Wall Street began a holiday-shortened week cautiously today, slipping as investors reacted to a bleak outlook from Toyota Motor and disappointing...
NEW YORK — Wall Street began a holiday-shortened week cautiously today, slipping as investors reacted to a bleak outlook from Toyota Motor and disappointing earnings from drugstore operator Walgreen.
The two companies — both viewed as better-positioned than many of their peers — provided more evidence that even stronger companies are struggling with dropping consumer demand.
The Dow Jones industrial average closed down 59.42, or 0.7 percent at 8,519.69, after dropping nearly 207 points in late-afternoon trading. Broader market indexes also closed lower. The Standard & Poor’s 500 index was off 16.25, or 1.8 percent, at 871.63, and the technology-heavy Nasdaq composite index was down 31.97, or 2 percent, at 1,532.35.
Walgreen’s profit fell 10 percent in its fiscal first quarter, due mostly to the costs of opening more than 200 new stores, so the company said it will slow its expansion because of the recession.
Most Read Business Stories
- FAA safety engineer goes public to slam the agency's oversight of Boeing's 737 MAX
- MacKenzie Scott marries Seattle teacher after Bezos divorce
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- Microsoft’s $10 billion Pentagon deal at risk amid Amazon fight
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
Toyota, meanwhile, slashed its earnings forecast for a second time, warning that it now expects to report an operating loss for the fiscal year through March. It would be the Japanese automaker’s first such loss since it began reporting results in 1941, and underscores the challenges facing car companies. Toyota’s American rivals, General Motors and Chrysler, received a $17.4 billion lifeline from the federal government on Friday to stave off bankruptcy.
The gloomy corporate news today highlighted how weak the consumer is, said Kim Caughey, equity research analyst at Fort Pitt Capital Group. That’s a troubling prospect, she said, because it appears the U.S. economy cannot rely on consumer spending to pull it out of its downturn.
Because trading volumes were very low, and likely to stay that way throughout the week, the market’s movements may not be indicative of its long-term direction.
“A truncated week is going to make it tough to generate any firm take-aways from trading,” said Craig Peckham, equity trading strategist at Jefferies & Co. “I would expect to see sleepy volumes and a lot of people protecting positions going into year end.”
Tax-loss selling — when investors sell securities at a loss to offset a capital-gains tax liability — might also contribute to the market’s weakness until the year’s end, Fort Pitt’s Caughey noted.