

The Federal Reserve is expected to cut interest rates another half-point this week to help boost the economy. This will be the 10th rate cut this year.

The Fed needs to take a bold step because consumers are on edge due to threats of more attacks, anthrax scares and more companies posting lower profits for the third quarter.

The Fed has already dropped the rates nine times since January for a total of 4 percent. Another stimulus package aimed at helping a recovery is being debated on Capital Hill right now.

In another stock market move, more investors are taking a closer look at stocks that pay generous dividends. Many companies, especially in technology, don’t pay any dividends.

With stocks off so sharply from their highs and the outlook for future gains uncertain, dividends are looking more and more attractive because they represent a part of the total return. Presently, only two companies in the Town Crier index pay dividends.

Dividends, which are quarterly cash payments to shareholders, are especially appealing when compared to other investments. Of the 30 Dow Jones industrials stocks, more than half offer better returns than many money market funds or bank CDs.

Here at home, two utility companies that could be on the Town Crier Stock list pay nice dividends to investors. California Water pays 4.24 percent and San Jose Water yields 3.11 percent.

Noel, a seasoned investor, covers the stock market for the Town Crier.