NEW YORK >> Investors already edgy about the economy got new reasons to sell stocks today with the release of four disappointing economic reports. Ongoing worries about a potential war with Iraq and what it might do to the economy depressed the market further. Economic news
hits stocksBy Amy Baldwin
Associated PressAnalysts said investors were particularly unnerved by a jump in energy prices, fearing that costs will go up even more if there is a war with Iraq.
"People are unwilling to invest and make commitments until we get clarity on Iraq," said Brian Bush, director of equity research at Stephens Inc.
Declining issues outnumbered advancers about 7 to 6 on the New York Stock Exchange, where trading was extremely light as many investors chose to stay on the sidelines. The Dow Jones industrial average closed down 85.64, or 1.1 percent, at 7,914.96.
The broader market also pulled back. The Nasdaq composite index declined 3.09, or 0.2 percent, to 1,331.23. The Standard & Poor's 500 index fell 8.03, or 1 percent, to 837.10. The Russell 2000 index fell 0.54, or 0.2 percent, to 359.74.
The price of the Treasury's 10-year note was up 3/16 point, while its yield fell to 3.86 percent from 3.89 percent late yesterday. The price of two-year Treasury notes was unchanged. Their yield fell to 1.58 percent from 1.59 percent yesterday.
A string of downbeat economic reports pulled the market lower. First, the United States recorded a $435.2 billion trade deficit for 2002, the largest imbalance in history, as the weak global economy hampered American exports while imports of autos and other consumer goods reached record highs.
And the Labor Department reported that inflation at the producer, or wholesale, level jumped 1.6 percent in January, the biggest increase in 13 years, led by a 4.8 percent spike in energy costs.
The government also said the number of newly laid off workers filing unemployment claims jumped to a seven-week high of 402,000 last week, up by 21,000 from the previous week.
In the fourth report, the Conference Board said a key gauge of future economic activity declined in January, breaking from three straight months of gains. The industry group reported that its Index of Leading Economic Indicators slipped by 0.1 percent in January from a month ago at a revised 111.2, which was analysts had expected.
"Iraq is essentially a wet blanket over the economy at this point," said Kevin Caron, market strategist, Ryan, Beck & Co. LLC. "When you get a slightly higher-than-expected jobless claims number and a rise in producer prices because of oil, there is some concern about the economy."
Target fell $1.10 to $26.77 after meeting fourth-quarter earnings expectations but reporting smaller-than-anticipated revenue. The retailer also said same-store sales, those at stores open at least one year, fell 2.2 percent in the last three months of 2002.
Skechers U.S.A. dropped $1.91 to $6.09 after the maker of trendy footwear reported a fourth-quarter loss of 23 cents a share, more than the 21 cents analysts anticipated.
Overseas, Japan's Nikkei stock average finished down 0.3 percent. In Europe, France's CAC-40 fell 1.9 percent, Britain's FTSE 100 rose 0.8 percent and Germany's DAX index declined 1.3 percent.
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