Wall Street sank in volatile trading today after the government confirmed that the last quarter of 2007 did indeed see a sharp economic...
NEW YORK — Wall Street sank in volatile trading today after the government confirmed that the last quarter of 2007 did indeed see a sharp economic slowdown.
For the second straight session, the Dow Jones industrial average fell more than 100 points, giving up 120.40 today to close at 12,302.46. The index dropped nearly 110 points Wednesday.
Microsoft, one of the 30 Dow stocks, declined 51 cents today to close at $28.05 a share. Boeing, also a Dow stock, fell $2.08 to $74.22.
Broader stock indicators also fell. The Standard & Poor’s 500 index declined 15.37 to 1,325.76, and the technology-heavy Nasdaq composite index fell 43.53 to 2,280.83.
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The technology sector was particularly weak after business software maker Oracle posted worse-than-expected fiscal third-quarter sales and issued a cautious forecast. Meanwhile, data suggesting that Google’s revenue from Internet users’ clicks could slow also raised worries about tech stocks.
Oracle fell $1.51, or 7.2 percent, to $19.43, and Google dropped $14.11, or 3.1 percent, to $444.08.
Financial stocks lost ground today as well, with investors uncertain about what is in store for the economy and the troubled financial sector.
But the sense of panic that emanated from the near-collapse of Bear Stearns Cos. at the start of last week has lessened, observers say. The Federal Reserve this afternoon auctioned off $75 billion in credit to investment banks, whose demand was solid but not at the desperate levels some investors had feared.
“GDP was in line, so we’re still expanding, even though we’re expanding at a very small rate,” said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. “It’s definitely a different mind-set than it was two weeks ago. A lot of smart people are telling us to buy on the dips. I think we’ll be fine as long as there is not another Bear Stearns out there.”
Declining issues outpaced advancers by about 5 to 3 on the New York Stock Exchange, where volume came to 1.43 billion shares.
The Russell 2000 index of smaller companies fell 9.72 to 692.39.
Bond prices also fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.55 percent from 3.46 percent late Wednesday. The dollar rose against other major currencies, while gold prices slipped.
Light, sweet crude rose $1.68 to $107.58 a barrel on the New York Mercantile Exchange as investors grew uneasy about Iraqi oil output after the bombing of a key pipeline in that country.
While investors appear less cautious than they were after the Fed helped orchestrate the sale of the liquidity-starved Bear Stearns to JPMorgan Chase, there have recently been fresh signs of strain in the economy.
Still, some upbeat news gave investors some room for optimism. While it wasn’t enough to propel stocks higher, investors appeared pleased by the Labor Department’s report that the number of workers seeking unemployment benefits fell last week by a seasonally adjusted 9,000 to 366,000. Though the weekly figures can be volatile, the reading was better than the 371,000 many economists predicted.
Investors were kept busy digesting comments from a handful of Federal Reserve officials speaking today. However, none of the remarks on subjects such as the likelihood of recession and the need to further regulate Wall Street appeared to have discernible effects on the market.
George Shipp, chief investment officer at Scott & Stringfellow, said investors generally remain uneasy about whether they have an accurate read on the scale of the troubles in the financial sector and to what degree the parade of write-downs on bad investments might continue.
“It’s hard to imagine there is going to be any good news. The question is whether it’s been discounted,” he said, referring to another round of potentially weak results from big banks in the coming months. “The market is groping for a bottom. It’s a difficult time.”
Like the financial sector, homebuilders have caused much uncertainty among investors. But stocks in the sector advanced today after a better-than-expected snapshot of the business. Lennar said it swung to a loss in the first quarter as it faced charges to write down asset values. However, the company’s results stripping out certain items came in better than Wall Street had forecast and helped boost shares of homebuilders.
Lennar rose 31 cents to $17.90. Rival KB Home advanced 25 cents to $25.79, while DR Horton rose 33 cents, or 2.2 percent, to $15.53.
Overseas, Japan’s Nikkei stock average closed down 0.8 percent. Britain’s FTSE 100 rose 1 percent, Germany’s DAX index advanced 1.4 percent, and France’s CAC-40 rose 0.9 percent.