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Market declines on weak economic signs

Market declines on weak economic signs
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First Published: Fri, Jun 18 2010. 12 05 AM IST
Updated: Fri, Jun 18 2010. 12 05 AM IST
New York: US stocks declined on Thursday as data on regional factory activity and jobless claims underscored worries about the pace of the economic recovery.
Shares of manufacturers fell, including 3M, which was down 0.8% at $80.27, while the consumer discretionary sector also dragged on the S&P 500. The S&P retail index declined 1.8%.
The day’s economic data included a report by the Philadelphia Federal Reserve Bank, which said its June business activity index fell to 8.0, its slowest pace in 10 months, from 21.4 in May.
Another report showed the number of people filing for unemployment insurance unexpectedly increased in the latest week.
A downward trend in the number of first-time applicants for unemployment benefits has halted, Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said.
“It’s sending a minor message that the pace of the recovery may be slowing down a little bit,” Dickson said.
Homebuilder stocks also lost ground a day after luxury homebuilder Toll Brothers Inc said a decline in consumer confidence has led to fewer people looking to buy a home.
The Dow Jones industrial average was down 54.12 points, or 0.52%, at 10,355.34. The Standard & Poor’s 500 Index was down 5.54 points, or 0.50%, at 1,109.07. The Nasdaq Composite Index was down 9.54 points, or 0.41%, at 2,296.39.
Bucking the weak trend, shares of Apple Inc touched a lifetime high at $272.90. Apple said on Wednesday it sold more than 600,000 units of its new iPhone, a record for a single day of preorders. Its shares were last up 1.3% at $270.73.
Toll Brothers released intra-quarter activity data on home buying before executives spoke at the Reuters Global Real Estate and Infrastructure Summit on Thursday. Its shares declined 3.9% to $18.05 while KB Home fell 2.9% to $12.55.
The Morgan Stanley housing index dropped 2%.
Dickson said volatility could increase because of options and futures expirations later on Thursday and on Friday. The quadruple witching period, as it’s called, refers to the quarterly settlement and expiration of four different types of June equity futures and options contracts.
The S&P 500 was trading near its 200-day moving average at around 1,110.
“That’s going to be a critical test as we go through the day,” Dickson said.
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First Published: Fri, Jun 18 2010. 12 05 AM IST