Stocks dip; personal spending shows weakness
NEW YORK – Wall Street finished the week with a decline Friday as the financial health of the consumer came into focus following a report that showed personal spending at its weakest growth in 17 months and a profit warning from J.C. Penney Co.
Trading was fairly muted following days of volatility that sent stocks sharply higher early in the week and then plunging near the end. Investors were able to set aside some concerns about the effects of the credit crisis on the financial sector, but that gave them more time to think about the economy.
“I’m viewing a day like today as sort of a continuation from where we were a month or two ago,” said Les Satlow, portfolio manager at Cabot Money Management in Salem, Mass. “The U.S. recession concerns have resurfaced. They never went away but there was the beginning of the sense that this recession was going to be shallow and maybe a bit benign.”
The Dow Jones industrial average fell 86.06, or 0.70 percent, to 12,216.40, suffering its third straight decline.
Broader stock indicators slipped. The Standard & Poor’s 500 index fell 10.54, or 0.80 percent, to 1,315.22, and the Nasdaq composite index fell 19.65, or 0.86 percent, to 2,261.18.
For the week, the Dow fell 1.17 percent and the S&P 500 dropped 1.07 percent. The Nasdaq, which had a sharp rally in recent weeks and trended above the other major indexes, finished up 0.14 percent.
“This has almost been a week of pause,” said Jack Caffrey, equities strategist at JPMorgan Private Bank, saying investors are witnessing a calm before the storm of first-quarter earnings in April. “The markets didn’t move all that much. And more importantly, volumes were noticeably lower.”
Friday’s session came ahead of a week expected to bring another round of key economic data and the end of the first quarter on Monday. With widespread weakness in the stock market many investors are likely eager to close the books on the losses and start fresh on Tuesday.
Falling stock valuations sent bond prices higher Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.45 percent from 3.52 percent late Thursday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell $1.96 to settle at $105.62 a barrel on the New York Mercantile Exchange.
Advancers led decliners by a 2 to 1 basis on the New York Stock Exchange, where volume came to 1.35 billion shares.
The Russell 2000 index of smaller companies fell 9.21, or 1.33 percent, to 683.18.
Overseas, Japan’s Nikkei stock average rose 1.71 percent. Britain’s FTSE 100 fell 0.43 percent, Germany’s DAX index fell 0.28 percent, and France’s CAC-40 declined 0.50 percent.