April 15, 2005 in Business

Stocks slump to lows for year

Associated Press

NEW YORK — The major stock indexes struck fresh lows for the year Thursday as a cautious forecast from Apple Computer Inc. unsettled investors, who are growing uneasy about the economy despite signs of continued improvement in the labor market.

The Dow Jones industrial average and the Standard & Poor’s 500 sank to five-month lows, reflecting the market’s anxiety about interest rates and the economy. Following a disappointing retail sales report for March, investors seemed intent on focusing on negative news, but with earnings season just barely under way, some analysts said it was too soon to assume the worst.

“We don’t think any kind of concrete opinion about earnings can come be formed yet because we’re still in the early stages,” said Brian G. Belski, market strategist at Piper Jaffray. “We are in defensive, reactionary times, which longer term, have traditionally provided good entry points.”

The Dow slumped 125.18, or 1.20 percent, to 10,278.75. It was the Dow’s worst close since Nov. 3, when it finished at 10,137.05.

The broader indexes also fell. The Nasdaq composite index shed 27.66, or 1.40 percent, to 1,946.71. The last time it closed lower was on Oct. 26, when it ended at 1928.79.

The S&P 500 declined 11.74, or 1.00 percent, to 1,162.05; it has not closed lower since Nov. 4, when it stood at 1161.67.

Analysts were struck by what many characterized as a shift in the market following Wednesday’s lower-than-expected retail sales results, which ignited fears of a slowdown in consumer spending, and in turn, corporate earnings. The only thing that could ease those concerns could be upbeat forecasts for the rest of the year from market bellwethers reporting over the next few weeks.

“You haven’t heard the phrase ‘economic slowdown’ in a while. There are real questions about the strength of the economy in the second half,” said Jay Suskind, head trader at Ryan Beck & Co. “Investors are wondering if these numbers are the best were going to see. It’s as if good news is bad and bad news is bad. The sentiment is one of fears and jitters, and no one wants to buy this market.”

Crude prices were volatile a day after flirting with a seven-week low. Light, sweet crude for May delivery slipped in early trading, but rebounded after falling below the $50 mark. Oil futures climbed 91 cents to settle at $51.13 per barrel on the New York Mercantile Exchange.

Treasurys were higher following the successful sale of inflation-indexed notes; the yield on the 10-year note slipped to 4.34 percent, down from 4.36 percent late Wednesday.

Decliners outnumbered advancing issues by about 4 to 1 on the New York Stock Exchange.

Overseas, Japan’s Nikkei stock average shed 0.64 percent. In Europe, France’s CAC-40 declined 0.14 percent, Britain’s FTSE 100 lost 0.31 percent and Germany’s DAX index slipped 0.08 percent.

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