Cautious consumers
weigh down stocks

NEW YORK » Stocks sagged yesterday as sliding consumer confidence trumped the latest report on the nation's gross domestic product, which grew at a faster pace than expected. Still, the major indexes ended November with their best monthly performance for the year.

After a modest opening weekend to the holiday shopping season, a fourth straight monthly decline in consumer confidence was the last thing investors wanted to see. But analysts weren't overly alarmed by the selling, noting that it seemed relatively controlled and was typical of the sort of pause stocks often see after Thanksgiving and ahead of the seasonally strong month of December.

"We don't like to see consumer confidence reduced as we go into the Christmas holiday season, but going by what we saw from sales over the weekend, we think sales will be pretty good," said Alfred E. Goldman, chief market strategist with A.G. Edwards & Sons. "December has been a strong month for the market historically, with its Santa Claus rally ... but late November and early December is often a period when you see a pause to refresh."

The Dow Jones industrial average was down 47.88, or 0.46 percent, at 10,428.02, slipping back into negative range for the year.

The broader gauges were also lower. The Standard & Poor's 500 index shed 4.75, or 0.40 percent, to 1,173.82. The Nasdaq composite index fell 10.06, or 0.48 percent, to 2,096.81.

Despite the day's lackluster trading, November turned out to be a great month for stocks, with the Dow posting a 3.99 percent advance, the S&P adding 3.86 percent and the Nasdaq surging 6.17 percent. It was the best monthly gain of the year for all three indexes.

Brisk consumer and business spending helped the nation's GDP grow at an annual rate of 3.9 percent during the third quarter, stronger than previously thought. U.S. exports, buoyed by a weaker dollar, also contributed to the overall economic growth.

But consumer sentiment didn't match the bullish GDP data. The Conference Board's index of consumer confidence registered a fourth consecutive decline, reflecting doubts about the economy in the months ahead. The index fell to 90.5 from a revised reading of 92.9 in October; analysts expected a reading of 96.0 for November.

Analysts are also keeping an eye on the impact high energy prices are having on economic activity. Oil prices hit a record high of just over $55 a barrel in late October, but have hovered near the $50 range recently.