Stock buyers swing toward caution

NEW YORK – Investors can’t shake their fears that the economy isn’t keeping up with the stock market.

Stocks fell for a third straight day Friday as a disappointing outlook from computer maker Dell Inc. suggested that an economic recovery could be uneven. The major indexes all had moderate losses, leaving the Dow Jones industrials with a slim 0.5 percent weekly gain while broader indexes slid.

The market, which has been shuttling between concerns about the economy and traders’ need to find high-yielding investments, is back to worrying about the economy. Demand for safe-haven investments like Treasurys and the dollar rose for a second day in response to Dell’s outlook and comments from European Central Bank President Jean-Claude Trichet, who said the ECB plans to start reining in some of its stimulus programs. A rising dollar also hit commodities producers and exporters.

The week’s trading saw investors, who have been pumping money into stocks because record-low interest rates mean paltry returns for the dollar and Treasurys, change that strategy. Many are now questioning whether the massive stock rally this year really has been justified given the soft spots in the economy, and so they’ve been quick to retreat to safe harbors like government debt and the greenback.

The yield on the three-month T-bill, which moves opposite its price, fell to 0.01 percent from 0.02 percent late Thursday. Yields briefly turned negative Thursday as investors seeking to pad their portfolios with safe investments before the end of the year were willing to accept negative returns.

“Investors seem to need a constant reassurance with where we are in the economic recovery,” said Brett D’Arcy, chief investment officer at CBIZ Wealth Management Group in San Diego. “We just haven’t gotten it in the past few days.”