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Wall St dips after 4-week rally

Wall St dips after 4-week rally
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First Published: Tue, Aug 11 2009. 11 05 AM IST
Updated: Tue, Aug 11 2009. 11 05 AM IST
New York:: US stocks fell on Monday, but were off their session lows, as investors booked profits following a four-week rally that took the broad S&P 500 index to a 10-month high on Friday.
The drop comes ahead of an abundance of economic data due this week, including the Federal Reserve’s statement on interest rates and the economy, as well as government figures for monthly retail sales.
Materials companies’ stocks took a hit, with the S&P materials index down 1.6% as a rise in the US dollar curbed investors’ appetite for commodities priced in the greenback.
AK Steel Holding fell 4.7% to $20.31 while Nucor lost 4.1% to $47.10.
“A number of natural resource names were perhaps overextended. We are seeing a pullback in commodity-related stocks,” said Joe Arsenio, president of Arsenio Capital Management in Larkspur, California.
He said that there was also some profit taking after the market’s steep rise in the past weeks.
“There’s been quite a bit of money coming in off the sidelines that supported the rally, and it’s possible that some of those flows are just diminishing a bit since we’ve had this tremendous advance,” he said.
The Dow Jones industrial average lost 32.12 points, or 0.34%, to close at 9,337.95. The Standard & Poor’s 500 Index fell 3.38 points, or 0.33%, to 1,007.10. The Nasdaq Composite Index dropped 8.01 points, or 0.40%, to 1,992.24.
The retail group was a weak performer in Monday’s session, with Best Buy down 5.3% at $37.66 after Goldman Sachs downgraded the electronics retailer to “neutral.”
The S&P Retail index dropped 2%.
On Nasdaq, BlackBerry maker Research in Motion was one of the top drags, down 4.9% at $73.34. The stock was down for a third-straight session after UBS downgraded it to “neutral” from “buy” on concerns that Verizon Wireless, one of RIM’s largest customers, may launch an iPhone.
On the upside, McDonald’s reported stronger-than-expected July sales, sending the Dow component’s stock up 1.9% to $56.27 on the New York Stock Exchange.
Fellow Dow component Merck & Co rose 1.7% to $30.60 after the drugmaker’s stock was reinstated by Goldman Sachs with a “buy” rating, and added to its Americas conviction buy list.
The S&P healthcare index gained 0.75%.
Volume was low on the New York Stock Exchange, with 1.09 billion shares changing hands, below last year’s estimated daily average of 1.49 billion. On the Nasdaq about 1.86 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 8 to 7, while on the Nasdaq, about 14 stocks fell for every 13 that rose.
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First Published: Tue, Aug 11 2009. 11 05 AM IST
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