Stocks finish narrowly mixed after home report
Saturday, December 29, 2007
NEW YORK -- Stocks finished an erratic week narrowly mixed Friday after a government report of a steep decline in new home sales stirred concerns that weakness in housing will continue to dog the economy.
The Commerce Department report that new home sales fell 9 percent from October to a seasonally adjusted annual rate of 647,000 triggered renewed nervousness that consumers could become uneasy and tamp down their spending.
Stocks, which fell more than 1 percent Thursday following unwelcome economic readings and the assassination of Pakistani opposition leader Benazir Bhutto, fluctuated all Friday. The Chicago purchasing managers' index had for a time offered some support to investor sentiment Friday after it showed a stronger-than-expected increase for December manufacturing activity in the Midwest.
But Wall Street appeared unable to hold onto its enthusiasm for long. Investors are eager for any data that can help illuminate whether weakness in the housing and financial sectors is undercutting the overall economy, possibly leading to a recession.
Quincy Krosby, chief investment strategist at The Hartford, contends the news from growth in Midwest manufacturing to the weak housing report could have an outsize effect on stocks because of the session's light volume.
"What you have is a very thinly traded market so any news, whether it's good news or bad news, can skew the market actually quite dramatically," she said.