Dow Down 88, Nasdaq Falls 3 on Reports
Feb. 20, 2003
NEW YORK (AP) _ Investors edgy after the release of downbeat economic reports sent stocks lower Thursday, extending losses from the previous session. Ongoing worries about a potential war with Iraq and what it might do to the economy also weighed on the market.
``People are unwilling to invest and make commitments until we get clarity on Iraq,'' said Brian Bush, director of equity research, Stephens Inc.
In midafternoon trading, the Dow Jones industrial average was down 88.44, or 1.1 percent, at 7,912.16, having lost 40.55 on Wednesday.
The broader market also pulled back. The Nasdaq composite index declined 2.59, or 0.2 percent, to 1,331.73. The Standard & Poor's 500 index fell 6.87, or 0.8 percent, to 838.26.
A string of disappointing economic reports pulled the market lower. First, the United States recorded a $435.2 billion trade deficit for 2002, the largest imbalance in history, as the weak global economy hampered American exports while imports of autos and other consumer goods reached record highs.
And the Labor Department reported that inflation at the producer, or wholesale, level jumped 1.6 percent in January, the biggest increase in 13 years, led by a 4.8 percent spike in energy costs.
The government also said the number of newly laid off workers filing unemployment claims jumped to a seven-week high of 402,000 last week, up by 21,000 from the previous week.
In a fourth economic report, the Conference Board said a key gauge of future economic activity declined in January, breaking from three straight months of gains. The industry group reported that its Index of Leading Economic Indicators slipped by 0.1 percent in January from a month ago at a revised 111.2, which was analysts had expected.
``Iraq is essentially a wet blank over the economy at this point,'' said Kevin Caron, market strategist, Ryan, Beck & Co., LLC. ``When you get a slightly higher-than-expected jobless claims number and a rise in producer prices because of oil, there is some concern about the economy.''
Investors have been fretting that a war with Iraq would prompt consumers and businesses to further clamp down on spending, derailing what's already been a slow economic recovery.
Among Wall Street's losers, Target fell 97 cents to $26.90 after meeting fourth-quarter earnings expectations but reporting a smaller-than-anticipated revenue. The retailer also said same-store sales, those at stores open at least one year, fell 2.2 percent in the last three months of 2002.
Skechers U.S.A. dropped $1.20 to $6.80 after the maker of trendy footwear reported a fourth-quarter loss of 23 cents a share, more than the 21 cent loss analysts anticipated.
Kellogg fell $1.20 to $30.02 after Credit Suisse First Boston downgraded it to ``neutral'' from ``outperform.''
There were some gainers, including J.C. Penney, which rose 69 cents to $19.12 after releasing fourth-quarter earnings that surpassed Wall Street's forecast.
Declining issues outnumbered advancers 4 to 3 on the New York Stock Exchange. Trading was light at 744.15 million shares, but ahead of 675.92 million at the same point Wednesday.
``No one is going to make a bet in this market until we think we are close to a resolution in Iraq. That is what you are seeing in the weak volume,'' said Stephens' Bush.
The Russell 2000 index, the barometer of smaller company stocks, fell 0.67, or 0.2 percent, to 359.61.
Overseas, Japan's Nikkei stock average finished Thursday down 0.3 percent. In Europe, France's CAC-40 fell 1.9 percent, Britain's FTSE 100 rose 0.8 percent and Germany's DAX index declined 1.4 percent.
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