NEW YORK >> Investors resumed their selling today on Wall Street, focusing on their fears about the economy and shoving aside their resurgent optimism that business conditions will soon improve. Economic reports
sink stocksBy Amy Baldwin
Associated PressThe Dow Jones industrial average closed down 117.05 at 11,005.37. The Dow was just able to stay above the 11,000 mark, which it reclaimed May 16 after trading below the historic level for eight months.
The Nasdaq composite index fell 30.99 to 2,251.03 and the Standard & Poor's 500 index declined 15.28 to 1,277.89. Decliners edged advancers on the New York Stock Exchange, with 1,648 down, 1,375 up and 221 unchanged. Volume was 816.08 million shares vs. 1.3 billion yesterday. The NYSE composite index fell 5.85 to 647.13, the American Stock Exchange composite index lost 1.53 to 936.04 and the Russell 2000 index fell 1.78 to 508.62.
The Treasury's 10-year note fell 1/8 to 96/32; its yield rose 2 basis points to 5.51 percent. The 30-year bond fell 3/32 to 93 10/32; its yield rose 1 basis point to 5.85 percent.
Analysts said investors were wary today of making big moves in the market ahead of the three-day Memorial Day weekend, evident in lighter trading volume than other days this week when the action was more moderate.
Stock prices fell on the latest indication of a slumping economy as the Commerce Department reported today that output for the first three months of this year was weaker than previously estimated. The gross domestic product -- the country's total output of goods and services -- grew at an annual rate of just 1.3 percent in the first quarter, less than the 2 percent rate that the government estimated last month, which raised analysts' and investors' hopes for a rebound.
Today's selling was expected given that the market has been rallying hard since April on investors' hopes that lower interest rates will spur the economy.
Investors' optimism, however, was diminished somewhat today by a speech given last night by Federal Reserve Chairman Alan Greenspan, who told the Economic Club of New York that the worst of the slowdown that has gripped the nation since the second half of 2000 may not be over. However, investors could take some encouragement from Greenspan, who reiterated that the Fed is willing to keep reducing interest rates until the economy starts churning again.
One bright spot came via the University of Michigan's May report on its consumer-sentiment index, which rose to 92 from 88.4 in April, slightly lower than the 92.6 from the preliminary number in mid-May.
Two other reports released today provided fresh evidence of the weak state of the economy. Orders to U.S. factories for costly manufactured goods expected to last at least three years, such as cars, plunged in April by 5 percent, the largest drop since January.
Also, sales of previously occupied homes fell last month by 4.2 percent, the National Association of Realtors said. It was the second decline this year.