Stocks fall after drop in home sales, spike in inventories
NEW YORK -- Wall Street pulled back Monday, losing momentum from last week's gains after news that sales of existing homes slipped in July for a fifth straight month stirred concerns about the strength of the economy.
Sales of existing homes slowed to their most sluggish pace in nearly five years, while home prices fell for a record 12th straight month. The National Association of Realtors reported that existing home sales slipped by 0.2 percent in July to a seasonally adjusted annual rate of 5.75 million units. Inventories rose 5.1 percent to a record 4.59 million units.
The stock market's pullback perhaps wasn't unexpected given last week's rally and that Wall Street is still trying to sort out concerns about failing mortgages and tighter access to credit for both individuals and corporations.
A fresh round of buyout news might have acted to limit the stock market's losses Monday, which were small compared with the triple-digit plunges the Dow Jones industrials suffered in early August.
"I think there is still a little bit of nervousness about the credit market but that seems to be abating slowly," said Brian Gendreau, an investment strategist for ING Investment Management.
The Dow fell 56.74, or 0.42 percent, to 13,322.13. Broader stock indicators also declined. The Standard & Poor's 500 index fell 12.58, or 0.85 percent, to 1,466.79, and the Nasdaq composite index fell 15.44, or 0.60 percent, to 2,561.25.