Markets End Down in Light Trading
Stocks declined in quiet trading Monday, as mixed economic data about the battered U.S. manufacturing sector raised doubts for some investors about the strength of the nascent economic recovery.
Insurance stocks were among the biggest losers, on worries that Hurricane Isabel could cause billions of dollars in damage if it hits the East Coast.
The Dow Jones industrial average fell 22.74 points, or 0.2%, to 9,448.81; the Standard & Poor’s 500 index eased 3.82 points, or 0.4%, to 1,014.81; and the technology-laden Nasdaq composite index declined 9.33 points, or 0.5%, to 1,845.70.
Losers led winners by 5 to 4 on the New York Stock Exchange and by 9 to 8 on Nasdaq in light trading.
Early Monday morning, the Federal Reserve Board reported that its gauge of industrial production rose in August, recording its first back-to-back gain since February. Production at the nation’s factories, mines and utilities climbed 0.1% last month, after a revised 0.7% gain in July. However, the gain fell short of Wall Street’s forecasts.
“We had the industrial production number, which was lackluster and below expectations,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Banking.
The production reading added to pessimism about the jobs market, Fitzpatrick said. U.S. factories have cut about 2.7 million jobs since July 2000, and some economists fear that the current recovery is not strong enough to create new jobs.
Some market watchers said they were awaiting comments from the Federal Reserve when it meets today.
Though the Fed is expected to leave its key short-term interest rate unchanged at 1%, Wall Street will scrutinize the Fed’s statement on the economy. The Federal Open Market Committee, which sets short-term rates, will release a statement at about 11:15 a.m. PDT.
Longer-term bond yields were little changed ahead of the Fed meeting. The yield on the benchmark 10-year Treasury note, which closed Friday at 4.25%, inched up to 4.27%.
Oil prices, already near four-month lows, eased further amid growing confidence over winter supply levels in the United States, the world’s largest oil importer. Crude for October delivery fell 13 cents to $28.14 a barrel after closing Friday at the lowest price since May.
Among the day’s highlights:
* In the insurance sector, American International Group, the biggest insurer by market value, fell $1.20 to $58.85. Allstate, which analysts said has the most exposure to potential damage by Isabel among publicly traded insurers, lost 43 cents to $35.56. XL Capital slid $1.97 to $72.83. The S&P; index of insurance stocks fell 1.1%.
However, hurricane fears helped boost shares of Home Depot, the world’s No. 1 home improvement retailer, as people stocked up on generators, batteries and other storm-related gear. Home Depot gained $1.19, or 3.8%, to $32.78 and was the Dow’s biggest percent gainer. Rival Lowe’s added $1.25 to $52.70.
* Boston Scientific soared $4.62 to $66.02 after researchers said its new heart device is effective at treating clogged heart arteries, putting the company in a strong position to compete with rival Johnson & Johnson. J&J;, which has the only drug-coated stent with current U.S. approval, declined 79 cents to $50.84.
* Apple Computer lost 89 cents to $22.21. The personal- computer maker, which entered the online-music business in April, is being sued by the Beatles’ record company over use of the Apple trademark.
* AT&T; gained 36 cents to $22.26. The company raised its quarterly dividend 27%, from 18.75 cents a share to 23.75 cents. AT&T; had said in July it would increase the payment by that amount.
Also, Lockheed Martin raised its quarterly dividend 83%, from 12 cents a share to 22 cents. The defense contractor made the announcement after markets closed and before it announced its plans to buy Titan Corp. for $1.8 billion. Lockheed shares fell 14 cents to $50.97 in regular trading.
Market Roundup, C10-11
