Recovery Worries Hurt Stocks; Techs Skid
Stocks were lower in afternoon trading Wednesday as investors shrugged off some good news and worries about the recovery gripped the market.
And, the data today backed up those fears: New-home sales dropped 3.6 percentin September and August's gain was revised lower. Economists had expected sales to rise. That piled on to the bad news for the housing sector after an earlier report showed mortgage applications fall for the third week in a rowlast week.
And Goldman Sachs slashed its forecast for third-quarter GDP to 2.7 percent from 3 percent. The government's first read on Q3 GDP is due out on Thursday.
Investors shrugged off a report that showed durable-goods orders rose 1 percentin September, though compared to last year fell more than 24 percent.
The tech-heavy Nasdaq was the hardest hit of the three indexes as investors have begun to unwind some of their recovery trades in tech and consumer discretionary. Those sectors were among the hardest hitin yesterday's session.
The Nasdaq is now lower for October, though the Dow and S&P 500 are still higher for the month.
In afternoon trading, Alcoa, Caterpillar and GE were the biggest drags on the Dow. Telecoms AT&T and Verizon were at the top of the pack.
Oil fell, trading below $78 a barrel, after a report showed crude inventories rose by just 778,000 barrels last week. Economists had expected a 1.7 million build.
The Treasury's five-year auction today was met with decent demand but it wasn't as strong as the other auctions this week. Tomorrow is the seven-year auction.
On the earnings front, ConocoPhillips reported a sharp drop in earnings and revenue from a year earlier but still beat expectations.
This came after Visa beat on both earnings and revenue with its results after the bell Tuesday, and raised its dividend.
Financials were among the day's biggest decliners following the disappointing housing news and as Pay Czar Kenneth Feinberg told a House panel that standards reached for executive pay at bailed-out firms should be applied to the broader marketplace. The bailed-out firms under review include AIG , Bank of America , Citigroup , Chrysler, Chrysler Financial, General Motors, and GMAC.
A tale of two IPOs today: Vitamin Shoppe shares soared after the vitamin chain's IPO priced above expectations. It's the first retailer to go public in two years. But Addus Homecare fell in its debut on the Nasdaq after pricing below expectations.
Apollo Group dragged on the Nasdaq, tumbling more than 15 percent, as federal regulators opened a probe into the educational group's accounting and at least three brokerages downgraded the stock.
AstraZeneca shares fell as the company pulled its experimental lung-cancer drug Zactima from the regulatory submission process, after the drug demonstrated no survival advantage when added to chemotherapy.
Still to Come:
THURSDAY: 80th anniversary of 1929 market crash; Weekly jobless claims; first look at Q3 GDP; Larry Summers speaks in NYC; Earnings from AstraZeneca, ExxonMobil, P&G, Aetna, Kellogg, Motorola and Sprint Nextel
FRIDAY: Personal income and spending; consumer sentiment; Earnings from Chevron
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