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24 December, 2008

Dow Falls For 5th Straight Session on Grim Data


Wall Street declines as investors sift through more data showing an anemic economy

Wall Street pulled back again Tuesday in muted trading ahead of the holiday, as another round of reports showed further deterioration in the housing market and broader economy.
The Dow Jones industrial average finished lower for the fifth straight day, falling 100 points.
Tuesday's gloomy data was hardly surprising to jaded investors. And trading volume has been light this week, which tends to skew the market's movements; many traders are on vacation for Christmas, and the market will close early, at 1 p.m. EST, on Wednesday.

"It is a very quiet news week, and much of it has already been priced into the market," said Ryan Larson, head of equity trading at Voyageur Asset Management.
The reports offered Wall Street no reason to be upbeat, however, and the concern remains that the economy will keep weakening well into the new year. That anxiety is sapping the hope for a year-end rally in the Dow, which is has fallen 36.5 percent since 2008 began.
The Commerce Department reiterated Tuesday that third-quarter gross domestic product, a measure of the economy that tallies the value of goods and services, fell at an annual rate of 0.5 percent.

The government also said sales of new homes fell in November to the slowest pace in nearly 18 years, while prices of new homes dropped by the biggest amount in eight months.
Sales of existing homes keep dropping as well. The National Association of Realtors said existing home sales fell 8.6 percent to an annual rate of 4.49 million in November from a downwardly revised pace of 4.91 million in October. That was more than analysts expected.
The Dow Jones industrial average shed 100.28, or 1.18 percent, to 8,419.49. The Dow is well off the multiyear lows it tumbled to in mid-November, but it is still down more than 400 points, or 4.6 percent, so far for the month of December. Typically, December is the one of the best months for the stock market.

Broader indexes also declined on Tuesday. The Standard & Poor's 500 index fell 8.47, or 0.97 percent, to 863.16. The Nasdaq composite index fell 10.81, or 0.71 percent, to 1,521.54. The Russell 2000 index of smaller companies fell 6.43, or 1.35 percent, to 468.64.
Declining issues led advancers by 3 to 2 on the New York Stock Exchange, where consolidated volume came to 3.63 billion shares, down from 4.31 billion shares on Monday.
Government bond prices were narrowly mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 2.18 percent. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.02 percent from late Monday.

News from corporate America on Tuesday brought little cheer.
Greeting-card company American Greetings Corp. said it swung to a third-quarter loss, hurt by hefty charges and a decline in sales. Shares fell $3.42, or 35 percent, to $6.40.
And the shape of the financial industry continued to shift, as two more companies got government funding.

Credit card lender American Express Co. and commercial financial firm CIT Group Inc. said Tuesday they each received preliminary approval to obtain billions in funding from the government's $700 billion bank investment program.
American Express fell 46 cents, or 2.5 percent, to $17.96, and CIT Group rose 8 cents to $4.26.
Shareholders approved two acquisitions that were forced by banks' massive credit losses.
PNC Financial Services Group Inc. and National City Corp. shareholders approved PNC's acquisition of the Cleveland-based bank, and Wells Fargo & Co. and Wachovia Corp. shareholders approved Wells Fargo's $11.8 billion purchase of the Charlotte, N.C.-based bank.

Shares of Pittsburgh-based PNC rose 33 cents to $43.01, and National City shares edged up 4 cents, or 2.5 percent, to $1.65 on its last day of trading.
Shares of San Francisco-based Wells Fargo fell 43 cents to $26.99, and Wachovia shares fell 15 cents to $5.30.

The dollar was mixed against other major currencies, while gold prices fell.
Oil prices fell on concerns that energy demand is evaporating in the face of a severe global economic slowdown. Light, sweet crude fell 93 cents to settle at $38.98 a barrel on the New York Mercantile Exchange, after dipping below $38 earlier in the day.
The plunge in energy prices has brought little comfort to stock investors. The downturn should give consumers a break when they heat their homes and fill their cars' tanks, but it is a glaring sign of the grim economic outlook and the shattered financial industry.


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Posted by fxgenbroker 01:31 | forexgen Partnership, Dow Falls | Comment(0) | Permalink

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