Posted at 12:21 p.m., Tuesday, January 22, 2002
Good economic news fails to sway investors
| • | Hawai'i Stocks |
| • | Updated Market Chart |
Associated Press
NEW YORK — A stronger-than-anticipated economic report today failed to impress investors, who instead retreated into the now-familiar pattern of unloading technology stocks as they worried about the timing of a recovery.
The Nasdaq composite index tumbled to its lowest level in two months on concerns that Wall Street's advance last month might have been too much, too soon. Although economic data appears to be more positive, many businesses have yet to forecast a turnaround. Occasional bursts of bargain hunting have helped support the market, but there has been no catalyst for any broad movement.
The Dow Jones industrial average closed down 58.05, or 0.6 percent, at 9,713.80, according to preliminary calculations, despite an earlier advance of 70.
The technology-focused Nasdaq fared even worse as its morning gains deteriorated. It lost 47.79, or 2.5 percent, to 1,882.55 — its lowest close since Nov. 21, when the index finished at 1.875.05.
The Standard & Poor's 500 index dropped 8.27, or 0.7 percent, to 1,119.31.
"It's a little bit disappointing. You had some decent news and the market rose initially, but it wasn't able to stay up," said Robert Harrington, head of listed block trading at UBS Warburg. "People are expecting an economic rebound but I don't think the valuations and fundamentals are there yet. As a result the market has adopted a 'Prove it to me' attitude."
The selloff came despite a report from the Conference Board that its Index of Leading Economic indicators, a key forecasting gauge, rose a strong 1.2 percent in December, the third consecutive monthly gain and a possible signal that the economy could be nearing a rebound.
The December gain was the largest since February 1996 and followed a revised increase of 0.8 percent in November and 0.1 percent in October.
"We continue to get signs from external sources, such as unemployment figures and leading indicators, that the economy is going to improve. But what we're not getting is the companies acknowledging that," said Bill Barker, investment strategy consultant at RBC Dain Rauscher. "That's what's keeping the market off balance."
