Consumer confidence report frustrates market
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By Lisa Singhania
Associated Press
NEW YORK — A weaker-than-expected consumer confidence report gave Wall Street another reason to sell today, intensifying a pullback that began with investors cashing in recent profits.
Selling pressure persisted for much of the day — a reflection of doubts that the worst is truly over for stocks. Analysts said investors, fearful that the market will fall back again, aren't willing to leave themselves too exposed.
The Dow Jones industrial average closed down 110.15, or 1.1 percent, at 9,872.60, according to preliminary calculations, after dropping as much as 151 points earlier in the session.
Broader stock indicators also struggled. The Standard & Poor's 500 index slipped 7.92, or 0.7 percent, to 1,149.50, while the Nasdaq composite index lost 5.26, or 0.3 percent, to 1,935.97.
"We've had a very strong move upward in the market since Sept. 21 and a pullback was almost overdue," said Hugh Johnson, chief investment officer at First Albany Corp. "The consumer confidence data was more of a disappointment than a surprise and was the catalyst or excuse for some profit taking."
Stocks, already in a mild retreat, fell sharply this morning when the Conference Board reported its index of consumer confidence fell to 82.2 in November from 85.3 the previous month. Analysts had been predicting 86.5.
The index is closely watched because consumer spending accounts for two-thirds of the economy. A report of stronger-than-expected October sales of existing homes by the National Association of Realtors failed to reassure the market.
"I don't think it takes a whole lot right now to turn sentiment more toward caution than being aggressive," said Richard A. Dickson, technical analyst at Hilliard Lyons. "With the extent of the rally we've had, it doesn't take a lot for people to say it's not a bad idea to book some profits."
Still, selling appeared to stabilize somewhat late in the day. Technology stocks, which have enjoyed a particularly noticeable advance in the last few sessions, regained ground after a rocky start. Intel recovered from an early loss to rise 44 cents to $32.31 after Dow Jones News Service said the company's chief financial officer indicated Intel expects to meet forecasts for the current quarter.
Halliburton rose 90 cents to $21.86 as part of a broader sector move on concerns that oil supplies might be affected by the latest dispute between the United States and Iraq.
But Nokia dropped $1.52 to $23.72 after the telecommunications company said sales in the first quarter of 2002 will likely fall from year-earlier levels, although 2002 sales should increase by 15 percent.
Kmart dropped 47 cents to $6.38, after beating Wall Street's earnings expectations, but reporting its third-quarter losses tripled from a year ago.
Declining issues led advancers on the New York Stock Exchange. Volume came to 1.28 billion shares, compared with 1.08 billion Monday.
The Russell 2000 index lost 0.51 to 460.71.
