NEW YORK >> Wall Street struggled through an ambivalent session today, with investors hoping to start a rally but ultimately selling on downbeat news from Home Depot. Market frets
over retailBy Amy Baldwin
Associated PressWith economic and profit recoveries not yet assured, investors were mostly inclined to lock in some profits from a six-week rally for blue chips and five-week upturn for the rest of the market. Home Depot's disappointing sales and a weak fourth-quarter outlook raised questions about the strength of consumer spending.
"Clearly, the focus is on the economy. The question investors have is: Will the economy continue to grow in 2003 or will we have another sinking spell," said Hugh Johnson, chief investment officer at First Albany Corp. "It seems every day we have some news that says the economy is doing well and at the same time other news that says the economy is struggling."
Declining issues outnumbered advancers 5 to 4 on the New York Stock Exchange. Trading volume was light.
The Dow Jones industrial average closed down 11.79, or 0.1 percent, at 8,474.78, for a two-day loss of more than 100 points. Earlier in the session, the Dow fell as much as 81.45 and rose as much as 60.27.
The broader market was also lower for a second day. The Nasdaq composite index fell 19.18, or 1.4 percent, to 1,374.51. The Standard & Poor's 500 index declined 3.62, or 0.4 percent, to 896.74. The Russell 2000 index, which tracks smaller company stocks, fell 3.01, or 0.8 percent, at 379.57.
The price of the Treasury's 10-year note was up 3/32 point, its yield fell to 3.99 percent from 4 percent yesterday. Two-year Treasury note prices were unchanged, leaving their yield at 1.87 percent.
Earlier in the session, the market attempted to build on weeks of rallies that were based largely on surprisingly strong third-quarter profits.
But the market was hampered by Dow industrial Home Depot, which dropped $3.64 to $24.96 after saying fourth-quarter earnings will miss analysts' expectations. While third-quarter profits match forecasts, the company said same-store sales -- those at outlets open at least a year, considered the best gauge of a retailer's strength -- declined by 2 percent.
Rival retailer Lowe's got some backlash from Home Depot's news and fell $1.72 to $38.98.
Investors have been sensitive to bad news from retailers because consumer spending accounts for two-third of the economy.
"The one thing we have been convinced about is the strength of the consumer. When we have a marquee company like Home Depot giving slightly downward guidance, it gives us the fear that the U.S. consumer is running out of steam," said Arthur Hogan, chief market analyst at Jefferies & Co.
Technology was hurt by a downgrade of Microsoft, down $1.17 at $54.68, by brokerage house Raymond James. And Amazon.com fell $1.13 to $21.28 on a downgrade from Bear Stearns.
Overseas, Japan's Nikkei stock average finished up 0.2 percent. In afternoon trading in Europe, France's CAC-40 fell 1 percent, Britain's FTSE 100 lost 0.5 percent and Germany's DAX index declined 0.4 percent.