Loading…
Monday, July 14, 2014
Current Weather
Loading Current Weather....
Published: Thursday, 2/28/2013 - Updated: 1 year ago

Dow eases back from near record as a rally fades

Rally fades on Wall Street, pulling Dow Jones industrial average away from near-record level

ASSOCIATED PRESS

NEW YORK — It came oh so close.

The Dow Jones industrial average came within 15 points of its all-time high today. But the momentum petered out, and the Dow and other indexes broke a two-day winning streak and closed lower.

Economic data and company reports reflected an economy beating investors’ low expectations, rather than one growing like gangbusters. Impending government budget cuts also cast a pall for some investors.

“There was no dramatic, great news,” said Leon LaBrecque, CEO of LJPR in Troy, Mich. “There's no remarkable economic information. Earnings are pretty much mixed.”

The day started with the stock market plodding along before sending investors on a whipsaw day. After gaining a combined 291 points on Tuesday and Wednesday, the Dow spent the first half of today's trading session darting between small gains and losses.

It took a decisive turn upward in the early afternoon. Around 2:30 p.m., it hit 14,149 — just 15 points from the Oct. 9, 2007, record of 14,164.53.

Then the rally sputtered and stocks turned lower in the final few minutes of trading.

The Dow ended down 20.88 points, or 0.2 percent, to 14,054.49. The Standard & Poor's 500 index slipped 1.31, or 0.09 percent, to 1,514.68. The Nasdaq composite index edged down 2.07, or 0.07 percent, to 3,160.19.

Some said the market's fleeting gain today was more about its general tendency to rise over time, and not necessarily a reflection of a surge in strength for the U.S. economy.

“People have to separate the economy from the stock market,” said Ed Butowsky, managing partner of ChapwoodFinance.com in Dallas.

Today's data didn't provide a clear picture on the economy.

Company earnings were mixed. J.C. Penney and Barnes & Noble posted losses. Wendy's and Domino's had higher profits. The U.S. economy grew at an annual rate of 0.1 percent in the last three months of 2012 — better than the original estimate of a 0.1 percent decline, but hardly robust. The number of Americans seeking unemployment aid fell, and the government prepared for federal spending cuts to kick in Friday, a result of Democrats and Republicans not compromising on the budget debate.

“We still have work to do, still a lot of headwinds to face,” said Steve Sachs, head of capital markets at ProShares in Bethesda, Md. But, he added, “we're in a better position now than we were three years ago.”

Today's close means the Dow rose 1.4 percent in February — respectable, but a slowdown from its 5.8 percent gain in January.

The Dow milestone doesn't mean much in practical terms. It's an index of 30 big-name stocks, such as Disney and General Electric that investors follow as a gauge of how the overall stock market is doing. But professional investors don't change their strategy because of it.

Even so, a Dow record would be important for psychological reasons: It can make people feel like the economy is doing better. That can induce them to spend and invest more. And it reminds people of a time before the financial crisis, which peaked in 2008.

The yield on the 10-year Treasury note held steady at about 1.90 percent.

Among stocks making big moves:

—Groupon, the coupons Web site, plunged 24 percent after reporting late Wednesday that its quarterly loss had expanded. The stock fell $1.45 to $4.53.

—J.C. Penney fell 17 percent after the department store reported a higher-than-expected quarterly loss late Wednesday. The stock dropped $3.59 to $17.57.

— Wendy's, Domino's, clothing chain Chico's and energy drink maker Monster Beverage all rose after reporting higher profit and revenue.

—Barnes & Noble climbed 3 percent, up 51 cents to $15.74. The bookstore chain posted a loss, though its CEO confirmed that the company was still in talks with its founder about a partial buyout.

 



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories