Kitsap Business and Economy

Dow now at 9,564, up 21 points

NEW YORK (AP) — Investors are putting the brakes on the market’s recent rally despite more signs that the economy might be stabilizing.
Stocks fell Thursday, but were off their lows at midday, after a seven-day winning streak sent the Dow Jones industrials to another high for 2009 the day before. The declines were wide-ranging, with the sharpest losses in energy, technology and health care stocks.
Analysts say the market has been running out of reasons to move higher and is now looking for more convincing signs of recovery in the economy before resuming its upward march.
“Some would argue the market is a little bit ahead of itself,” said Jim Herrick, director of equity trading at Baird & Co.
The latest economic data failed to excite investors. The Labor Department said first-time jobless claims fell 10,000 last week to 570,000, just shy of economists’ expectations for 565,000.
Workers continuing to file for benefits, however, fell more than expected, declining to 6.13 million from 6.25 million in the previous week. It was the lowest level for continuing claims since early April.
Meanwhile, a Commerce Department report showed the nation’s economy shrank at a 1 percent annualized rate in the second quarter. The updated figure was unchanged from an earlier, preliminary reading on the nation’s gross domestic product, which measures the value of all goods and services produced within the U.S. Economists were expecting GDP to be revised to a 1.5 percent decline.
The Dow fell 6.65, or 0.1 percent, to 9,536.87, after earlier falling as much as 84 points. The Standard & Poor’s 500 index fell 4.96, or 0.5 percent, to 1,023.16, while the Nasdaq composite index fell 18.08, or 0.9 percent, to 2,006.35.
About three stocks fell for every one that rose on the New York Stock Exchange, where volume came to a light 600.4 million shares, compared with 548.1 million at the same time on Wednesday.
Volume has been extremely light as many traders take vacations, adding to the market’s recent choppiness. Trading has been erratic even amid data showing improvements in housing and consumer confidence. Investors are worried about extending the market’s impressive spring and summer rally, in which stocks have risen more than 45 percent off of 12-year lows since early March.
Analysts say temporary pullbacks are healthy for the market and provide buying opportunities for investors who have yet to jump back in after the devastating selling of last fall and early this year.
“There is just too much cash sitting on the sidelines,” said Phil Orlando, chief equity market strategist at Federated Investors. “You get one of these four or five percent moves down and suddenly you get a surge of money in stocks.”
On Thursday, energy stocks fell as oil prices slid 49 cents to $70.94 a barrel on the New York Mercantile Exchange.
Gains in some troubled financial stocks helped to offset the market’s losses. Shares of American International Group Inc. surged 23 percent, rising $8.74 to $46.43. CIT Group Inc. jumped 11 percent, adding 14 cents to $1.41.
Boeing Co. rose after saying its long-delayed 787 aircraft will be ready for its first flight by the end of this year. Shares jumped $4.03, or 8.4 percent, to $51.85.
Bond prices were little changed following a strong auction of seven-year notes.
The yield on the benchmark 10-year Treasury note rose to 3.45 percent from 3.44 percent late Wednesday.
Elsewhere in corporate news, luxury homebuilder Toll Brothers Inc. said it lost $472.3 million in its fiscal third quarter due to a tax-related allowance and a write-down. Toll Brothers would have been profitable had it not been for the charges. The company has said there are signs of improvements in some markets.
Shares fell 19 cents to $22.95. Other homebuilders also fell after recent gains. DR Horton Inc. fell 39 cents, or 2.8 percent, to $13.40.
In other trading, the Russell 2000 index of smaller companies fell 7.30, or 1.3 percent, to 576.72.
The dollar was mixed against other major currencies, while gold prices inched higher.
Overseas, Asian stocks fell after China said it would cut investment in some industries. Japan’s Nikkei stock average lost 1.6 percent, while China’s main index fell 0.7 percent.
Britain’s FTSE 100 fell 0.4 percent, Germany’s DAX index fell 0.9 percent, and France’s CAC-40 lost 0.5 percent.

This entry was posted on Thursday, August 27th, 2009 at 10:11 am by Rachel Pritchett and is filed under Uncatagorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.