Star-Bulletin news services
Iraq, Turkey attacks
prompt investor jitters
NEW YORK >> Stocks shifted lower yesterday as investors' enthusiasm flagged in the face of multiple attacks overseas, weak sales of manufactured goods and a lower forecast from AT&T Corp.
A record reading on home sales for May was a bright spot, suggesting continued economic strength. But violence in Iraq and a pair of bomb blasts in Turkey, including one near a hotel where President Bush is expected to stay ahead of Monday's NATO summit, caused some jitters. Still, the lack of a deeper slide was encouraging to analysts.
"The bombing in Istanbul certainly raises more risk concern, and that could be what's keeping us flat today," said Kevin Caron, market strategist with Ryan, Beck & Co. "Beyond that, there are important fundamental drivers -- a robust profit expansion, companies with record levels of cash balances, creating new jobs -- that provide a solid underpinning to the nation's economic recovery."
The Dow Jones industrial average sagged 35.76, or 0.3 percent, to 10,443.81.
The broader gauges were also lower. The Nasdaq composite index was down 5.41, or 0.3 percent, at 2,015.57. The Standard & Poor's 500 index shed 3.41, or 0.3 percent, to 1,140.65.
The price of the Treasury's 10-year note closed up 716 point, while its yield fell to 4.64 percent from 4.70 percent yesterday. Two-year Treasury notes rose 116 point and yielded 2.68 percent, down from 2.73 percent yesterday.
The markets have been in a torpor all month ahead of a pivotal Federal Reserve meeting on interest rates and the hand-over of sovereignty in Iraq next week. A coordinated series of attacks in the country, mostly directed at Iraqi security forces, raised further doubts about the likelihood of a smooth transition.
Adding to investors' uncertainty, the Commerce Department reported that orders for costly manufactured goods slipped for a second straight month -- a sign that the economic recovery, while strong, remains somewhat uneven. For those fearing inflation and the accompanying interest rate hikes, the report could be seen as good news, as demand for big-ticket items could be flagging.
Also yesterday, the number of new people signing up for unemployment benefits rose last week by a seasonally adjusted 13,000 to 349,000, the Labor Department said. At least some of the gain was attributed to filing delays following the June 11 closure of government offices in observance of former President Reagan's death.
Neither the jobless claims number nor the durable goods reading matched expectations. Bond prices rose, the dollar fell, and gold was up.
"In this environment of low volumes, economic data can have big impact," said Arnie Holzer, senior investment strategist with Deutsche Asset Management.
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