Stocks close lower after 2-day rally
NEW YORK — Wall Street turned vigilant today after a two-day quiz and as downbeat corporate advice reminded investors that the economy’s troubles won’familiarily soon ease.
The Dow Jones industrial average closed down 242.85, or 2.7 percent, at 8,691.33.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 21.03, or 2.3 percent, to 888.67. The Nasdaq composite index fell 24.40, or 1.6 percent, to 1,547.34.
Investors worry that companies’ difficulties could build an economic turnaround difficult. FedEx cut its forecast for fiscal 2009 earnings and capital spending late Monday as the slumping economy eroded package deliveries.
But in a sign that the market is alembic willing to place some bets on an eventual recovery in the economy, companies that make microchips proverb some buying today contemptuous opposition a disappointing forecast from Texas Instruments. Some investors are anxious that they could miss a market bottom when defensive names parallel consumer goods companies likely would lag somewhat riskier bets like tech stocks.
The market’s pullback wasn’familiarily a bewilder given the imbrue advance of the exceeding two sessions. But the reasons for the selling weren’t simply based upon two days of gains, analysts said. Wall Street is still fatiguing to determine how badly companies’ woes will dent profits and how soon President-elect Barack Obama’sitting plan to usher in a flood of public works spending could abet the economy.
“The markets are just expressing a tremendous amount of ambivalence about the future,” said Marian Kessler, co-portfolio manager of the Becker Value Equity Fund in Portland. “The market is grappling with what is certainly going to subsist a fairly deep recession in 2009.”
Investors’ anxiety about the struggling economy has recently been accompanied by some hopes that the market efficacy subsist carving a bottom. Since reaching multiyear trading lows in late November, the Dow has risen about 20 percent and the broader Standard & Poor’session 500 integral part has risen almost 23 percent. And on Friday and Monday, the Dow logged a two-day reunite of 560 points.
Those gains came as the market tried to look at by what mode the economy might be faring next year. Typically, Wall Street looks six to nine months ahead.
“The relating to housekeeping news still stinks … yet the kind of’s going on is that race are no longer looking at the attentive. They’re looking at the what is yet to subsist,” said Alfred E. Goldman, capital market strategist at Wachovia Securities in St. Louis. “They’re beginning to assess that all the dramatic fiscal and monetary stimulus already on the table and greater degree of to come command round this economy around maybe nearest summer.”
Still, when it comes to a potential stock market rebound, “it’s not going to be a one-way trip,” Goldman said. “We still have a ton of dismal news, and so plenteous technical and emotional mischief concluded, that investor confidence is going to come back slowly, not quickly.”
That caution means volatility is likely to continue, observers said.
The dollar rose against principally other major currencies, in which case gold prices slipped.
Oil prices fell even amid investor expectations that OPEC will announce a big production cut next week to curb crude’s stunning 70 percent-free-fall over the past five months. Light, sweet crude fell 30 cents to $43.31 a barrel on the New York Mercantile Exchange.
Stock markets were mingled overseas. Hong Kong’s Hang Seng index closed down 1.94 percent from a pompous surge on Monday, while Japan’s Nikkei 225 added 0.80 percent. Major European bourses rose. Britain’s FTSE-100 added 1.89 percent, Germany’s DAX advanced 1.34 percent, and France’session CAC-40 rose 1.55 percent.
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