NEW YORK >> A tepid productivity report gave investors more reasons to sell today, sending stocks moderately lower and carrying the Dow Jones industrials and Standard & Poor's 500 index to levels not seen in nearly four months. Dow, S&P hit
4-month lows
By Hope Yen
Associated PressAnalysts said trading was uneven as investors made short-term bets on whether or when the United States would wage war on Iraq. Tensions with North Korea also pressured the market.
"It's been sloppy and choppy in the last few sessions as speculative trading entered the fray," said Bryan Piskorowski, market commentator at Prudential Securities. "The lackluster productivity figures are definitely not a step in the right direction."
"There's a massive wait-and-see mentality here, not only on Wall Street but Main Street as well," he added.
Declining issues outnumbered advancers more than 2 to 1 on the New York Stock Exchange. Volume was light.
The Dow fell 55.88, or 0.7 percent, to close at 7,929.30, for a three-day loss of 180 points. It was the lowest level seen since Oct. 14, when blue chip stocks finished at 7,877.40.
The broader market finished mixed. The S&P 500 index dropped 5.44, or 0.6 percent, to 838.15, the lowest since Oct. 11, when it closed at 835.32. The Nasdaq composite index inched up 0.23, or 0.02 percent, to 1,301.73. The Russell 2000 index, a barometer of smaller company stocks, fell 2.25, or 0.6 percent, to 364.74.
The price of the Treasury's 10-year note was up 13/32 point, while its yield fell to 3.95 percent from 3.99 percent late yesterday. Two-year Treasury notes were up 1/16 point and yielded 1.61 percent, down from 1.71 percent yesterday.
A pair of mixed economic reports, particularly one showing sluggish productivity, added to the market's foul mood as investors also kept watch over the situation with Iraq.
The Labor Department reported that U.S. companies' productivity fell at an annual rate of 0.2 percent in the final quarter of 2002, the worst showing in more than a year. Economists predicted a 0.7 percent rise.
Separately, the department said new claims for unemployment benefits fell last week by a seasonally adjusted 11,000 to 391,000. That was a turnaround from the previous week when claims rose by 19,000, suggesting the pace of layoffs may be stabilizing though employment remained sluggish.
Analysts say investors remain hesitant to commit to stocks due to concerns about a war with Iraq; that reluctance has fed steep declines in the past three weeks. But they add the market could see some short-term rallies based mostly on bargain-hunting and generally positive earnings news.
"It's only the uncertainties of the Iraqi confrontation that are currently bedeviling the markets," said A.C. Moore, chief investment strategist for Dunvegan Associates, citing recent data showing improvements in profits, as well as the manufacturing and service sectors.
"Should that be a short-term affair and successful business, there could be a very strong lift to stocks from current levels," he said.
Overseas, Japan's Nikkei stock average finished 0.8 percent lower. In Europe, France's CAC-40 fell 1.7 percent, Britain's FTSE 100 dropped 2.2 percent and Germany's DAX index slid 2.8 percent.
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