Stocks Slip for Second Straight Session
Wall Street ended mostly lower Tuesday for a second straight session, despite Iraq’s pledge to meet a Dec. 8 deadline to produce a full account of its weapons program.
Oil prices pulled back after Iraq’s announcement, but the stock market failed to extend an early rally.
The Dow Jones industrial average eased 11.79 points, or 0.1%, to 8,474.78. The Nasdaq composite lost 19.18 points, or 1.4%, to 1,374.51.
Home Depot, one of the 30 Dow stocks, weighed on the market after the retailer said full-year sales growth will fall short of its targets. Home Depot slid $3.69 to $24.91.
“The one thing we have been convinced about is the strength of the consumer. When we have a marquee company like Home Depot giving slightly downward guidance, it gives us the fear that the U.S. consumer is running out of steam,” said Arthur Hogan, chief market analyst at brokerage Jefferies & Co.
The news from the retail sector wasn’t all bad. Staples surged $2.16 to $18.39 after the office-supplies retailer said third-quarter earnings jumped 40%, and that it expects faster-than-expected growth in 2003.
Early Tuesday, stocks enjoyed some upward momentum after Federal Reserve Chairman Alan Greenspan told the Council on Foreign Relations that financial innovations have helped the United States and the world to absorb the loss of $8 trillion of wealth in the U.S. stock market.
The Dow traded as high as 8,546 before falling back.
Losers outnumbered winners by 18 to 14 on the New York Stock Exchange and by 19 to 14 on Nasdaq -- the same ratios as Monday.
In commodities trading, near-term crude oil futures traded as high as $27.08 a barrel, then slid following the Iraq news to close at $26.42, down 29 cents.
In the bond market Treasury yields were little changed.
Among Tuesday’s highlights:
* Retail shares were mostly lower, apparently hurt by Home Depot. Lowe’s, a key rival of Home Depot, slid $1.72 to $38.98. Other losers included Wal-Mart Stores, down 76 cents to $52.92, and Target, which eased 28 cents to $31.30.
Also, BJ’s Wholesale Club slumped $3.74 to $18.36. The East Coast warehouse-club retailer said weaker consumer spending is hurting its outlook. Brokerage A.G. Edwards downgraded the stock to “sell.”
* Defense stocks, which have mostly been in decline for the last two months, staged a rally even though worries about war with Iraq may have faded somewhat. Alliant Techsystems jumped $2.42 to $58.50, Lockheed Martin gained $1.95 to $51.25 and L-3 Communications added $1.30 to $43.30.
* Some tech leaders were under pressure. Microsoft lost $1.02 to $54.83, Intel was off 40 cents to $18.15 and Amazon.com tumbled $1.13 to $21.29. Brokerage Bear Stearns downgraded Amazon to “peer perform” from “outperform,” citing expectations of slowing growth.
* In the energy sector Dynegy jumped 58 cents to $1.35 after Chief Executive Bruce Williamson said the firm should generate enough cash to meet almost $2 billion of debt obligations next year and avoid bankruptcy.
* In the health-care sector, AmerisourceBergen dropped $4.40 to $59, and Cardinal Health lost $3.20 to $64.70. Goldman, Sachs & Co. analyst Christopher McFadden cut the two largest U.S. drug wholesalers to “in-line” from “outperform,” citing slowing growth in drug sales.
* In foreign trading Japan’s Topix stock index, a broad index of shares on the Tokyo Stock Exchange, fell 0.8% to 817.09, its lowest level since 1984, as investors continued to dump bank stocks. But the blue-chip Nikkei index inched up 0.2% to 8,365.26.
Market Roundup, C8-9
