NEW YORK (AP) - Stocks lost ground Thursday after a reading on the economy
confirmed a slowdown in the final quarter last year and a weak quarterly showing
from Oracle Corp. weighed on technology stocks.
The Commerce Department's gross domestic product data showed the economy
grew at a 0.6 percent annual pace in the final quarter last year -- unchanged
from an estimate a month ago. And while consumers increased their buying at a
2.3 percent pace, which was ahead of the 1.9 percent growth rate that had been
estimated, investors seemed unwilling to make bets that the economy will soon
recover.
Oracle, the maker of business software, posted fiscal third-quarter sales
that fell short of Wall Street's expectations and issued a cautious forecast.
The reports arrived as Wall Street is still trying to determine how well the
economy is holding up under strains including tightness in the credit markets, a
weak housing sector and nervous consumers who have cut back spending. Investors
will likely be examining comments from Federal Reserve officials for insights
into how the economy, and specifically the financial sector, are faring. Several
Fed officials are slated to speak Thursday.
George Shipp, chief investment officer at Scott & Stringfellow, said
investors are generally uneasy about whether they have an accurate read on the
scale of the troubles in the financial sector. There are fears that a parade of
write-downs on bad investments will continue.
"It's hard to imagine there is going to be any good news. The question is
whether it's been discounted," he said, referring to another round of
potentially weak results from big banks in the coming months. "The market is
groping for a bottom. It's a difficult time."
In late morning trading, the Dow Jones industrial average fell 56.17, or
0.45 percent, to 12,366.89.
Broader stock indicators also fell. The Standard & Poor's 500 index slid
7.34, or 0.55 percent, to 1,333.79, and the technology-heavy Nasdaq composite
index fell 30.25, or 1.30 percent, to 2,294.11, hurt by Oracle's decline.
Declining issues outnumbered advancers by about 4 to 3 on the New York Stock
Exchange, where volume came to 407.1 million shares.
Oracle fell $1.55, or 7.4 percent, to $19.39.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which
moves opposite its price, rose to 3.48 percent from 3.46 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude rose 38 cents to $106.28 on the New York Mercantile
Exchange. Prices jumped early Thursday after the bombing of a key oil pipeline
in Iraq.
Upbeat economic news gave investors some room for optimism but wasn't enough
to stave off a decline in stocks. The Labor Department said the number of
workers seeking unemployment benefits fell last week. Applications declined by a
seasonally adjusted 9,000 to 366,000. Though the weekly figures can be volatile,
the reading was better than the 371,000 many economists predicted.
In corporate news, American Express Co. agreed to acquire the corporate
payment services division of GE Money, a division of General Electric Co., for
$1.1 billion cash. American Express fell 36 cents to $45, while GE fell 33 cents
to $36.80.
ConAgra Foods Inc. advanced $1.35, or 6.2 percent, to $23.24 after striking
a deal to sell its commodity trading and merchandising operations to an
investment group for about $2.1 billion.
Williams-Sonoma Inc. said profits rose 3 percent in its fiscal fourth
quarter, which was a week longer than a year earlier. The home furnishings
retailer warned, however, that it expects fiscal 2008 earnings will come in
below Wall Street's estimates. The stock fell $1.28, or 5.1 percent, to $23.70.
Overseas, Japan's Nikkei stock average closed down 0.80 percent. In
afternoon trading, Britain's FTSE 100 rose 0.36 percent, Germany's DAX index
advanced 1.03 percent, and France's CAC-40 rose 0.41 percent.
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