Stocks fall again despite
upbeat Amazon outlook

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By Amy Baldwin
Associated Press

NEW YORK >> Lower prices and a bright outlook from Amazon.com failed to sustain what had been a respectable rally on Wall Street today, and prices ended up falling for the third straight day.

It was also the market's fifth losing session in the last six. Stocks have been hard-pressed to hold on to gains amid generally lackluster earnings reports and disappointing forecasts.

"Investors just need more to be convinced. We need to see the scales tipping to profit recovery," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "Right now, we are kind of balanced between optimism about recovery and fears of backsliding back into recession."

The Dow Jones industrial average closed down 58.81, or 0.6 percent, at 10,030.43, giving back an earlier advance of 74.18, according to preliminary calculations. The Dow, which dropped 167 points the previous two sessions, yesterday hit its lowest close since Feb. 22 when it stood at 9,968.15.

The broader market followed the same path as the blue chips. The Nasdaq composite index fell 16.95, or 1.0 percent, to 1,713.34, having risen 16.23 earlier. The Standard & Poor's 500 index declined 7.82, or 0.7 percent, to 1,093.14 after advancing 7.50.

Declining issues led advancers slightly more than 8 to 7 on the New York Stock Exchange. Volume was relatively light. The NYSE Composite Index fell 3.17 to 581.13. The American Stock Exchange Composite Index dropped 1.44 to 923.26. The Russell 2000 index, which tracks the performance of smaller company stocks, fell 2.97, or 0.6 percent, to 507.32.

Prices on the 2-year Treasury bond rose 5/32 to 100 23/32, while its yield fell 9 basis points to 3.23. The price of the 10-year Treasury note rose 12/32 to 98 6/32, with its yield falling 5 basis points to 5.11. The price of the 30-year note rose 21/32 to 96 20/32; its yield fell 5 basis points to 5.61.

Kleintop attributed the late-day selloff to weak money flows from mutual fund investors, who account for many of Wall Street's largest trades. By late afternoon, institutional investors, including those who buy for mutual funds, didn't have "the fuel to go out there and buy stocks," he said.

While there was good earnings news, including that of Amazon, to hearten traders, analysts said much of the earlier upturn was based largely on lower prices following the recent selloff. For a certifiable rally, more companies must produce upbeat outlooks and profits.

"The market remains in a very nervous state. Investors are not willing to rush in. That's what this is all about," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc. "The missing link for a sustained rally is earnings growth."

The market's losses were spread across a variety of sectors. Microsoft fell 97 cents to $53.02, Citigroup stumbled 80 cents to $44.70, and Wal-Mart declined 60 cents to $57.45.

Overseas, Japan's Nikkei stock average finished today down 0.5 percent. In Europe, France's CAC-40 fell 0.8 percent, Germany's DAX index declined 0.6 percent, while Britain's FT-SE 100 rose 0.5 percent.