Posted on: Tuesday, March 1, 2005
Inflation worries add to pressures on market
By Michael J. Martinez
Associated Press
NEW YORK — Stocks skidded yesterday as investors, concerned about rising prices and the threat of inflation, took profits after last week's three-day rally. Volatility in pharmaceutical stocks and an analyst downgrade of Dow Jones industrial General Motors Corp. also pressured the market.
Rising oil prices were also a concern, as a barrel of light crude settled at $51.75, up 26 cents, on the New York Mercantile Exchange. The confluence of news, along with nervousness about a raft of important economic data due later in the week, triggered the slide.
"When you have the (Standard & Poor's 500 index) up three days in a row like we had last week, you'll definitely see some money coming off the table," said Neil Massa, equity trader at John Hancock Funds. "It's a broad selloff here, not just one sector, and the money's not being put to use anywhere. So I think folks are just waiting for later in the week."
Despite persistent inflation fears and rising oil prices, stocks were mostly higher for the month, with only the Nasdaq lagging slightly.
Strong earnings and decent economic data helped the Dow industrials and other large-cap stocks to post gains after a disappointing January. For the month, the Dow was up 2.63 percent and the S&P 500 gained 1.89 percent, while the Nasdaq lost 0.52 percent.
Declining issues outnumbered advancers by about 8 to 5 on the New York Stock Exchange, where preliminary consolidated volume came to 2.32 billion shares, compared with 1.92 billion on Friday.
Fresh worries about inflation arose after the Commerce Department's latest reading on consumer income and spending. Personal income fell less than expected in January, but spending was flat and core consumer prices rose 0.3 percent — the fastest rate in more than three years.
