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Jun 19, 2008 11:09 am US/Eastern
Stocks Fall After Philly Manufacturing Report
NEW YORK (AP) ―
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Traders look at screens near the end of the trading day at the New York Stock Exchange March 14, 2008 in New York City.
Chris Hondros/Getty Images
Stocks declined moderately Thursday after a regional manufacturing report pointed to slumping demand and rising prices.
Another report, from a private business group, said its forecast of future economic activity ticked higher by 0.1 percent in May. The findings from the New York-based Conference Board were in line with expectations but indicated that the economy is slack.
The manufacturing picture from the Philadelphia Federal Reserve weighed on stocks after its release by fanning investor fears that a drop in demand and increases in prices for commodities like oil are buffeting some businesses.
The reports, while not sending investors into a panic, didn't give investors much reason to go bargain hunting a day after a triple-digit decline in the Dow Jones industrials.
Concerns about tight credit have returned amid profit declines at major investment banks and signals that the industry is going to have to raise more cash. With the nation's money centers under stress, it appears the economy will have a hard time rebounding; borrowing is essential to growth.
In midmorning trading, the Dow Jones industrial average fell 39.25, or 0.33 percent, to 11,989.81. The Dow fell below the 12,000 mark in Wednesday's trading for the first time since mid-March. The blue chips finished above that level, however.
Broader stock indicators also declined Thursday. The Standard & Poor's 500 index fell 5.80, or 0.43 percent, to 1,332.01, and the Nasdaq composite index fell 16.63, or 0.68 percent, to 2,413.08.
Earlier, the Labor Department report that initial claims for unemployment declined by 5,000 last week from the previous week. The decrease was a bit smaller than expected, and the four-week moving average of initial claims, a less volatile indicator, rose - a sign that the U.S. job market remains strained.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged up to 4.16 percent from 4.14 percent late Wednesday.
Crude oil futures, which had been higher following reports of an attack on an installation in Nigeria, fell $1.82 to $134.86 per barrel on the New York Mercantile Exchange after China disclosed plans to raise oil prices. Such a move could dampen demand.
The dollar traded mixed against other major currencies, while gold prices rose.
In earnings news, Circuit City Stores Inc. posted a first-quarter loss that was wider than last year's due to sinking sales at established stores. The electronics retailer also said it is suspending its dividend. The company's per-share loss was slightly smaller than analysts expected, but its revenue was lower. Circuit City fell 20 cents, or 4.9 percent, to $3.85.
Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to 220.8 million shares.
The Russell 2000 index of smaller companies fell 1.71, or 0.23 percent, to 729.00.
Overseas, Japan's Nikkei stock average sank 2.23 percent. In afternoon trading, Britain's FTSE 100 rose 0.27, Germany's DAX index rose 0.29 percent, and France's CAC-40 fell 0.07 percent.
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