Posted at 11:10 a.m., Thursday, August 9, 2001
Market stalls amid mixed retail sales
• Hawai'i Stocks
• Updated Market Chart
Associated Press
NEW YORK — The stock market ended the session nearly flat today after suffering yet another disappointment — retail sales reports that showed consumers aren't spending at a pace likely to recharge the economy.
Some last-minute buying after a choppy session lifted the major indexes, but ultimately too few investors stepped forward to give stocks any real advance.
"I don't think, in general, that people feel there's a pressing need to put money to work in this market," said Michael Strauss, managing director at Commonfund. "Six to nine months from now things will probably look better, but we just have to get through this, and that's proving difficult."
The Dow Jones industrial average closed up 5.06 at 10,298.56, according to preliminary calculations, barely making a dent in its 165-point loss yesterday.
Broader stock indicators were little changed. The Standard & Poor's 500 index dropped 0.10 to 1,183.42, and the Nasdaq composite index fell 3.04 to 1,963.32.
All three indexes have spent the summer trading in roughly the same narrow range as investors buy stocks on hopes the economy is improving and then sell them when it becomes clear it is not.
Even the six interest rate cuts by the Federal Reserve since January have failed to give Wall Street any lasting inspiration. What's changed, analysts say, is that investors are losing patience waiting for indications that the economy is in fact getting better.
The resulting exasperation has manifested itself in a tendency for investors to move cautiously and sell, rather than buy.
Today, mixed July sales results from the nation's retailers only worsened the market's already foul mood. While consumers are beginning to spend their tax rebate checks, the figures suggested that discounters and lower-priced merchants are most likely to benefit. The results gave Wall Street little hope that consumers, whose spending accounts for two-thirds of the nation's economy, will help business turn around.
Gap fell $1.57 to $25.60 on a 12 percent drop in July sales at stores open a year. Wal-Mart dropped 84 cents to $53.69, after reporting better-than-expected July sales but indicating tougher times might be ahead.
But women's retailer BeBe rose $2.58 to $33.15 on an 11 percent gain in July sales at stores open at least a year.
In the tech sector, Sun Microsystems dropped 49 cents to $16.76, as investors cashed in their profits from news of an alliance with Hitachi that drove the stock up yesterday. Oracle fell 31 cents to $15.99.
Blue chips also struggled. Banker J.P. Morgan Chase lost 18 cents to $41.90, while DuPont fell 12 cents to $41.40.
Still, the broader market managed to hold its ground — a significant accomplishment considering none of the conditions that had caused yesterday's selloff had changed. Those losses were triggered by a Federal Reserve regional survey that showed widespread weakness across the economy and country. A mediocre earnings report from Cisco Systems made matters worse.
"There's a desire to have an idea of what might happen in the near term. The problem is that no one knows what's next," said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels. "I think there's a very high level of frustration out there."
Advancing issues led decliners 8 to 7 on the New York Stock Exchange. Volume came to 1.09 billion shares, behind the 1.11 billion reported yesterday. The Russell 2000 index rose 1.55 to 474.17.
Overseas, Japan's Nikkei stock average dropped nearly 3.4 percent. In Europe, Germany's DAX index slid 1.8 percent, Britain's FT-SE 100 lost 1.3 percent, and France's CAC-40 fell nearly 2.0 percent.
