Dow now at 10,180, down 90 points.
NEW YORK (AP) — Stocks fell moderately Friday as investors
continued a sell-off that began a day earlier over worries about
the pace of the recovery.
Investors are finding little reason to buy. There are no reports
due out that could negate Thursday’s disappointing news that growth
in the domestic economy continues to slow. The Dow Jones industrial
average fell nearly 90 points in afternoon trading, a day after
falling 144. Broader indexes also fell moderately Friday and are on
pace for a losing week.
“We’re not seeing any significant growth prospects,” said Peter
Costa, president of Empire Executions. “Why be in the market if
there’s no (near-term) prospects for growth?”
Oil prices extended their slide on worries that future demand will
wane if economic growth remains tepid. Energy stocks were among the
worst performers on the day, including oil companies Chevron Corp.
and ConocoPhillips.
Overseas markets also fell, reacting to reports Thursday that
initial claims for unemployment benefits in the U.S. rose last week
and manufacturing in the Mid-Atlantic region shrank.
“We’re probably on a continuation from yesterday’s disturbing
claims number,” said Paul Zemsky, head of asset allocation at ING
Investment Management. “There’s really nothing to hang your hat
on.”
Earlier this year, traders were worried Europe’s economy would slow
down so much that it would put a drag on a global recovery. Now,
economic reports are making investors worry that the U.S. economy
will slow worldwide growth.
In afternoon trading, the Dow fell 89.80, or 0.9 percent, to
10,181.41. The Standard & Poor’s 500 index fell 7.89, or 0.7
percent, to 1,067.74, while the Nasdaq composite index fell 9.52,
or 0.4 percent, to 2,169.43.
About three stocks fell for every one that rose on the New York
Stock Exchange, where volume came to 633.5 million shares.
Volume has been exceptionally low in recent weeks, which has added
volatility to the market. But many stock options are expiring
Friday, which could be providing a lift to volume.
Data has shown in recent months that private employers are largely
skittish about hiring new workers because they are unsure how
strong business will be in the coming quarters. That, in turn, has
people worried about their jobs and spending less. But until
spending picks up, unemployment could remain high.
Mark Luschini, chief market strategist at Janney Montgomery Scott,
said companies are also reluctant to hire because of worries about
taxes and government programs like the health care reform passed
earlier this year.
“The uncertainty that exists on regulatory and income taxes has
(employers) in stall mode,” Luschini said. Companies are worried
about whether higher taxes and costs associated to regulation
reform will impact profit margins and cause shoppers to reduce
spending if they are paying more taxes, Luschini said.
The unemployment rate remains at 9.5 percent and analysts widely
agree it needs to fall to lead to a stronger rebound.
In corporate news, Dell Inc. reported a better-than-expected profit
Thursday, due largely to increased technology spending by
businesses. However, sales in its consumer personal computer
division were flat compared with the same quarter last year —
further evidence that shoppers are hesitant to buy new goods.
Hewlett-Packard Co. reported quarterly results that were in line
with preliminary results it released earlier in the month. Its
profit rose 6 percent. Unlike Dell, it had growth in its personal
computer sales.
HP fell $1.07, or 2.6 percent, to $39.69. Dell shares fell 5 cents
to $11.99.
Corporate mergers and acquisitions activity gave stocks a boost
early this week, but has been since overshadowed by weak economic
reports. Mergers and acquisitions activity is usually seen as a
hopeful sign for the economy because it means companies are willing
to spend money, betting that their businesses and the economy will
grow in the coming quarters.
Benchmark crude for October delivery fell $1.15 to $73.62 a barrel
on the New York Mercantile Exchange. Oil prices have steadily
dropped throughout August because of concerns that demand will drop
if the global economic recovery slows.
Chevron fell 87 cents to $74.97. ConocoPhillips dropped $1.30, or
2.4 percent, to $53.41.
Bond prices traded in a tight range. The yield on the 10-year
Treasury note, which moves opposite its price, was unchanged at
2.58 percent compared with late Thursday. Its yield is often used
to help set interest rates on mortgages and other consumer
loans.
Overseas, Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index
dropped 1.2 percent, and France’s CAC-40 fell 1.3 percent. Japan’s
Nikkei stock average fell 2 percent.
