Star-Bulletin news services
Durable goods drop
drags down stocks
NEW YORK >> A larger-than-expected drop in durable goods orders intensified Wall Street's concerns about the economy yesterday and sent stocks sliding for the second straight day. Technology issues again suffered the largest declines.
Investors are worried that after six months of rallies, stocks have climbed too high given a still questionable economic recovery.
"There is doubt at these levels ... that we have further gains this year. We are now looking for reasons to justify our worry," said Brian Pears, equity trader at Victory Capital Management in Cleveland.
But Pears also said investors' desire to own stocks outweighs the temptation to sell.
The tech-dominated Nasdaq composite index closed down 26.46, or 1.4 percent, at 1,817.24. On Wednesday, the Nasdaq dropped 58.02, its largest one-day point loss since July 1, 2002.
The market's other gauges also pulled back, having just suffered their biggest losses in just over four months, or since May 19. The Dow Jones industrial average fell 81.55, or 0.9 percent, to 9,343.96, having dropped 150.03 Wednesday. The Standard & Poor's 500 index declined 6.11, or 0.6 percent, to 1,003.27, having shed 19.67 in the previous session. The Russell 2000 index tumbled 12.80, or 2.5 percent, to 495.06.
Declining issues beat advancers more than 2 to 1 on the New York Stock Exchange. Consolidated volume totaled 1.96 billion shares, just below 1.97 billion on Wednesday.
The NYSE composite index lost 32.99, or 0.6 percent, to 5,679.63. The American Stock Exchange composite index slipped 1.66, or 0.2 percent, to 998.04.
The two-year Treasury note was unchanged at 99 3032, with its yield rising one basis point to 1.65 percent. The 10-year note gained 832 to 101 632, with its yield falling 3 basis points to 4.10 percent.
Investors were extending Wednesday's huge sell-off, sparked by a surprising decision by OPEC to cut oil production target by 3.5 percent beginning in November.
The Commerce Department issued disappointing economic data showing demand for durable goods dropped by a sizable 0.9 percent in August, raising doubts about the manufacturing sector's delicate recovery. The decrease in new orders for durable goods, items including cars and home appliances expected to last at least three years, was the first and largest decline in four months and bigger than the 0.5 percent dip economists anticipated.
Manufacturers fell on the drop in durable goods orders. Dow industrial Caterpillar Inc. $1.54 to $68.90 and Ford Motor Co. declined 11 cents to $11.15.
In a second report, new applications for jobless benefits fell last week by a seasonally adjusted 19,000 to 381,000, a seven-month low, the Labor Department said.
STOCK QUOTES/CHARTS/DATA
