New York: Wall Street began a holiday-shortened week with a moderate pullback as investors recoiled at bleak news from Toyota Motor Corp and drugstore operator Walgreen Co.
The two companies - both viewed as better-positioned than many of their peers - provided more evidence that even stronger companies are struggling as consumers cut back their spending.
On Monday, Walgreen’s profit fell 10% in its fiscal first quarter, due mostly to the costs of opening more than 200 new stores, so the company said it will slow down its expansion. Toyota, meanwhile, slashed its earnings forecast for a second time, warning that it now expects to post an operating loss for the fiscal year through March.
It would be the Japanese automaker’s first such loss since it began reporting results in 1941, and underscores the challenges facing car companies. Toyota’s American rivals, General Motors Corp and Chrysler LLC, received a US $17.4 billion lifeline from the federal government last Friday to stave off bankruptcy.
According to preliminary calculations, the Dow Jones industrial average fell 59.42, or 0.69%, to 8,519.69, after briefly moving into positive territory early in the session, tumbling, and then recovering some of its losses.
Broader stock indicators also finished lower. The Standard & Poor’s 500 index fell 16.25, or 1.83%, to 871.63, and the Nasdaq composite index fell 31.97, or 2.04%, to 1,532.35.
The Russell 2000 index of smaller companies fell 11.19, or 2.30%, to 475.07. Smaller companies tend to be more vulnerable to economic weakness than larger companies.