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- Pilot House goes smoke-free (4/23/17)10
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- Event includes the first public tour of 200-year-old Elmwood Manor (4/23/17)3
- Cape councilman Bob Fox to run for mayor (4/21/17)5
- Deputy: Man kicked, broke uncle's ribs after yard-work dispute (4/19/17)
- Scott County: M Kay Supply in Benton fills unique needs in community (4/14/17)
Stocks slip on technology, housing construction
NEW YORK -- Disappointing forecasts from technology companies and an unexpected drop in home construction added to worries about the economy and sent stocks modestly lower.
The drop Wednesday came a day after major stock indicators closed at 13-month highs. The Dow Jones industrial average slipped 11 points after having risen in nine of the past 11 days. A drop in technology stocks weighed on the Nasdaq composite index.
Analysts say the market has been due for a break after the fast ascent.
John Brady, senior vice president of global interest rate products at MF Global in Chicago, said that as the end of the year approaches, traders are looking foremost at preserving the gains amassed in an eight-month rally which has given the benchmark Standard & Poor's 500 index a gain of 22.9 percent so far in 2009.
"It's a bit of a consolidation trade," he said. "Traders are scared to go too far out on a limb here and do anything too risky late in the year."
Technology shares fell after BMO Capital Markets said Blackberry maker Research in Motion Ltd. faces increased competition as consumers opt for less expensive phones. Meanwhile, forecasts from software makers Autodesk Inc. and Salesforce.com fell short of analysts expectations.
The day's economic news provided investors more reason for caution. The Commerce Department said construction of homes and apartments fell 10.6 percent in October to an annual rate of 529,000, well below the pace of 600,000 that economists polled by Thomson Reuters expected.
Building permits, a key indication for future activity, slid 4 percent and fell short of forecasts.
Joe Heider, president of Dawson Wealth Management in Cleveland, said investors are trying to determine whether the slowdown signaled weakness in the economy or a reluctance among builders to break ground when the future of a homebuyers' tax credit was uncertain. Lawmakers extended a tax credit for first-time homebuyers through June.
The Dow fell 11.11, or 0.1 percent, to 10,426.31, after sliding as much as 77 points in morning trading. The broader S&P 500 index slipped 0.52, or 0.1 percent, to 1,109.80, while the Nasdaq fell 10.64, or 0.5 percent, to 2,193.14.
Trading volume was light, as it has been for weeks. That suggests a relatively small number of buyers, which means the market may have trouble holding on to a surge that has vaulted the Dow up 714 points, or 7.4 percent, this month.
Investors are looking for any signals of further improvement in the economy to justify the gains that pulled major stock indexes off 12-year lows in March. Rising unemployment and tepid retail sales have some analysts worried that investors might have been too quick to place bets on a recovery.
The dollar mostly fell against other major currencies. That drove demand for gold and other metals.
Gold rose for a fourth straight day to a record $1,151.20 an ounce before ending at $1,141.20 an ounce on the New York Mercantile Exchange. Copper and silver touched their highest levels in more than a year.
The drop in the dollar offered only modest support to stocks. The market often moves opposite the dollar as weakness in the currency boosts demand for commodities. That, in turn, strengthens shares of energy and materials companies as well as exporters whose goods become cheaper to foreign buyers.
Matthew Eads, portfolio manager at Eads & Heald Investment Counsel in Atlanta, said the market is still at reasonable levels even though the S&P 500 index has risen 64 percent since March. But he cautions that stocks could pull back, however, if problems like unemployment don't ease or if confidence about a recovery falters.
"As long as people perceive fear or are losing their jobs, spending is going to go down," he said.
Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.37 percent from 3.33 percent late Tuesday.
Crude oil rose 44 cents to settle at $79.58 per barrel on the Nymex.
Research in Motion fell $1.55, or 2.5 percent, to $59.85, while Autodesk slid $2.80, or 10.4 percent, to $24.20. Salesforce.com fell $2, or 3.1 percent, to $63.61.
Falling stocks narrowly outpaced those that rose on the New York Stock Exchange, where consolidated volume came to 4.3 billion shares compared with 3.9 billion Tuesday.
The Russell 2000 index of smaller companies fell 2.19, or 0.4 percent, to 600.15.
Overseas, Britain's FTSE 100 fell 0.1 percent, Germany's DAX index gained 0.2 percent, and France's CAC-40 slipped less than 0.1 percent. Japan's Nikkei stock average fell 0.6 percent.