Most stocks fall amid signs of weak economy
NEW YORK » Most U.S. stocks dropped for a second day after Target Corp. and Lowe's Cos. reduced forecasts, heightening concern that the housing slump has slowed consumer spending.
Target, the second-largest U.S. discount chain, retreated the most in six weeks after slashing its projection for September sales.
Lowe's, the second-biggest home-improvement retailer, posted its steepest decline since 2003 after saying earnings this year may miss its prior forecast.
Lennar Corp., the largest U.S. homebuilder, sank to a four-year low on the worst quarterly loss in its history.
The Standard & Poor's 500 Index slipped 0.52 to 1,517.21. The Dow Jones Industrial Average increased 19.59, or 0.1 percent, to 13,778.65. The Nasdaq Composite Index added 15.5, or 0.6 percent, to 2,683.45, helped by a 1.7 percent rise in Microsoft Corp.
About eight stocks dropped for every five that rose on the New York Stock Exchange.
The Russell 2000 Index, a benchmark for companies with a median market value of $647 million, fell 0.4 percent to 803.
The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, lost 0.1 percent to 15,254.08. Based on its decline, the value of stocks decreased by $11 billion.
In other markets, the yield on the benchmark 10-year Treasury note fell more than 0.01 percentage point to 4.61 percent. The dollar dropped to a record against the euro for a fourth day on growing expectations the Fed will cut borrowing costs for a second time this year.
"The housing numbers and the retail communications from Target are weighing on the psychology of the market," said Scott Richter, who helps manage $21 billion at Fifth Third Asset Management in Cleveland. "The consumer is getting pressured right now and that works right down the line to retail sales."
Target dropped $2.95, or 4.6 percent, to $61.35. Comparable- store sales will increase 1.5 percent to 2.5 percent for the five weeks through Oct. 6, the company said. Target previously forecast a September gain of 4 percent to 6 percent.
Lowe's lost $2.04, or 6.7 percent, to $28.51. Profit this year may be at the low end or slightly below an Aug. 20 forecast of $1.97 to $2.01 a share, the company said. Eighteen analysts surveyed by Bloom-berg estimated an average profit of $2.01.
Lennar lost 96 cents, or 4 percent, to $23.22. The largest U.S. homebuilder reported a fiscal third-quarter loss of $513.9 million as reduced demand for housing forced the company to write down the value of some real estate. Revenue slid 44 percent to $2.34 billion.
General Motors Corp., the biggest U.S. automaker, declined 32 cents to $34.42. GM's U.S. factory employees staged their first nationwide strike in 37 years Monday.
Technology shares rallied.
"Technology appears to be the new safe haven, so going forward that may be the place to put your money," said David Spika, who helps oversee about $6.5 billion as investment strategist at West- wood Holdings Group Inc. in Dallas.
Microsoft, the world's biggest software maker, climbed 48 cents to $29.56. "Halo 3," the latest version of Microsoft's best-selling Xbox video-game series, went on sale yesterday.