Major Indexes Retreat as Tech, Oil Shares Fall
Stocks retreated Wednesday, giving back some of the previous day’s gains, as weakness in technology and oil stocks offset a rally in shares of blue-chip Altria Group after it won a favorable court ruling.
On a day with little earnings or economic news, investors saw scant reason to buy stocks a day after major indexes hit their biggest gains in nearly two months, traders said. Stocks rallied on Tuesday, after the Federal Reserve’s decision to keep short-term interest rates at 45-year lows raised hopes that the low rates would help spur an economic recovery.
“Investors seem to be taking a wait-and-see approach” as they await corporate America’s quarterly earnings season, which kicks off early next month, said Neil Massa, a trader at John Hancock Advisers in Boston.
Although the major indexes gave up their modest early gains in the last hours of trading, rumors late in the session that New York Stock Exchange Chairman Richard Grasso would be asked to resign appeared to have little effect on the market.
The Dow Jones industrial average ended down 21.69 points, or 0.2%, at 9,545.65; the Standard & Poor’s 500 index fell 3.35 points, or 0.3%, to 1,025.97; and the technology-laden Nasdaq composite index slipped 4.15 points, or 0.2%, to 1,883.10.
Decliners edged advancers by 17 to 16 on the NYSE and by about 16 to 15 on Nasdaq. Trading was active.
Oil sector stocks were among the day’s losers, tracking declines in crude oil prices on news that record imports bolstered U.S. inventories last week.
Crude oil futures in New York ended down 53 cents at $27.03 a barrel, extending losses for the fifth straight session and hitting fresh four-month lows. Exxon Mobil, the world’s largest publicly traded oil company, fell 87 cents to $36.84. ConocoPhillips, the largest U.S. oil refiner, declined $1.02 to $55.82. The S&P; energy index, made up of the shares of major oil companies and oil services firms, fell 1.8%.
Shares of Altria, parent company of cigarette maker Philip Morris USA, shot up a day after it won a victory in the Illinois Supreme Court. Altria shares jumped $4.19, or 10.4%, to $44.65 and scored the biggest gain among Dow stocks.
Bond yields, which were largely unchanged Tuesday after the Fed’s announcement, tumbled Wednesday. The yield on the benchmark 10-year Treasury note fell to 4.18% from Tuesday’s close of 4.27%.
On the economics front, the government said U.S. housing starts slid 3.8% in August, suggesting that higher mortgage rates are cooling the housing boom.
However, the Commerce Department also said permits to break new ground for single-family homes jumped 2.9% to a record high, as builders rushed to lock in construction authorization before higher mortgage rates put off buyers.
In other highlights:
* Citigroup shares rose a day after it said its chief executive, Sanford Weill, would step down Oct. 1, three months early, and be succeeded by Charles Prince. Analysts said Citigroup probably shortened the succession timetable to reduce investor uncertainty. Shares of Citigroup, the world’s largest financial services company, rose 24 cents to $44.94.
* DuPont fell $1.50 to $42.47, recording the biggest decline on the Dow average. The second-largest U.S. chemical maker said 2003 earnings would be about $1.60 a share, at the low end of its previous forecast. DuPont cited lighter-than-expected industrial demand in July and August.
* Kroll, a provider of security and investigative services to companies and government agencies, lost $3.21 to $21.80. The company said profit this year would fall short of its December forecast because of restructuring costs.
* Electronics retailer Circuit City Stores dropped 23 cents to $10.97 after reporting that sales at stores open more than a year -- a key measure of retail performance -- fell 5% in the second quarter. The company reported a wider-than-expected loss for the period, excluding costs from a bank-card business it is selling, according to Thomson Financial.
* Worthington Industries fell $1.04 to $13.16. The 7.3% decline was the biggest on the S&P; 500. The company, which shapes steel for automobiles, said sales in its fiscal first quarter ended Aug. 31 fell 5% to $498 million.
* Vulcan Materials, the largest U.S. producer of building materials, fell $2.62 to $40.27. Sales may be reduced by Hurricane Isabel hitting the East Coast and further cut when a highway funding bill expires in two weeks, said David D. Weaver, an analyst at Legg Mason Wood Walker Inc. He downgraded shares to “hold” from “buy.”
