Stocks skidded yesterday as investors, concerned about rising prices and the threat of inflation, took profits after last week's three-day...
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 also pressured the market.
The Dow fell 75.37 to 10,766.23.
Microsoft, one of the 30 Dow stocks, fell 9 cents to close at $25.16 a share. Boeing, also a Dow stock, slipped 2 cents to $54.97.
Most Read Stories
- Elizabeth Warren: ‘The next step is single-payer’ health care
- Seattle No. 1 in home-price growth again; starter homes require half of income
- Costco is testing a new burger in Seattle, and it might remind you of Shake Shack
- Zillow vs. McMansion Hell: Seattle company not backing off fight with blog despite PR fiasco
- UW study finds Seattle’s minimum wage is costing jobs
Broader stock indicators also fell. The S&P 500 was down 7.77 at 1,203.60, and the Nasdaq composite index lost 13.68 to 2,051.72.
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 in more than three years.
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 sell-off 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 — home to technology and smaller biotech companies — lagging slightly. Strong earnings and decent economic data helped the Dow industrials and other large-cap stocks 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.
With inflation an issue in many investors’ minds, Wall Street will watch closely as Federal Reserve Chairman Alan Greenspan testifies before the House Budget Committee tomorrow. A number of key economic reports are also due during the week, including the Labor Department’s job-creation report Friday.
“There’s a lot that lies ahead. As a result, a lot of investors are just sort of watching to see how the economic numbers unfold and see what Alan Greenspan says,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. “There’s a lot of crosscurrents today, but overall, the market is waiting for news that still has to be played out this week.”
Analysts at Banc of America Securities downgraded General Motors and rival Ford to “sell” from “neutral,” saying both U.S. automakers would continue to lose market share to European and Japanese rivals. GM, a Dow component, slid $1.23 to $35.66, and Ford lost 35 cents to $12.65.