Wall Street dips on revised lower GDP

Wall Street dips on revised lower GDP
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First Published: Wed, Nov 25 2009. 09 16 AM IST
Updated: Wed, Nov 25 2009. 09 16 AM IST
New York: US stocks fell on Tuesday on lackluster economic data in a session marked by low volume and choppy trading, but losses eased after the Federal Reserve raised its expectations for growth in 2010.
Stocks fell early in the session as revised government data on gross domestic product showed the US economy grew at a slower-than-expected pace in the third quarter.
Hewlett-Packard Co shares led the Dow industrials lower a day after the technology bellwether said in its results that the US economy remained challenging.
With the S&P 500 up 22% so far this year, investors were struggling to justify additional gains after a series of middling economic reports.
However, the downbeat mood was tempered after the Fed revised upward its growth expectation for 2010, while minutes of the FOMC’s most recent meeting showed officials are increasingly confident about a durable recovery for the US economy.
“You’re getting the cross-current of weak revisions to third-quarter data matrixed against the Fed increasing the growth estimates for the economy for the next year,” said Jim Awad, managing director at Zephyr Management in New York.
“But the action in the market is moderate going into the holiday weekend and I wouldn’t read too much into it.”
The US stock market will be closed on Thursday in observance of Thanksgiving Day. On Friday, it will be open for only half a day due to the holiday.
The Dow Jones industrial average dropped 17.24 points, or 0.16%, to end at 10,433.71. The Standard & Poor’s 500 Index inched down just 0.59 of a point, or 0.05%, to 1,105.65. The Nasdaq Composite Index fell 6.83 points, or 0.31%, to 2,169.18.
Hewlett-Packard Co fell 1.6% to $50.19 a day after the blue-chip computer and printer maker reported a quarterly profit that matched its preliminary results, but said the economy remained challenging.
HP also said it saw growth in its share of US enterprise personal computers, which is rival Dell’s key market. Dell’s stock fell 3.2% to $14.32 and ranked as a top drag on the Nasdaq 100.
Financial stocks showed weakness throughout the session. JPMorgan Chase & Co slid 1.9% to $42.48 and ranked among the heaviest weights on the blue-chip Dow industrials. The KBW bank index fell 0.7%.
Zephyr Management’s Awad said there is concern about banks’ capital after news that the Fed asked lenders that were part of its “stress tests” to submit plans to repay government money.
US home prices rose in September, according to the Standard & Poor’s/Case-Shiller index, but the increase was less robust than forecast. Home prices for that month were unchanged, according to a separate report from the US Federal Housing Finance Agency.
The Dow Jones US Home Construction Index fell 1.7%.
Volume was light on the New York Stock Exchange, where only about 952 million shares changed hands, far below last year’s estimated daily average of 1.49 billion. On the Nasdaq, about 1.87 billion shares traded, well below last year’s daily average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 8 to 7. On the Nasdaq, about three stocks fell for every two that rose.
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First Published: Wed, Nov 25 2009. 09 16 AM IST
More Topics: Markets | US | Stocks | Wall Street | Economic Data |