Housing Report Ends Market's Recovery
Stocks resumed their steep slide today as investors digested a better-than-expected home sales report that still showed continued weakness, and as traders squared their portfolios ahead of the three-day holiday weekend. The Dow Jones industrials fell more than 100 points.
The National Association of Realtors said existing home sales fell 1%last month. That's better than analysts' forecast of a 1.6% decline, but the news was still unwelcome to a market nervous about the continuing housing slump and the impact of the rising price of oil on consumers.
Meanwhile, rising oil prices also weighed on stocks. A barrel of oil is up $2.36 at $133.17 on the New York Mercantile Exchange. Oil prices are set for a third weekly gain after surging to a record $135.09 a barrel YESTERDAY. Investors are buying on the belief that supply can't keep up with growing global demand from countries like China and India.
Many traders took TODAYoff before the long holiday weekend, and lighter volume contributed to more volatile movements in stocks and the major indexes.
In midmorning trading, the Dow fell 116.59, or 0.92%, to 12,509.03.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 16.02, or 1.15%, to 1,378.33, and the Nasdaq composite index fell 25.89, or 1.05%, to 2,438.69.
The economic fallout from higher energy prices remained Wall Street's focus this week. Stocks rose moderately yesterday after two sessions of steep declines, with the Dow recording its biggest two-day loss since late February.
Despite the declines of more than 2% in the major indexes this week, stocks are off their mid-March lows. The Dow is still up 7.5% from its close of 11,740.15 on March 10.
Bond prices edged higher. The yield on the benchmark 10-year Treasury note, which moves opposite its yield, fell to 3.87% from 3.92%late yesterday.
The dollar was mostly higher against other major currencies, and gold was also higher.
In corporate news, Gap Inc. reported late Thursday that first-quarter profit surpassed Wall Street projections. The retailer said it boosted profit by 40% by better managing inventory and cutting costs. Gap fell 44 cents, or 2.4%, to $17.85.
There was also deal talk going into the holiday weekend. Halliburton Co., the world's second-largest oilfield services company, made a $3.4 billion bid to acquire British rival Expro International Group. Halliburton rose 49 cents to $48.77.
Yahoo Inc. late yesterday said in regulatory filing that it pushed its annual shareholders meeting to an undetermined date in late July. The move was seen giving the Internet portal more time to prepare a defense — or negotiate a sale to Microsoft Corp. Yahoo fell 22 cents to $27.31, while Microsoft fell 37 cents to $28.10.
American Axle and Manufacturing Holdings Inc. fell 47 cents, or 3.2%, to $18.78 after the company said late yesterday that workers approved a new contract including pay cuts and other concessions. The vote ends a strike that lasted nearly three months, hurting General Motors Corp.'s production of large sport utility vehicles and pickup trucks. Although the contract's ratification will benefit GM, auto stocks have been under pressure this week because of soaring fuel prices.
In overseas trade, Tokyo's Nikkei closed rose 0.24%. In Europe, London's FTSE dropped 0.28%, Frankfurt's DAX fell 0.35%, and Paris' CAC 40 shed 0.79%.
