Poor reports cause market to slip
NEW YORK — Wall Street pulled back Wednesday after a drop in February’s durable goods orders injected more pessimism about the economy into the stock market. The Dow Jones industrial average fell nearly 110 points.
Investors who have been worried about the financial health of U.S. companies and individuals were disappointed to see a 1.7 percent dip in last month’s orders of durable goods, or big-ticket items that range from refrigerators to cars to computers. The Commerce Department’s durable goods report is indicative of business spending and consumer demand, so two straight months of declines were worrisome to Wall Street.
Meanwhile, investors found another reason to be cautious after the Commerce Department said sales of new homes slumped in February. The 1.8 percent decline was a bit narrower than economists surveyed by Thomson Financial/IFR had anticipated, but it still dragged down sales for the fourth consecutive month to a 13-year low.
Considering that the Dow has added more than 425 points in the past three sessions, a pullback does not come as a surprise. But the question for Wall Street now is whether economic data later this week on jobless claims, gross domestic product and personal spending will further erode or rekindle the market’s recent rally.
The Federal Reserve has lowered interest rates, loosened its lending practices and helped prevent a total collapse of Bear Stearns Cos. But the broader economy continues to struggle with tumbling home prices and rising commodity costs; crude oil, for one, surged back above $105 a barrel on Wednesday.
The Dow fell 109.74, or 0.88 percent, to 12,422.86, after sinking as many as 155 points during trading.
Broader stock indicators also retreated. The Standard & Poor’s 500 index fell 11.86, or 0.88 percent, to 1,341.13, while the Nasdaq composite index fell 16.69, or 0.71 percent, to 2,324.36.
Overseas, Japan’s Nikkei stock average fell 0.30 percent. Britain’s FTSE 100 fell 0.50 percent, Germany’s DAX index fell 0.54 percent, and France’s CAC-40 fell 0.33 percent.