Stocks End an Erratic Day with Lopsided Loss
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Wall Street ended an erratic day today with a lopsided loss, as blue chip stocks bore the brunt of investors’ concerns over the health of the financial sector. The Dow Jones industrials fell more than 100 points, but the other major indexes finished with single-digit losses.
High-tech and small-cap stocks fared better than the broader market, proof that investors were wary and choosy. The market started the day disappointed by the government’s retail sales report, and a jump in oil prices further dampened the market’s mood.
With many investors on vacation, and therefore fewer people trading, price moves were exaggerated.
“We’re in that part of the summer where volume tends to be light, conviction tends to be minimal,” the chief investment officer at Ryan Beck & Co, Joseph V. Battipaglia, said.
The Commerce Department said retail sales slipped 0.1% as rising prices helped offset the effect of economic stimulus payments to American households. Excluding a big drop in sales of automobiles, retail sales rose 0.4%. But even on that basis it was the weakest showing in five months.
Wall Street had expected sales to remain flat after a minor increase in June. The report followed a warning from department store bellwether Macy’s Inc. that its full-year profits would fall short of expectations because of slower sales.
The retail numbers pointed to a consumer who remains uneasy about spending. And because consumers’ spending accounts for more than two-thirds of the economy, the fear on Wall Street is that the nation is in for a prolonged period of slow or even no growth.
The advance in oil prices also tinged investor sentiment. Light, sweet crude rose $2.99 to $116 a barrel on the New York Mercantile Exchange after the government said American crude supplies fell unexpectedly last week.
Financials, which are well-represented in indexes like the Dow, were weak, but other sectors bounced back from their lows earlier in the day.
According to preliminary calculations, the Dow fell 109.51, or 0.94%, to 11,532.96 after falling more than 150 points earlier in the session and just under 140 points yesterday.
The Standard & Poor’s 500 index slipped 3.76, or 0.29%, to 1,285.83, while the Nasdaq composite index fell 1.99, or 0.08%, to 2,428.62.