Wall Street ends mixed after paring steep losses
NEW YORK » Wall Street pared steep losses yesterday to end narrowly mixed after a surprise drop in new home sales for February triggered further concern that economic growth is slowing more than expected.
The U.S. Commerce Department reported that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000. It was the slowest sales pace in nearly seven years and dimmed hopes for a rebound in the troubled housing market.
Economists have been watching the housing industry for a hint about where the economy is heading. The disappointing data came amid continued concern about the subprime mortgage market, which has been slammed by an increase in delinquencies in recent months.
This sent major indexes down throughout most of the session, with the Dow Jones industrials racking up triple-digit losses. Investors used the decline to buy some shares before the second-quarter ends on Friday, analysts said.
"The market is already worried more about economic growth than inflation, so I think you're going to see reactions like this," said Todd Salamone, director of trading at Schaeffer's Investment Research in Cincinnati.
The Dow fell 11.94, or 0.10 percent, to 12,469.07. Last week, the benchmark index posted a 370 point gain, its best weekly point rise in four years. It dropped as much as 112 points earlier yesterday.
Broader stock indicators were slightly higher. The Standard & Poor's 500 index rose 1.39, or 0.10 percent, to 1,437.50, and the Nasdaq composite index added 6.70, or 0.27 percent, to 2,455.63. The Russell 2000 index of smaller companies was fell 3.26, or 0.40 percent, at 806.25.
Advancing issues outnumbered decliners by about 3-to-2 on the New York Stock Exchange, where consolidated volume came to 2.69 billion shares, up from 2.56 billion Friday.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.60 percent from 4.61 percent late Friday. The dollar traded mixed against other major currencies, while gold prices advanced.
Investors also are focused on a spate of economic data due this week, including Conference Board's consumer confidence survey today and the gross domestic product report due tomorrow.
Oil prices rose yesterday, with a barrel of light sweet crude up 63 cents to $62.91 on the New York Mercantile Exchange.
Citigroup Inc. fell 18 cents to $51.54. The Wall Street Journal reported Citigroup might reduce its work force by about 5 percent. The company has been under pressure during the past year to boost earnings to fend off rivals from eating into its global market share.
Dell Inc. rose 79 cents, or 3.5 percent, to $23.62 after a Goldman Sachs analyst said the computer maker should see benefits from its turn-around efforts later this year.
Walgreen Co. reported second-quarter profit surpassed Wall Street projections as the drug store chain posted robust revenue from retail prescriptions. The stock fell 47 cents to $47.30.