NEW YORK >> Stocks slid today after a new batch of data showing resilience in the economy cast doubt over how aggressively the Federal Reserve will continue to cut rates. Economic data
send stocks lowerBy Seth Sutel
Associated PressTrading was light and choppy throughout the session, which was among the slowest of the year for both the New York Stock Exchange and Nasdaq Stock Market.
The Dow Jones industrial average closed down 89.13 at 10,821.31. The index has closed down four of the last five sessions. The Nasdaq composite index fell 21.43 to 2,107.43. The Standard & Poor's 500 index slipped 9.51 at 1,245.67.
Decliners outnumbered advancers 3 to 2 on the New York Stock Exchange, with 1,733 down, 1,266 up and 218 unchanged. Volume was 894.03 million shares, below the previous low for 2001 of 913.93 million set on April 16 and less than the 1.05 billion traded yesterday. The Nasdaq Stock Market, with had a volume of 1.47 billion shares, just surpassed its previous low for the year. The previous low of 1.45 billion was set April 9.
The NYSE composite index lost 4.35 to 633.64, the American Stock Exchange composite index dropped 5.07 to 934.86 and the Russell 2000 index fell 3.22 to 487.36. The Treasury's 10-year note fell 1-5/32 to 96-20/32; its yield rose 16 basis points to 5.45 percent. The 30-year bond fell 1-1/4 to 93-1/8; its yield rose 9 basis points to 5.86 percent.
Investors have been hoping the Fed will cut rates once again at its regular meeting Tuesday, with some looking for as much as a cut of a half percentage point. But the stronger-than-expected reports on retail sales, consumer confidence and inflation stoked fears that the Fed might be nearing the end up its rate-cutting campaign, and may only cut rates a quarter point, or not at all. That unnerved many on Wall Street, which has increasingly looked to interest rate cuts -- rather than earnings -- for a catalyst to rally.
"These reports suggest the economy is in better shape than thought, and maybe the Fed doesn't need to cut interest rates," said Marshall Acuff, equity strategist at Salomon Smith Barney. "But because earnings are still weak, the market needs the support of declining interest rates. If you take that away, the market doesn't have much to hang on to, and you're going to see a correction."
IBM was among the top decliners on the Dow, falling $3.71 to $111.49 following a downgrade by Bear Stearns on the heels of the company's meeting with analysts yesterday.
Shares in the embattled telecom equipment maker Nortel Networks fell 59 cents to $14.63 on news that its chief executive, John Roth, would retire at the end of the year. The company has also shuttered its digital subscriber line Internet service as part of a retrenchment program.
Schering-Plough shares rose $1.20 to $38.30 on a report in Business Week magazine saying that rival drug maker Merck may be interested in making a bid to acquire it. Merck shares were off 58 cents to $75.94.