U.S. Stocks Decline After Obama Jobs Proposal Fails to Boost Confidence

U.S. stocks fell, trimming the weekly gain for the Standard & Poor’s 500 Index, after President Barack Obama’s plan to boost jobs failed to bolster confidence and concern about Greece’s debt crisis escalated.

The S&P 500 slid 0.7 percent to 1,177.54 at 9:31 a.m. in New York. The benchmark gauge has risen 1 percent this week.

“The market will be jittery,” James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. The firm oversees $109 billion. “There’s that nagging thought that we can continue to have a downward spiral in Europe. There’s concern of a default, of risk in banks, of a liquidity crisis. In the U.S., even as president Obama made an effort to put that plan together, there’s not a whole lot of confidence that Congress will pass.”

Benchmark gauges fell yesterday as Federal Reserve Chairman Ben S. Bernanke disappointed investors by not detailing new plans to boost growth in the world’s largest economy in a speech to economists in Minneapolis. Bernanke stopped short of signaling what he thinks is the Fed’s best option to aid the economy, repeating points from his speech on Aug. 26 in Jackson Hole, Wyoming.

President Obama channeled the national frustration with the economy that threatens his political standing and challenged the U.S. Congress to pass a $447 billion jobs plan tilted heavily toward the Republican prescription of tax cuts. The president, speaking before a joint session of Congress, demanded six times that lawmakers act “right away” on a plan that would boost spending on infrastructure, stem teacher layoffs and cut in half the payroll taxes paid by workers and small business owners.

“For people hoping for a quick injection of economic activity, that’s not what Obama’s plan portends,” Peter Sorrentino, a senior money manager at Huntington Asset Advisors in Cincinnati, said in a telephone interview. The firm oversees $14.8 billion. “There’s going to be a fight because this is a big deal. There’s a perception that it’s going to be very difficult to pass it. Then, some people are concerned that it might not have worked last time. So, why would this be any better?”