Wall Street finished a disappointing week lower yesterday as a sharp drop in oil prices failed to ease worries about declining consumer...
NEW YORK — Wall Street finished a disappointing week lower yesterday as a sharp drop in oil prices failed to ease worries about declining consumer confidence.
The Dow Jones industrial average declined 53.34 to 10,397.29, the index’s lowest close in more than seven weeks.
Microsoft, one of the 30 Dow stocks, slipped 6 cents yesterday to close at $26.97 a share, ending up 0.9 percent for the week. Boeing, also a Dow stock, fell 90 cents yesterday to $66.31, down 1.3 percent for the week.
The broader stock indicators also headed lower. The Standard & Poor’s 500 index fell 7.29 to 1,205.10, and the Nasdaq composite index dropped 13.60 to 2,120.77.
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For the week, the Dow lost 1.5 percent, the S&P dropped 1.2 percent and the Nasdaq fell 0.7percent.
Crude-oil futures slid from their record highs earlier this week as it became clearer that Hurricane Katrina was unlikely to disrupt U.S. refineries in the Gulf of Mexico. A barrel of light crude settled at $66.13, down $1.36, on the New York Mercantile Exchange.
Yet there may be little reason for oil prices to drop substantially lower in the near term, and one analyst said the market could be headed still lower as a result.
“Right now, for the short term, the market is probably going to continue on this path for a little bit,” said Arthur Hogan, chief market analyst at Jefferies. “Unless we get some dissipation of headwinds facing the market, we have a tough running ahead.”
Wall Street was rattled at the start of yesterday’s session after the University of Michigan reported August’s consumer sentiment index at 89.1, down from a July reading of 96.5 and well below economists’ expectations of 92.5.
Some analysts said the drop in consumer confidence was not unexpected, with higher gas prices eating into shoppers’ disposable income. Although the market held fast as energy prices climbed earlier this summer, the growing impact has weighed on the market in recent weeks amid light summer trading volume.
Investors also mulled cautionary comments from Federal Reserve Chairman Alan Greenspan, who warned that stalled trade negotiations and bloated budget deficits could threaten the United States’ long-term vitality. The Fed chief also gave a grim outlook for the economy as it nears the end of a period of sustained low interest rates, saying that while rising stock and home prices have driven spending in recent years, the perceived wealth could evaporate in the face of a rapid economic downturn.
“I guess today’s one-liner that put a spook in the market had to do with stock and real-estate valuation,” Hogan said. Hogan added that while Greenspan’s statement was not too alarming, he thinks it “definitely … had a negative impact on the market.”